Malaysian explorer Peninsular Gold has increased its resource estimate at its Raub project by 81 per cent to 107,000 oz.

AIM-quoted Peninsular, which is operating in Malaysia's central gold belt not far from fellow AIM counter Avocet's Penjom mine, says further drilling could add more to resources at Raub, an old mine formerly operated by an Australian group. Chairman and chief executive Dato Andrew Kam says he expects to start gold production there early next year, generating monthly cash flow of �550,000, with extraction costs of $163 an ounce against gold's current market price of �668 — and five years of tax below 5 per cent following the Malaysian authorities' award of 'pioneer status' to Raub.

A larger-scale project in the same region is Tersang, with a present inferred gold resource of 500,000 oz. Drilling has begun there and Kam says he intends to establish a resource of one million oz at Tersang within 15 months, with an eventual target of five million oz.

He adds that Peninsular has �5 million cash, following a �4 million placing in March at 50p and the more recent issue of �1 million-worth of shares at the same price to Singaporean group Granite Peak. This group now holds nearly 4.5 per cent of Peninsular as well as 1.5 million convertible preference shares.

At 52.5p, Peninsular offers speculative possibilities, provided mining market sentiment recovers from recent nervousness.

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