DioroExploration NL (ASX & TSX: DIO) said the Frog's Leg joint venture at theKundana mining centre poured its first gold from underground mining as a milestonefor a targeted annual production of 83,000 ounces.
Frogs Leg, underan open cut mine that operated in 2005/05 and produced 112,000 oz, is a jointventure between La Mancha Resources Inc (TSX: LMA) 51% and Dioro which holdsthe balance.
The ore waspart of a 100,000 tonnes parcel of mainly development ore from the undergroundmine that is being processed at Dioro's Jubilee Mill.
Dioro'smanaging director Rhod Grivas said that in addition to the gold pour, therehave been other significant developments at the mine, including that the Rocketand Mist declines there have now advanced 3,000 metres in total and that developmentis now taking place on a number of horizontal mining levels.
Wherever themineralisation has been exposed to date, orebody widths and grades are inaccordance with what was predicted by the resource model. he said.
The projectedlife of Frog's Leg, so named because of the original shape of the orebody, isfor seven years based on the reserve of 3.65 million tonnes at 5.29 grams/tonnegold.
The companysaid this reserve does not take into account additional resources calculated inthe March 2008 upgrade which added 267,000 oz to the measured and indicatedcategory, increasing the total measured-indicated resources to 990,000 oz.
Grivas saidthat the ability to mill this ore at Dioro's low-cost mill further reinforcesthe company's growth strategy, whose most recent component was the acquisitionof the South Kalgoorlie Project which included the Jubilee mill.
Frog's Leg isa terrific asset for Dioro because it provides us with long-life high-gradefeed into the blend of ores processed in the Jubilee mill. The ownership ofboth these assets improves the viability of each project and enhances theoverall profitability of Dioro as a whole.
He said the Jubileemill is a valuable asset in its own right because it is close to Kalgoorlie (20 km away) and has grid powerallocations, therefore not requiring high cost diesel generated power. It isclose to a number of other gold projects in the area.