it said it may be able to increase the gold resource at its Frog's Leg project, on the back of positive assay results from its first diamond drill program at the WA-based project.
Frog's Leg contains a gold resource of 864,000 ounces (grading 5.9 grams a tonne) across two known deposits.
"We are confident the current drilling program has the potential to add up to 500,000 ounces to the current resource inventory," managing director Rhod Grivas said.
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Results of 3 diamond holes recently drilled at the East Mungari gold project have been released. Better intersections included 8m @ 17.08 g/t Au from86-94m and 2m @ 17.52 g/t Au from 138-140m. This project is held 5l% by Mines and Resources (part of the Cogema group) and Dioro 49%, with Mines and Resources the project manager. The directors further advise that it is the current intention of Dioro to transfer its 49% interest in the East Mungari gold project to a wholly owned subsidiary for consideration of $3,000,000 with such consideration being satisfied by the issue of 10,000,000 fully paid ordinary shares issued by the subsidiary at a price of 20 cents each, plus $1 million cash. Dioro will also receive 5,000,000 options exercisable at 20 cents on or before 31 March 2005. It is proposed to issue a total of 30,000,000 fully paid ordinary shares in the subsidiary at an issue price of 20 cents each, with a view to listing the entity. This would give Dioro a 25% investment in the project interest. Subject to the exercise of options held by Dioro shareholders, the 30,000,000 shares would be issued at 20c each as follows:
* Approximately 21,600,000 shares to existing Dioro shareholders on a 1 for 10 priority entitlement basis; * Approximately 8,400,000 shares by way of placement.
DIO Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
