Mining company Catalyst Metals began reconnaissance at the site, 60km north of Bendigo, in April last year, and just recently finished drilling 100m below the earth.

Catalyst said its latest aircore drilling program had successfully located a rich gold zone.

“The exploration intersected a new zone of gold mineralisation,” Catalyst technical director Bruce Kay said.

“Although the intersections are relatively low grade they’re considered very significant and indicate close proximity to high grade gold mineralisation.”

Mr Kay said the intersections at the site have yet to be fully explored but could be brimming with gold.

“It all depends on how spread out the gold is and how many ounces we find,” he said. “An encouraging feature of the area is the shallow basement and the obvious presence of multiple quartz veins.

“At this stage we’re going to continue drilling that specific site and a higher-capacity rig has been booked for early February.”

The value of the gold zone was hard to gauge without further drilling, Mr Kay said.

But he said it was a potentially lucrative area that had yet to be explored.

“The first gold was found at the site around May 2010, and since then we’ve broadly outlined the area we plan to focus on,” he said.

“It’s a totally unexplored area, which is quite rare.”

Catalyst metals, a Western Australian based company, acquired the Four Eagles gold project in January 2011.

The company is currently in negotiations with Unity Mining in a 12-month option agreement to take

over the Kangaroo Flat gold plant.