Adelaide, Dec 24, 2006 (ABN Newswire) - An extensive drilling program has been commenced by Ramelius Resources Limited (ASX: RMS) to determine both the open pit cut-back and the underground mining potential of its Wattle Dam open-pit gold mine near Coolgardie in Western Australia.

The 7,900 metres of Reverse Circulation drilling is expected to be completed by February next year to delineate further resources and evaluate its mining potential.

The start to drilling follows the completion by Ramelius of its highly successful nine-month open-cut mining operations at Wattle Dam, eight kilometres south of Coolgardie.

The latest 30,000 tonne ore parcel from stockpiles from this mining schedule is currently being treated at the Greenfields Custom Mill. The tonnage has an estimated grade from grade control drilling of 10 grams of gold per tonne, with processing expected to be completed by mid next month.

Future gold ore from Wattle Dam, and any other satellite pit developments by Ramelius within the province, will be treated through the Company's 100% owned Burbanks Gold Processing Plant, being acquired from Coolgardie Custom Milling for $2.8 million. Final payment is due in March.

"The underground drilling program will work from within the Wattle Dam pit to evaluate, in particular, the Western Zone, as well as drilling from the surface to test for extensions to the north and the south," Ramelius' Managing Director, Mr Joe Houldsworth, said today.

"We plan to drill to around 200 metres depth which should generate sufficient data to assess the potential for both a cut back of the existing pit, and more significantly, the potential for a subsequent underground development," Mr Houldsworth said.

In addition to the parcel currently being processed, Ramelius has about 100,000 tonnes of ore still in stockpile at a grade of 10.1g/t gold - equivalent to around 33,000 oz of gold.

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