CAN DECCAN GOLD BECOME A MAJOR GOLD PRODUCER?
Rodger Allen Gold Mine
The growth of gold mining industry in Australia •
Understanding of Australia’s prospectivity
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Technological developments
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Government of Australia’s investor friendly policies
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Quantum of exploration expenditure
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Access to capital from the public via listings of exploration and mining companies on the Stock Exchange
The growth of gold mining industry in Australia
Government of Australia’s investor friendly policies
Mineral and Petroleum Resources Policy statement of 1998 - a commitment to provide investors with positive, stable framework of relevant Government policies which to a large extent remove uncertainty and promote increased investment. Tenement system and legal framework is investment friendly; has therefore attracted large foreign investment - Grants for reconnaissance exploration and prospecting are made within a short duration of 2 to 6 months as against 12-24 months of delay in India. Consider a time limit for disposal of applications failing which “deemed approval” process applies. - There are no lengthy procedures of clearances from various organisations such as revenue authorities and the like at exploration & prospecting stages. Consider removing certain stages at the state Government level. - Government guarantees award of prospecting & mining rights to those who invest in grass roots exploration. In India, the law speaks of only preferences but no guarantees. Security of tenure is a “must have” when upgrading the prospect from RP to PL or PL to ML to attract large investments. - There are no limits on the extent of area to be granted on prospecting licence unlike India where a limit of 25sqkm is placed, with grant of larger areas subject to discretion of the State Governments
Quantum of exploration expenditure In the recent past smaller exploration companies in Australia have raised between US $ 150-200 million for exploration purposes every year. Canada has provided a substantially higher amount of US $ 3.3 billion in the same period inclusive of capital expenditure on mining. In India, estimates suggest that the total amount spent on precious metals exploration over the past 20 years has averaged a low US $ 35m per annum •A study of Western Australia Department of Treasury and Finance indicates that if mineral exploration investment were to increase by US $100m and be maintained for 5 years, projected cumulative benefits over next 20 years for the State would be $10.4 billion in investment, $45.8 billion in export revenue, $32 billion in gross state product and $1.7 billion in State Government revenue. All these, in addition to creation of several thousand new jobs and development of ancillary industrial units.
Gold potential of the Indian terrain Gold was known to Indians 8000 years ago. Ancient India witnessed extensive prospecting & mining for gold. There are more than 800 old workings recorded. Geologically, the Indian terrain is largely comprised of precambrian rocks. Similar rocks are known to contain large quantities of gold in parts of Western Australia, Canada, Africa, South America & China
DELHI Lucknow
Ahmedabad
Bhopal Nagpur
Mumbai
INDIA
Goa
Sidhi
Guwahati Ranchi
Culcutta
Raipur KIMBERLY BLOCK
Hyderabad
Hutti
CANNING BASIN
PILBARA CRATON
DHARWAR CRATON
WESTERN AUSTRALIA
Kolar Bangalore
Meekathara
Trivendrum
Perth
YILGARN CRATON
Kalgoorlie
There were over a hundred gold mining centres in the early part of the last century & these were mostly operated by the Britishers. The mines were located in parts of Kolar, Hutti, Gadag, Chitradurga & Shimoga in Karnataka; Wynad & Nilambur in Kerala; Kotagiri & Dharmapuri in Tamil Nadu, Ramagiri & Jonnagiri in AP State; Kunderkocha, Lawa, Mayisara & Sonapet in Jharkand; Sonadehi in Chhattisgarh; Parsori & Pular in Maharashtra. Gold panning by local people is a prominent activity in many parts of India. From a total of 127,242 tons of gold metal produced in the world, 76,500 tons came from precambrian terrains (Archaen & proterzoic). A major portion of India, barring the Indogangetic alluvial tract & Deccan lavas, is composed of precambrian rocks – yet our contribution to the precambrian gold resource is a meagre 1.17% (900 tons of which has come from a single precambrian belt ie Kolar) Gold-bearing potentiality of a geological terrain can be expressed in terms of kilograms of gold per sqkm area comprising gold metal already produced + gold reserve in the ground identified by exploration & available for mining in the future. For Western Australia this index works out 50kg/sqkm, for Canada 55kg/sqkm and for S. Africa it is 80kg/sqkm. In comparison the index for India is a mere 1.6kg/sqkm (excluding Kolar) inspite of the fact that India has been known for wide spread gold mining in the past. Surely there is much scope for finding new mineable gold resources in the country.
How Deccan Gold can become a major Gold Producer?
Factors favouring Deccan Gold •
Geological terrain with potential to deliver Mines (Ganajur, Hirenaganur and others)
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Excellent results from exploration
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Depth of technical expertise available to the Company both Indian and International
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Strategic investment by Sun Mining & Exploration Ltd into Deccan Gold - provides funding, access to gold prospects internationally , additional expertise
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Capacity and commitment to accelerate our spend rate on exploration
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Several Prospecting Licence applications lodged with the Government awaiting approval
How Deccan Gold can become a major Gold Producer?
How the government can help us •
Create mining Industry regulations and offer tax incentives that foster favourable investment into exploration companies
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Fast track the conversion of RPs into PLs, grant of larger areas under PLs, matters relating to forest clearances, deletion of some of the time consuming unnecessary steps for grant of PLs, upgrading of the guidelines and rules to remove anomalies and security of tenure are some of the key issues that need addressing.
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Encourage more research and development through grants, 150% write offs
How Deccan Gold can become a major gold producer? There have been several representations made to the Government by various organisations including FIMI on what improvements are required to the Mining regulations and the Act. The Government should act on these suggestions. I believe training of appropriate government personnel in the understanding and execution of the Mining regulations is a must Government agencies (GSI & MECL) become more actively involved with the private explorers to exchange information that could lead to discoveries. THANK YOU.