Hawkeswood Mining Ltd operations manager Simon Johnstone this week denied illegally mining at Miller’s Flat and told the Otago Daily Times a diversion agreement between the company and the Crown was simply "a business decision".
He went further and said the Ministry of Business, Innovation and Employment (MBIE) could not clearly distinguish between test pitting and illegal mining.
Yesterday, he "unreservedly" withdrew his statements and apologised to the MBIE for "implying, incorrectly, that the Crown minerals regulator had misunderstood the nature of Hawkeswood Mining’s activities at its exploration permit".
Hawkeswood Mining owner Andrew Hawkeswood said Mr Johnstone had expressed his "own personal views on what had happened".
"They certainly weren’t the company’s views, and my views," Mr Hawkeswood said.
Mr Johnstone had been stood down from his role as general manager at Miller’s Flat until further notice, he said.
"Upon being investigated by MBIE, Hawkeswood Mining made an early admission that our earthworks under our exploration permit exceeded an ordinary definition of test pitting," Mr Hawkeswood said.
"That admission led to a favourable outcome earlier this month in proceedings MBIE brought against the company for illegal mining, that being diversion.
"We were intending to clear enough terrain to assemble a dredge below the water table, with an eye to any risk of water ingress from the Clutha River.
"The appropriate setting for this work was under a mining permit, which was since granted to us."
In a statement earlier this month, the MBIE said officials saw satellite imagery of Hawkeswood Mining’s Miller’s Flat site "showing large-scale opencast mining", when the company only had an exploration permit.
Mr Hawkeswood said the company never went out to purposely break the law and had been "very aware" of other prosecutions.
Extracting gold was a by-product of exploration, he said.
"And we always believed that we were in the right."
However, during the course of the investigation, the more he looked at the Crown Minerals Act 1991, the more he came to realise "perhaps we had made a mistake", Mr Hawkeswood said.
The company was charged and he was charged personally.
He said the MBIE could see the company had not acted maliciously and was not purposely trying to break the law and offered the company diversion.
"And we graciously took it."
The company paid royalties for the gold to the Crown and agreed to a sizable donation to a charity, understood by the ODT to be in the tens of thousands of dollars.
Mr Hawkeswood said Mr Johnstone’s statements had come as a "complete surprise".
"He [Mr Johnstone] sort of felt that we were still hard done by, and he’s entitled to his personal view, but he just couldn’t portray it to be the company’s view."
Hawkeswood Mining’s gold mine at Millers Flat got the go-ahead in August and work is expected to start this month.
The company expected to work in the area for 15 years and he wanted to work well with the ministry, Mr Hawkeswood said.
MBIE national manager of compliance for New Zealand petroleum and minerals Phil Latimer said the ministry had raised concerns about Mr Johnstone’s comments with Mr Hawkeswood.
"While the conditions of the diversion agreement are confidential, Mr Johnstone’s comments were contrary to the facts agreed between MBIE and Hawkeswood Mining during that process.
"We welcome today’s statement from Mr Hawkeswood as it demonstrates an operator that respects and takes seriously their obligations under the Crown Minerals Act," Mr Latimer said.
The mining operation is expected to bring $90 million to the wider New Zealand economy, $28m of which will be local employment and royalty payments.
