Losses at gold explorer Glencar Mining widened last year after the company stepped up exploration activities at its Komana West project in southern Mali, and incorporated the cost of share options into its profit and loss account.

In a statement to the Irish Stock Exchange yesterday, the Dublin and London-listed company revealed a loss of $1.45 million (€1.1 million) for 2006, a year the company described as another exciting one.

Managing director Hugh McCullough said drilling at the Komana West deposit - the group's main project - was progressing well, and was on track for the resource estimate of the gold contained within the site to be complete by September if not earlier.

He said drilling would resume in October once the rainy season was over. It would continue until this time next year, when the company would be in a position to release a more precise reserve estimate.

This would be used to decide whether to dig for gold commercially.

Mr McCullough said no actual drilling for gold would take place until at least 2009, and more likely not until 2010.

Glencar last month completed a 22.6 million share placing, raising £2.4 million to fund exploration.

Mr McCullough said yesterday the company now had sufficient funds to take it through to the reserve study stage and to continue initial exploration at its other projects, Sankarani in Mali and Aseba in Ghana.

Glencar said yesterday it had written off investment in its two Irish licences in Co Laois as a result of the significant expense associated with the deep drilling required at the sites.

Mr McCullough said the gold found so far at the Komana West site was of a high quality.