Australia's Kentor eyes gold on Great Silk Road

By James Regan

SYDNEY (Reuters) - Australia's Kentor Gold Ltd (KGL.AX: Quote, Profile, Research, Stock Buzz) will more than double its spending this year on mine exploration along the fabled Great Silk Road in Kyrgyzstan, encouraged by signs of a rich find and rising bullion prices.

Kentor has scoured Soviet-era geological data compiled on Kyrgyzstan's southern border region with China, laid rail lines and set up a regional office in the capital Bishkek since listing on the Australia bourse in 2005.

The company aims to have a resource estimate established by the year-end for its main project, the Savoyardy lode, where it has only been possible to bring in equipment by horse, limiting exploration activity to the warmer months, Managing Director Simon Milroy said in an interview on Monday for the Reuters Global Mining and Steel Summit.

"In the winter months you couldn't work up there, too much snow. We've rehabilitated the underground workings with a view to resuming drilling -- but from underground -- and we will be able to do that all year round," Milroy said.

"In May, when we expect the snow will be gone, we'll commence drilling from the surface as well."

Kentor, valued at less than $11 million, has relied mainly on data compiled by Cold War-era Russian geologists hoping to mine the deposits lining the Great Silk Road -- the route opened by Alexander the Great in the 4th century BC linking Eastern and Western civilizations.

The ancient trading cities along the Silk Road have been blighted through the ages by war, occupation, fire and famine.

Importantly for Kentor, said Milroy, the company's holdings fall inside the ore-rich gold belt that extends from Uzbekistan into Mongolia for 2,200 km (1,367 miles).  Continued...