Australian miner sees few barriers to exploiting $8b Central Otago gold find

Wednesday, 10 January 2024

Wineries in Central Otago are understood to be nervous about the prospect of open cast mining nearby.

Australian mining company Santana Minerals has told its investors a prospect near Bendigo in Central Otago may be the biggest gold discovery in New Zealand in 40 years.

The company, which is listed on the Australian stock exchange, estimated the resource which it has named Rise and Shine, contains 2.6 million ounces of gold at an average concentration of 2.5 grams per tonne.

That much gold would have a market value once mined of US$5.4 billion (NZ$8.6b).

The company has been drilling the prospect under an exploration permit with increasingly positive results since 2021.

It said the find lent itself to a “simple and uncomplicated strategy” of an open cast and then an underground mine, and the find was blessed with good infrastructure, being an hour’s drive from Queenstown with nearby hydro power and “accessible fresh water”.

It also told investors that it had a clear pathway to obtaining a mining permit, advising them that a “new pro-mining government” had been place in New Zealand since November.

Central Otago District mayor Tim Cadogan said he believed it would be inappropriate for him to comment given the regional council would oversee any resource consent.

The National Party’s coalition agreement with the ACT Party commits it to update the Crown Minerals Act “to clarify its role as promoting the use of Crown minerals”.

Santana said the gold at Rise and Shine could be recovered through gravity, in a process that involves putting crushed ore through a centrifuge, and then cyanide-leaching.

The latter is a process that allows gold in low-grade ore to be extracted by first converting it into a liquid solution.

A large number of wineries are located in the vicinity of the prospect.

Some told The Post on Tuesday that there were concerns about the development, but that they were not aware of any organised opposition.

There are a number of vineyards at Bendigo, near Cromwell.

One said that the exploration activities had already caused traffic problems in the area and that there were concerns about the environmental impacts on their businesses.

Another said the level of concern could depend on the nature of the mining and the extraction method proposed.

Central Otago mayor Tim Cadogan said it would be inappropriate for him to comment on the possible development given that Central Otago District Council was the authority that would hear any resource consent applications for the mine.

Gold in concentrations of 2.5 grams per tonne is commonly described as low quality ore.

However, the economics of extracting gold at those concentrations has improved as the price of gold has quadrupled from below US$500/ounce in the early 2000s.