The large quantities of wood chips produced at mines from damaged underground timber contain gold that cannot be completely recovered by cyanidation. A fungus that cart degrade a portion of the wood matrix will allow the gold that was previously locked up, to come into contact with the cyanide solution, thereby improving recoveries. The fungus Phanerochaete chrysosporium produces enzymes that use rite organic compounds found in lignin as substrate. Consequently, the fungus is able to selectively bleak clown lignin which is one of the major components of wood. Chips sampled from Vaal Reef Gold Mine in South Africa contained between 2 and 5 mg/kg gold. The main source of gold in the chips were determined to be impregnated gold-bearing ore and discrete gold particles. Direct cyanidation resulted in 60 per cent recovery, prior to biological treatment. Despite relatively high weight losses caused to the chips as a result of treatment with Phanerochaete chrysosporium, the gold recovery, could only be improved by 10 per cent.