AUSTRALIAN mining company Red 5 Ltd. found gold during early drilling in Mapawa, an area located near its Siana gold project in Surigao del Norte.

?We?ve known there was gold at the surface. But we?ve got some evidence of mineralization at deeper levels,? managing director Greg Edwards said in a phone interview.

Red 5, the Perth-based company whose shares are traded on the Australian Stock Exchange, earlier published a report saying that the inaugural deep drill hole at Mapawa was extended by 100 meters beyond the original plan to a final depth of 546 meters due to the favorable geology.

The report said the first hole yielded mineral content of a gram of gold per ton at a depth of 189 meters.

Mapawa lies 20 kilometers north of the Siana gold mine development.

Red 5 is now on its third hole, which could go down to a depth of 1,000 meters.

The company started exploration drilling at Mapawa in January this year, and Edwards said the company would be well funded to pursue an active exploration program if warranted.

The company is spending about P150 million initially for its drill program.

Further development could take about three or four years, he said.

Edwards expressed excitement over the prospect of having another development project after Siana.

?The copper and gold resources in the Philippines are among the best in the world. We?re excited to show that these resources can be explored and tapped in a responsible, environmentally friendly manner,? Edwards said.

Last December, Red 5 completed its fund raising activities for the development of the $73-million Siana gold project.

Meanwhile, for the Siana project, Red 5 hopes to produce over a million ounces of gold.

The Siana gold project?s 12-year life span is seen to be split evenly between open pit and underground extraction.

Gold is currently priced at around $1,115 per ounce.