Oceana Gold Corp has increased its exploration budget at Reefton by almost 60% to $US4.4 million ($NZ6.2 million) as it seeks to add a second underground operation to its open pit operations on the West Coast.
In 2008, at Macraes in east Otago, OGC commissioned Frasers, its only underground mine, which cost $US54 million to develop.
It is expected to deliver 55,000oz to 65,000oz a year, for at least three years.
OGC chief executive Paul Bibby said the increased exploration activities at Reefton would focus on new drill programmes to identify potential underground mining targets, reflecting the "significant prospectivity" around Reefton, which had historically delivered 8 million oz of loose, alluvial gold and 2 million oz from trapped, hard rock gold.
Another beneficiary of the increase will be OGC's 640ha Sams Creek tenement near Takaka, bordering the Kahurangi National Park, where there is an estimated 770,000oz of gold.
The prospect was discovered in 1974 and lies in rugged terrain, about 50km northwest of Nelson and has been test-drilled by Oceana in the past.
