The Jonnagari Gold Mines, located in Kurnool district, Andhra Pradesh, have received final government approval. Deccan Gold Mines Limited will operate the mine, with projected gold production of 400 kilograms in the first year, increasing to 750 kilograms annually thereafter.
Andhra Pradesh: A significant milestone has been achieved in India's mining sector – the opening of a new gold mine, the first since independence. The Jonnagari gold mine in Kurnool district, Andhra Pradesh, has received final government clearance. Deccan Gold Mines Limited will operate the mine. According to government officials, approximately 400 kilograms of gold will be extracted in the first year, with production scaling up to 750 kilograms annually subsequently.
This mine will not only boost the country's gold supply but also significantly reduce India's reliance on gold imports. This marks the commencement of a new gold mine in the country for the first time since independence.
Jonnagari Receives Approval
The Jonnagari Gold Mines in Kurnool district, Andhra Pradesh, have been given the green light to commence operations. Deccan Gold Mines Limited, in collaboration with its partner GeoMasure Services (India) Private Limited, will jointly operate the mine. Hanuma Prasad Modali, Managing Director of Deccan Gold, stated that this is the first new gold mine to be established in India since independence. He added that the mine and processing plant may take a few months to commence full operations, allowing for initial trial runs.
Starting at 400 Kilograms, Targeting 750 Kilograms
According to the company, approximately 400 kilograms of gold will be extracted in the first year. Once the mine reaches full operational capacity, the annual production is expected to reach approximately 750 kilograms. Modali anticipates earnings of ₹300-350 crore in the first year, with an EBITDA margin of around 60%. The extracted gold will be sent to nearby refineries for purification.
Share Price Surge, Investor Confidence
News of the mine's approval resulted in a sharp increase in Deccan Gold's share price. The company's stock surged by 14.28%, reaching ₹170.50, its highest level in ten months. Although the stock price slightly retreated to ₹163.70 by the end of the day, it still registered a 9.72% overall increase. Deccan Gold's shares have appreciated by over 58% in the past year.
Boost for Domestic Gold Mining
India has high gold consumption but low domestic production, relying heavily on imports, which puts pressure on foreign exchange reserves. Projects like Jonnagari will help India increase its domestic gold production, reducing reliance on imports. This will also create local employment and boost the mineral sector.
Deccan Gold Mines: An Overview
Established in 2003 and headquartered in Bengaluru, Deccan Gold Mines Limited focuses on the exploration and mining of gold and other minerals in India. It is the first listed Indian company dedicated to gold mining. The company claims to employ modern technology while maintaining environmental sustainability.
