A potential three-year mine life extension beyond 2020 is in the offing for Oceana Gold’s mainstay Macraes mine in East Otago.
The company is applying for a large resource consent extension.
Exploration drilling this year around the existing Coronation pit area has been positive, prompting Oceana to apply to open up a new Coronation North pit, which would boost ore recovery by 70%, and might mean more jobs.
Because of boundary overlaps, Oceana is making applications to the Waitaki District Council, the Dunedin City Council and the Otago Regional Council, the latter application including a 27m-high dam in the Coal Creek catchment holding 685 million litres of water.
Oceana’s cover letter to the councils said the Coronation North project was an important extension of the Macraes group project and would add about three years to the project’s life, "with associated benefits in terms of employment and economic activity".
Oceana’s senior executives were unavailable for comment over the weekend.
Oceana’s chief executive, Mick Wilkes, said in late July in a report that extensive exploration drilling at Coronation North had revealed further potential mineralisation extensions, to the southeast of the previous drilling.
In April, Oceana extended Macraes mine life a further two years, the open pit operations to "2019+" and Frasers underground to "2018+", on the back of overall estimated gold resources increasing to more than 11 million ounces, across New Zealand, the Philippines and the United States.
Oceana wants to have the existing Coronation area, which was started in September 2014, expanded 37% from 62ha to 85ha, with expected ore recovery to increase 70% from 5 million tonnes to 8.5 million tonnes. Submissions on the application close on August 19.
Coronation North is on the Taieri Ridge, between Sister Peaks and Highlay Hills, north of Horse Flat Rd, and about 7km from Macraes Flat township.
In the Dunedin council application, Oceana notes the project would "add approximately 3 years of operations" to mine life, with the mining and rehabilitation taking about five years.
At Macraes, Oceana has completed 14km of exploration drilling during 2016, with its focus on resource development drilling at Coronation North, Coronation open pit, Coronation South, Horse Flat and Frasers underground targets.
It had pencilled in about $US2million-$US3million for Macraes exploration this year, from a total global spend of up to $US33million ($NZ45.8million).
Now in its 26th year of operation, Oceana is zeroing in on having produced 5 million ounces of gold, largely from Macraes which has been its mainstay mine, and which employs up to 600 staff.
During the past 60 days, global gold spot prices had risen from $US1240 to hit $US1370, but yesterday dipped from about $US1362 to $US1335 on the New York trading platform.
For its first-half 2016, combined Macraes and Reefton mines produced 70,929 ounces of gold, including 31,941oz produced from Macraes-only in the second quarter.
With Reefton having since been mothballed, in the face of then declining gold prices and increasing production costs, Oceana highlighted at the time each of its mines had to stand on its merits; meaning the most profitable mines would not subsidise underachievers.
As part of the consenting process, Oceana is also in discussion with the Department of Conservation and Kati Huirapa ki Puketeraki, on behalf of three rununga, and Heritage New Zealand.
