Gold profits from a seven-year mining project at Earnscleugh are expected to be more than double what L and M Mining Ltd first envisaged.
A recent rise in the price of gold to about $NZ1600 an ounce was the sole motivating factor in L and M's decision to rekindle its gold mining project, first granted consents in 2001.
After an Environment Court granted the company amended consents in 2004, about 255ha of land at Earnscleugh had remained untouched until this year.
L and M exploration manager David Manhire said despite a predicted drop in the amount of gold to be mined, the company's profits would exceed those levels predicted in 2001.
"At that time we were looking at getting 150,000 ounces of gold over seven years, and now we are looking at 110,000. Gold is worth significantly more now than it was in 2001, when it fetched about $600 an ounce, and subsequently it is at a level where the shareholders are comfortable with going ahead," he said.
Mr Manhire said the company regularly assessed its likely profits, although such figures were commercially sensitive.
He said while gold had risen in price since 2001, so had the costs of mining due to hikes in fuel, staff wages, and other operational expenses.
An economic boost to Central Otago was difficult to predict in detail, Mr Manhire said.
Surveyors and other initial ground staff will start working at Earnscleugh this month, followed by miners in July.
A water management system will be established, soil stripped, and mining started.
Mr Manhire said the resurfacing of the mined land would be progressive, so the project's overall footprint was limited.
"We strip soil from in front of the plant and place it behind the mine on land which has been levelled, so the disturbance is kept at a minimum and we are tidying up as we go," he said.
The actual mining process used water to extract gold from gravel and no chemicals were put into the ground, Mr Manhire said.
