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Financial Mail highlights Falklands “gold” future

Tuesday, February 28th 2006 - 21:00 UTC
Full article

The potential for gold exploration on land and drilling for oil and gas offshore in the Falkland Islands are highlighted in an article by Brendan Ryan published in the NZ Financial Mail under the heading, “There's gold in them far Islands”.

Ryan writes there's "a lot riding on the outcome of the gold exploration work being carried out by Falkland Gold & Minerals (FGML) as well as the drilling work due to start within two years on the potential oil and gas basins inside the 200 mile nautical zone around the Falkland Islands that the Islands' government has claimed as its own".

The article quotes Phyl Rendell Director of Mineral Resources emphasizing the responsibility the government of the Islands has in developing a "sustainable economy" and "the fierce need to be economically independent" since the British government is not a benevolent organization.

"The government of the Falkland Islands welcomes the interest as a means to freeing its economy from the current dependence on fishing revenues, which account for 44% of GDP".

The executive chairman of FGML is mining entrepreneur Richard Linnell, whose company raised £10 million in London's Alternative Investment Market in December 2004 claims the successful listing was due to "favourable market timing and a good understanding of how to approach institutions prepared to fund this kind of high-risk, high-reward venture".

The bull market in gold is working strongly in favour of exploration groups to the more under explored parts of the world - like the Falklands and China - as well as countries viewed until recently as high risk, such as the Democratic Republic of Congo.

The exploration programme now under way was attracted by traces of gold present in many of the streams on the Falklands. FGML operations manager Derek Reeves first went to the Falklands in 1999 looking for diamonds but his initial stream sampling programme showed instead extensive traces of gold, which ultimately led to the present exploration campaign.

Apparently the Falklands have more than 50 "targets" in the form of geological "anomalies" that could contain gold but need to be drilled to get confirmation.

Operation Manager Reeves said that 23 key targets have been chosen which are being worked methodically using two diamond drilling rigs with some traces of gold but these have all been "sub economic". Apparently three different types of gold, in terms of chemical composition, have been identified

FGML is expected to have £5m left of the funds raised by about January 2007. At that point a decision will have to be made on whether the data disclosed by the "exploratory drilling" phase is sufficient to justify the next stage of the programme: "definition drilling" aimed at proving up a viable deposit.

Photo courtesy "Penguin News"

Categories: Falkland Islands.

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