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OceanaGold testing new minerals area

Wednesday 21st July 2010

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OceanaGold released its second strong indication this month of extensions to known resources at its Frasers Underground mine, in Otago, with "the first indication of a new possible new area of mineralisation", which it described as "very encouraging".

Shares in the Melbourne-based gold producer jumped 3.1% to $3.97, although they had fallen from heights reached after the July 12 confirmation of significant additional gold reserves in the Panel 2 Deeps area of Frasers. The shares rose to $4.20 on that announcement, and are still showing a gain of almost 200% over the past 12 months.

The company's underground diamond drilling programme has identified "further extensions to the gold mineralisation at depth and down dip from the current workings in Panel 2," OceanaGold said in a statement to the NZX.

Significant intercepts had occurred within the Hangingwall Shear structure at true widths including 5 metres at 5.55 grams of gold per tonne of tailings (g/t Au) and 5 metres at 3.17 g/t Au, demonstrating "grades and lode thicknesses similar to the current Panel 2 mining area."

Significant intercepts below the hangingwall structure included estimated true width finds of 4 metres at 4.87 g/t Au, 6 metres at 4.9 g/t Au, and 3.5 metres at 7.5 g/t Au.

"This is the first indication of a new possible area of mineralisation and these intercepts may represent one or more sub-parallel lodes similar to the Panel 2 Deeps discovery announced last year," said vice-president Darren Klinck.

Signs are that mineralisation may extend to the north, south, and south-east, with further diamond drilling occurring in those areas.

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