Golden run keeps trucking

To borrow a line from Charles Dickens, it is the best of times and the worst of times to be a gold-mining company.

World prices for the precious metal are sky high ... but here in New Zealand mining has become something of a dirty word. Opposition has been so great the Government has now backed down on a scheme even to assess whether schedule 4 conservation land should be opened to mining.

"I think when you ask a question about mining, a lot of people don't understand what modern mining is about," said Mark Cadzow, chief operating manager of OceanaGold – New Zealand's largest gold producing operation.

"We've struck what I believe is a good balance between extracting the resource and continuing to be a sustainable and environmentally responsible company.

"At the end of the day things are either mined or they are grown. People have to understand to have the particular lifestyle we have, you have got to have mining. So therefore, mining in an environmental sensitive way is what people are looking for."

Open pit mines such as Oceana's main operation at Macraes were always going to be the best way to extract gold close to the surface, Mr Cadzow said. As the gold became deeper underground mining – such as the nearby Frasers – was preferable.

Either way, large piles of rubble and big holes got left behind, and what happened at that stage made all the difference. Oceana took a lot of time and trouble to rehabilitate mined land, Mr Cadzow said.

"The perception people have of mining is huge waste dumps and large holes in the ground. Where it's opportune, we will backfill those holes and all of our waste rock is rehabilitated to a standard that is probably better than the grassland that was there before ... we get contractors in to do the remedial stuff and we have an environmental team out there. We also have a team here in the office which deals with consenting issues and things like that."

The company's efforts to be a good neighbour to the nearby Otago towns include lending a hand to rehabilitate local wetlands, establish-ing a heritage park to tell the story of mining in the district – which dates back to the 1870s – and a park with major outdoor artworks on display.

"We have a community there which has relied on mining for a certain period, so there's a nice little hotel and school and all those sorts of things," Mr Cadzow said.

"To try and maintain that, one of the ways we wanted to have a life after mining was to have some sort of a tourist attraction.

"People will pay to see where a large mine was, and if you have the added attraction of a heritage and art park, then that's blending the centuries-old mining with the modern remnants of mining and some art features as well.

"It becomes a destination. The rail trail isn't far away and if we could develop a tourism link with the rail trail that could be quite attractive."

Oceana knows the gold will run out one day, so it not only has to consider what it leaves behind in Otago, but where it mines in the future. The Philippines copper project was one such example of diversification, but Mr Cadzow believed there was still considerable life left in Oceana's current New Zealand mines.

Just last week, Oceana announced its test drilling programme at Frasers showed a likely extension of 18 months for the life of the mine work done as part of its $12 million exploration budget. Further drilling is expected to increase Oceana's reserves still further.

"It's a very large system at Macraes," Mr Cadzow said. "The line of strike is 25km long, at least, and we have tenements over that. Currently, we have concentrated most of our mining within a 10km zone around our current processing plant.

"Our life of mine plan is still expanding ... and we're still exploring. You will come to a point where you run out of ore, all mines close eventually but Broken Hill (in Australia) has been going for more than 100 years now, and this is a world-class ore body.

"We've produced almost 3 million ounces of gold from Macraes and it's got around about a 4.5 million ounce resource at the moment, so there is significant gold still to be won.

"We're doing a lot of exploration at Reefton as well."

OceanaGold is proud of its Otago heritage, but is an international business and is listed on the Toronto, New Zealand and Australian stockmarkets.

The firm's New Zealand staff are spread across mines in Reefton (200), and Macraes (450) and its Dunedin office.

The extracted ore is processed in Perth, and its corporate head office is in Melbourne. OceanaGold also owns the Didipio gold copper project in the Philippines. "Most of our strategic work is now done in-house. Where expertise is needed such as Gough Gough and Hamer, who are Caterpillar experts, then that's contracted out," Mr Cadzow said.

"We have a very small head office in Melbourne: there's only 12 or 13 people there. We've got the Philippines project, and then there is the 500-odd employees here in New Zealand and 200-odd contractors.

"In the Dunedin office it is mostly technical services and the financial team. There are probably around 25 people here.

"It's good for the local economy ... We're looking to build a long-life mine. We've been operating out of Macraes for 20 years now and we want to build on that.

"We're looking at a life of the mine at Macraes of at least 80 years, and that's seen very positively in the marketplace. With the build in our share price, then you can look at doing other things."

- © Fairfax NZ News