Oceana Gold has paired up with ASX-listed MOD Resources, of Perth, to explore its long-held Sams Creek tenement in the Tasman district of the South Island.
MOD's chairman in Perth, Miles Kennedy, was the founder of Macraes Mining Company in the late 1980s. He sold the company in 1993, and it later became the triple-listed Oceana Gold.
Sams Creek, in a remote and mountainous region near Takaka, has been held by Oceana since 1991 and barely rates a mention in recent annual financial reports, other than as an "inferred resource" estimated at 770,000 ounces, a figure reported since about September 2004 after test drilling.
Oceana owns 100% of the Sams tenement, but a subsidiary of MOD will fund all exploration costs to earn up to 80% project-interest, and additionally give Oceana either 10 million or 17 million shares, valued at respectively $A1.6 million ($NZ2.05 million) or $A2.72 million, depending on exploration outcomes.
MOD shares gained 1c to A19c, while shares in Oceana were up 1.8% to $NZ3.31.
Mr Kennedy said an $A1.9 million drilling programme was scheduled to begin next month, including an aeromagnetic survey and a high resolution topographic survey.
"There is obvious scope for an increase in the [estimated] resource, both within the main zone prospect, where the existing 77,000 ounce resource has been defined, and the various other targets along 6km of strike," Mr Kennedy said in a market statement yesterday.
In early 2003, when Oceana's predecessor GRD Macraes was exploring the area, it sent a red flag to environmentalists concerned the tenement was so close to the Takaka River, in steep hill country covered by beech and kamahi forests, and bordered by the Kahurangi National Park.
Oceana went on to develop its Reefton open pit West Coast operation and Frasers underground at Macraes and is committed to getting its gold and copper development mine in the northern Philippines operational by the end of next year.
• MOD's other interests are an ongoing test drilling programme for copper in Botswana.
Sams Creek 'resource'
• Discovered by Rio Tinto 1974.
• 100% owned by Oceana Gold.
• Permit covers 30.6sq km.
• Includes 46 diamond test drill holes.
• Estimated to hold 770,000 ounces of gold (none recovered).
• Last drilled 2004. New drilling next month.
