Diamond drilling hit 22m at 6.3% copper and 0.3% cobalt from 258m, 19m at 3.7% copper from 315m, 31m at 6.2% copper from 346m and 23m at 8.9% copper from 395m.

The results came from a program targeting mineralisation extensions to the north and at depth of the current Mount Oxide resource.

Mount Oxide has an indicated and inferred copper resource of 15.5 million tonnes at 1.3% copper for 203,000 contained copper tonnes.

The company hopes the drilling will further expand the current resource and boost the potential of the project.

"These intercepts are outside of the current resource and have significant prospects at depth," Perilya executive chairman Patrick O'Connor said.

"The results are particularly encouraging for either defining a high-grade underground resource or deepening the planned openpit."

At the completion of the 2008 infill drilling program, a feasibility study is expected to start early next year.

A proposed merger between Perilya and mineral miner CBH Resources is still on the agenda, the company added.

Perilya shares were up 2c to 73c during mid-morning trade.