The discovery of gold always excites investors. Even dirty crude oil is glamorised as black gold. Last week, investors were given tasty morsels of information by two companies. Shareholders in Irish Marine Oil, whose chairman is Dr John Teeling, were told their company had discovered "high-quality gold" near Carnew, Co Wicklow.

Conroy Diamond and Gold went one better and declared that the Clontibret prospect in Co Monaghan "may (my italics) host Ireland's first major gold mine". Both statements are true but both companies are a long way from declaring the finds commercial. Indeed, the odds are very high against IMO. The Conroy find is more interesting but it needs to carry out many more tests and faces difficult hurdles before it can claim to operate Ireland's first major gold mine.

For a gold mine to be commercial, it ideally needs to have a high-grade ore, a wide vein of gold and adequate reserves. It can get by with very high grades in narrow veins or, alternatively, reasonable grades with wide veins. However, it can never work with low grades and narrow veins.

IMO discovered high grades of ore, ranging from 12.05 grammes per ton to 22.50, in two holes but the width was very narrow, ranging from 0.5 metres to 1.1 metres. While these findings indicated significant mineralisation, they are not commercial on their own, and a lot of further drilling is needed. And this has been affirmed by IMO.

Conroy, established by Prof Richard Conroy, is much more upbeat. (He resigned from Conroy Resources - renamed Arcon International - which discovered the Galmoy zinc/lead prospect, three years ago after a dispute with Dr Tony O'Reilly whose family became major shareholders in that company). Conroy's statement said the drilling at Clontibret intersected "significant and numerous" gold-bearing veins/lodes in the vicinity of the old Tullybuck/Lisglassan underground workings. It drilled three holes grading 16.71 grammes per tonne over 2.42 metres, 10.52 grammes per tonne over 2.96 metres and 7.65 grammes per tonne over 1.82 metres.

While admitting that "no definitive reserves figures can be quoted at this stage", the company then went on to say that the structures "have the potential to contain three million tonnes of ore grading around 10 grammes per tonne". It went further to contend that even with the low gold price "such a deposit would be highly economic".

Asked how the company could come to such a conclusion from just three holes, Prof Conroy said the company already knew what was in 40 holes and there were additional data from the old mine. The new findings from new drilling methods gave the group confidence about continuity.

While the findings from the three holes are good, indeed very good, there is insufficient information to indicate probable or proven ore reserves. The company will need to drill a further 90 to 100 holes, at a cost of some £1 u2 million before it is in a position to carry out a feasibility study.

Findings similar to those from the three holes would indicate commerciality. But there is no certainty of that. And there is always the possibility of resistance from farmers, or local opposition groups. There is, for example, considerable resistance from farmers in some of the Wicklow prospecting areas. And a Mayo mine in which Glencar has a majority stake will probably never mine an ounce of gold, because of local opposition.

That mine, with grades of 19 grammes at 2.3 metres, 10.3 grammes at 4 metres, 7 grammes at 8.7 metres and 5.8 grammes at 2 metres, had potential. But even with 8,000 metres of drilling in 60 holes with high grades, it was never declared to be commercial. Glencar is now in the middle of a High Court action against the Mayo County Council.

If Conroy's feasibility study stands up, it faces many other hurdles. It would, for example, have to get an integrated pollution licence from the Environmental Protection Agency. Then it would have to look for planning permission and do an environmental study. And finally it would have to seek a mining lease from the Government.

Nevertheless, it is good to see the Clontibret prospect revisited again. And that might not have happened without Conroy's participation.

Conroy's last fund-raising was in April 1997 when it placed 500,000 shares at 50p each to raise u £250,000. The next one will be much larger but with the appetite from investors for exploration companies with potential, Conroy should not have much difficulty in raising fresh funds.

Since that issue the shares, quoted on London's OFEX - it quotes high-risk shares - have risen to 64.5p sterling (75p), so those investors are showing a 50 per cent gain. Prof Conroy paid around 3p for his shares (others paid the same two years ago) and he is showing a 25-fold increase on his holding, which is now valued at some u £3 million.