INTREPID gold explorers have extended their search for the precious metal to Iran, a country largely untouched by Western mining companies.

Persian Gold, a minnow headed by John Teeling, the Irish entrepreneur, is in the process of starting an extensive sampling and drilling programme over 280 sq km around Takestan, in northern Iran. Persian has raised £1 million through a placement arranged by Rowan Dartington, the house broker, before a listing on AIM in the next few weeks that should value the company at £13 million.

The gold price is trading near 16-year highs of about $441 per ounce and analysts expect it to reach $500 over the coming year on the back of dollar weakness and inflationary fears.

Persian’s ambitions highlight the trend by explorers to look outside the traditional goldproducing regions of Africa, Australia and the Americas for new finds. Target areas include the former Soviet Union states, China and Greenland. While the new targets often boast low production costs, they present logistical and environmental problems and higher political risk. Persian, for example, was yesterday confronted with a new ultra-conservative Iranian President after a surprise election win for Mahmoud Ahmadinejad, the former mayor of Tehran.

Persian will be the 29th mining company to list on AIM this year, increasing the amount of money raised to about £106 million. Ernst & Young’s Mining EYe index, which tracks the shares of the 20 biggest mining companies on AIM on a quarterly basis, is trading at January 2004 levels after weak metal prices hit mining stocks in April.