Adaption of mine designs during the past year was the theme for the major companies opening the annual Australian Institute of Mining & Metallurgy (AusIMM) New Zealand branch conference in Hamilton yesterday.
To a backdrop of crashed commodity prices, increasing costs and the high New Zealand dollar, Oceana Gold, Solid Energy and Newmont Waihi Gold all presented their respective adaptions, to meet the most challenging times for the sector in recent years.
Consultant Tony Haworth of capital raisers and merger and acquisition specialists Campbell MacPherson voiced a sobering view of the year just passed.
''Is there any good news from the global markets?'' he asked the 290 conference delegates.
Gold had plunged from $NZ2000 in 2012 to around $NZ1500, coking coal was down 40% to $US130 and ironsands were down about the same as coal to below $NZ100 per tonne.
While commodity prices had descended off the pricing graph, Mr Haworth believed the prices at least bottomed out during 2013, with even the Chinese coal-mining sector feeling pain at $US130 per tonne.
Of major concern was the global capital-raising for the resources sector having grown only slightly, to $US272 billion, but worryingly, the global exploration purse was down 30%, to around $US14 billion.
While exploration permit spending was up 16% to $42 million, prospect permitting was down 67%, to a ''meagre'' $3.7 million.
While the country was well ranked - 32nd of 112 jurisdictions by the Fraser Institute as an exploration target - it was otherwise seen as weak in mineral potential.
Oceana Gold chief operating officer Michael Holmes was relatively upbeat, given wide-ranging mine design changes at Reefton on the West Coast, and Macraes in East Otago, which has included the loss of more than 250 staff and contracting jobs during the past year.
''There is still a lot of gold in the ground [estimated] around 8 million ounces,'' he said.
The mine life of Reefton, Macraes open pit and its Frasers underground are all drawing to an end, the last to finish by late 2017.
However, Mr Holmes said decisions were expected this year on the West Coast Blackwater project, Round Hill at Macraes, and the northern edge Coronation pit at Macraes had been brought forward and was entering its early start-up stages.
He emphasised there was no timeline for decisions on Blackwater or Round Hill, other than potentially moving to feasibility studies during the year.
Round Hill would require resiting of the processing unit, costing about $3 million.
Over the next two years, six million tonnes of stockpiled ore would be used at Macraes, with less being taken from the pits.
While production costs remain high in New Zealand, Oceana's expanding Didipio gold and copper mine in the Philippines last quarter provided 90% of the entire group's profit margin; the copper by-product off-setting gold processing costs.
''New Zealand has been tough, and continued to be tough . . . the majority of costs are in New Zealand,'' he said.
• Reporter Simon Hartley was hosted to the conference by AusIMM.
