Adelaide, Mar 14, 2006 (ABN Newswire) - Australasia Gold Limited (ASX: AAO) - which joined the ASX lists in January - today commenced its maiden drilling program on the Company's promising New Zealand prospect.

The program is testing extensions of known high grade gold mineralisation at the Company's 100% owned Wetherstones project, near Dunedin in NZ.

"We have today commenced a program of approximately 1000 metres of reverse circulation and diamond core drilling on the Wetherstones gold deposit," Managing Director, Mr Trevor Ireland, said today.

"Drilling is expected to be completed within one to two weeks, with results available around the end of April," he said.

Mr Ireland said Australasia Gold aimed to complete eight holes targeting the depth extensions of a down-faulted gold-bearing horizon.

"The shallower oxidised portion of the deposit was mined semi-continuously from both surface and underground between 1862 and 1933," he said.

"Exploration tunnelling completed in 1931 intersected a 100 metre interval within the probable trend of the extension of the areas then being mined, which averaged on sampling approximately half an ounce of gold per tonne (15 grams/tonne).

"This intersection was over a one-metre thickness at the base of the conglomerate, 50 to 100 metres below surface.

"Drill holes in this current program will be targeted to confirm those values and to test predicted extensions both to the north and to the south of the inclined adit."

Mr Ireland said research undertaken by Australasia Gold had indicated that previous efforts to exploit the Wetherstones gold deposits had been terminated due to limitations of the technology of the times rather than exhaustion of the gold lode.

Australasia Gold (ASX: AAO) joined the ASX lists on 18 January this year after closing its $3 million IPO oversubscribed.

As well as the NZ gold project, the Company's interests include the Glencoe gold deposit in the Pine Creek region of the Northern Territory which is ready for a feasibility study leading to potential development and early cash flow.

The Glencoe deposit contains a JORC-compliant resource of 90,000 ounces of gold. Production from the NT deposit could commence within 12 months of the Company's ASX listing, providing income to supplement exploration funds raised from the IPO.

It also holds interests in greenfields exploration areas of high potential, including the Lachlan project near Orange in NSW - an area that has yielded a number of significant gold discoveries.

Mr Ireland - a former Exploration Manager at North Flinders Mines and Normandy Mining - is the geologist credited with discovering much of the world class Granites and Callie gold deposits now operated by Newmont Mining in the Tanami Desert region of the Northern Territory.

He is joined on the Australasia Gold board by Directors with extensive minerals industry experience, namely former Homestake Gold of Australia Ltd Managing Director, Mr John Roberts as Chairman, and Messrs Norton Jackson and Mick Billing.

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