Australian prospector Santana Minerals Ltd expects to apply for resource consent for mining later this year after the results of test drilling at the 272sq km Bendigo-Ophir gold prospect, about 10km from Tarras.
The drilling had estimated 2.9 million ounces of gold which at today’s prices would be worth $9.4b.
Agreements to allow mining have already been reached with significant landowners Bendigo Station, Ardgour Station and Matakanui Station.
In a presentation to investors, the company laid out a strategy which included the potential for both underground and open pit mining.
Chief executive Damian Spring, of Arrowtown, told the Otago Daily Times he hoped consent applications would be lodged with the Central Otago District Council and the Otago Regional Council later this year.
Santana’s filing to the Australian stock exchange noted a clear pathway to permitting a mine with a pro-mining government in place since November last year.
Mr Spring said the December repeal of the Natural and Built Environment Act gave the exploration company the certainty to move forward under the known processes of the Resource Management Act.
"A project of this size needs the label of a project of national significance," he said.
Asked what future business could be worth to the local economy, Mr Spring said that had not yet been calculated.
Video from 2022
The company still needed to work out what the mine could look like, how much it would cost and the value it would produce, he said.
"Broadly speaking", the company was already spending about $1m a month on drilling contractors and suppliers, he said.
Those payments were going to New Zealand companies and the funds were provided by shareholders, of whom about 40% were New Zealanders, Mr Spring said.
About 50 workers were engaged by drilling contractors during the height of last year’s programme.
There were now 30 people working on site, he said.
"That makes for quite a significant employer in the district."
The Macraes mine in East Otago, the country’s largest active gold mine, employs more than 600 people.
Since it opened it 1990, Macraes owner OceanaGold has extracted more than 5 million ounces of gold.
Santana told investors just a small part of the Bendigo-Ophir prospect has been drilled and studied so far.
In December, the drilling permit was extended for another five years by New Zealand Petroleum and Minerals, and Santana is preparing to extend research to the wider site.
The Rise and Shine site was the most promising, but exploration was also finding good results at the Come In Time, Shreks and Shreks-East sites, Mr Spring said.
Baseline environmental studies had either been completed or were under way.
Ecological studies had also begun, taking in the presence of plants, bats, skinks, geckos, invertebrates, moths and pests.
Mr Spring said he had previously engaged with mana whenua through the Aukaha consultancy and was looking forward to making arrangements to meet local runaka soon.
No formal community engagement has taken place yet, but school groups had visited to learn about what Santana Minerals was doing at Bendigo, he said.
Key points in history
1862: Alluvial gold discovered at Bendigo during the Central Otago gold rush.
2016: Matakanui Gold Ltd granted exploration permits at Bendigo-Ophir.
2019: Exploratory drilling begins.
2020: Santana Minerals buys Matakanui Gold and raises $A7.5 million to fund exploration.
2021-2023: Drilling and infill drilling continues.
