ARCON International's reserves at its Galmoy, Co Kilkenny, lead zinc ore body have increased by 25 per cent over the past six months to eight million tonnes, according to the chairman, Mr Brendan Gilmore.

Speaking at a well attended annual general meetings in Dublin yesterday, Mr Gilmore told shareholders that its exploration operations over the past six months at Galmoy had yielded a sharp rise in reserves and continued to deliver "very positive" results.

"Arcon has achieved all ambitions and promises made to shareholders last year, Mr Gilmore told more than 120 shareholders in attendance. A policy of "drill, drill, drill" will continue at Galmoy, he said, stressing that Arcon intends to extend the life of the mine for as long as possible.

To date, Mr Gilmore said, it had primarily concentrated its drilling activities on the "K Zone" lead and zinc deposit, the extension of its "G Orebody" deposit, and the drilling of other new zones adjacent to Galmoy.

Furthermore, Mr Gilmore said, he was "very confident" that Arcon will increase its reserves again next year. The fact that the first major target drilled had shown good results, he said, was "very encouraging".

On its other exploration activities, Mr Gilmore indicated that a couple of parties had expressed, an interest in forming a joint venture to develop Arcon's wholly, owned Helvick oil field, off the Waterford/Cork coast.

This field, which has a possible yield of between three and five million barrels of oil, could be developed within the next two years, with a joint venture partner providing either loan or equity finance to fund the project, he said.

Arcon's deputy chief executive, Mr Tony O'Reilly jnr, said it was likely the company would need to raise between $15 million and $25 million from a potential partner to finance the development of the Helvick field.

However, Mr Gilmore stressed that Arcon was satisfied to postpone its development until oil prices recover on international markets. The project, he said, would be "self financing" and he ruled out any further rights issues by the company.

In Papua New Guinea, where Arcon has three licences in the Papuan Fold Belt, Mr Gilmore told shareholders there had been many oil and gas finds in the area over the past 12 months. It now plans to develop one of these licences he said, subject to a farm out deal.