'Deccan Gold Mines an interesting play in the gold mining space'

Akash Jain

Deccan Gold Mines (DGML) is a unique company and an interesting play on gold mining. It is the first and only gold exploration company listed on the BSE, established in 2003 by promoters with deep roots in the exploration and mining sector.

DGML is involved in gold exploration in Karnataka and Andhra Pradesh where the activities have resulted in defining a number of gold prospects spread across these states.

Its ultimate objective is to advance these gold prospects into commercial gold production. DGML has so far explored an area of around 6,574 sq km in Dharwar Shimoga Greenstone belt, Hutti-Maski Greenstone belt, and Mangalur Schist belt in Karnataka.

Multi-parametric exploration techniques such as remote sensing studies, regional and detailed geological mapping, regional and detailed geochemical and geophysical exploration, topographic survey, various methods of drilling and multi-element chemical analysis were adopted in undertaking the exploration work, as per international standards.

India is a country rich in mineral resources. A major portion of the country is composed of Precambrian rocks which have hosted major gold discoveries worldwide. There were over a hundred gold mining centres in the early part of last century.

Despite having some of the best potential ground for gold mineralisation, India’s annual primary gold mine output has reduced significantly to below 5 tonne. India has suffered in developing its gold mining potential due to lack of adequate exploration expenditure, nationalistic policies of the previous governments and a non-investor friendly mineral policy.

The government is looking to revive mineral exploration and mining sector through foreign and Indian private investment and planned introduction of liberalised internationally compatible mining policies.

DGML with some of the best gold prospects in the country is geologically similar to areas that have been home to major world gold discoveries, playing a leading role in its revival.

It is very difficult to forecast earnings for such type of companies. We do not have a price target for the company. High risk investors can buy into this story which may turn to turn to gold in the future.