New Zealand gold discoveries worth billions of dollars
Saturday, 27 January 2024
Gold was first discovered in New Zealand in 1852, attracting people from all over the world hoping to strike it lucky. Now, 170 years later, we’re on the precipice of a new gold rush. JOANNE NAISH reports.
Prospectors drilling deep under New Zealand’s forests, high country, national parks and private land have struck billions of dollars worth of gold, prompting a new generation gold rush.
With the price of gold more than $3300 an ounce and a supportive new Government, it has never been a better time to get the precious metal out of the ground.
New Zealand’s new resources minister is NZ First’s Shane Jones, who was minister in charge of providing a $15 million provincial growth fund loan in 2019 to Federation Mining, an Australian-listed mining company hoping to revive and extract 700,000 ounces of gold from the historic Blackwater gold mine near Reefton on the West Coast.
“No-one should underestimate the appetite our Government has for seeing an increase of economic activity in mining,” Jones says.
It’s a far cry from former Prime Minister Jacinda Ardern’s declaration of “no new mines on Conservation land” in her speech from the throne in 2017. Although never enforced, her words caused uncertainty and outrage in the mining industry.
In 2021, New Zealand produced about $472.8m worth of gold and in 2022 produced $610.3m, an increase of almost a third.
Mining with ‘almost zero impact’
Lincoln Smith started his mining life as a high school student in a holiday job at Denniston on the West Coast in the early 1990s. He now leads Terra Firma, a mining company that holds two exploration permits and has applied for a mining permit for an underground coal mine on the Coast.
“We have got a lot of projects on the go at the moment. Most of them are at fairly early stages but we believe they all have a lot of potential.”
The company holds an exploration permit for Mt Baldy in the Maruia area, which has a long history of small scale mining, mainly in the 1960s and 1990s.
“There is potentially an extremely high grade resource there, but very little is known about it. So, trying to quantify what’s there is what we’re doing at the moment,” Smith says.
“One of the challenges with Mt Baldy is that it’s relatively remote and lies in the Department of Conservation (DOC) estate. We delayed doing much work up there under the last Government because it didn’t look like a sensible investment.”
He says miners should be allowed to continue mining at historical or existing mine sites, and ultimately leave these sites in a better state than they found them.
“Right now I’m standing at the Talisman mine in the Hauraki district on the DOC estate. It’s a mine that’s been running on and off since the 1890s and I’m surrounded by native bush. I am on a hard stand that is the size of possibly two tennis courts. The surface footprint and the impact on the park is virtually zero.
“Opencast mining in the DOC estate would get people excited, but underground mining can have almost zero impact on the surface. I think there should be a path where that can happen.”
Terra Firma is the mine operator for New Talisman Gold Mines, a publicly listed company in both Australia and New Zealand that holds the mining permit for about 139,100 ounces of gold, worth about $459m at this week’s gold price ($3309 an ounce).
“It’s a small scale underground gold and silver mine with very high grade ore bodies. There are half a dozen people underground now working at getting the mine into production,” Smith says.
Terra Firma also holds an exploration permit at Pebbly Hills, a silica and gold deposit in Southland. It intends to mine silica, one of the key ingredients for the production of silicon, the key element in photovoltaic solar panels. Terra Firma hopes to couple this with reopening the mothballed Spring Creek Underground Coal Mine, near Greymouth.
Smith says the company has been “hitting a brick wall” in its bid to reopen the mine to produce up to 200,000 tonnes of specialist coal per year. The application was made more than three years ago and is still before the Government.
“We believe it is a straightforward operation to get the mine up and running again. The coal has fantastic properties and we have had very positive feedback from international customers.”
Smith says the mine would employ over 60 staff and target the market for manufacturing solar panels and for use in steel making.
The change in Government gives him confidence that mining will once again be encouraged and supported, he says.
He believes the mining industry operates responsibly and cares about the environment, and is motivated to do its part to protect the environment.
“At Talisman Mine in the Coromandel, even though production has yet to commence, we’ve got an environmental programme under way, including wilding pine eradication and pest trapping.
“The mining industry is … full of interesting and hard-working people. It’s one of those industries where you can still start at the bottom and work your way to the top.“
$9 billion gold find
Santana Minerals chief executive Damian Spring says the company made a nationally significant find while exploring the Bendigo goldfield in Central Otago.
Recent drilling of the 272km² site confirmed four deposits of 2.9 million ounces of gold - worth a staggering $9.5 billion.
“It was a huge discovery. It’s pretty early days but we will be moving to do a feasibility and a business plan in support of ultimately lodging a resource consent application by the end of the year.”
Spring says while Santana is an Australian Stock Exchange-listed company, 40% of its shareholders are New Zealand residents.
The Bendigo area is privately owned high country farmland, with sheep and beef cattle. Three of the deposits are at the surface, so the mine will be open pit, but the fourth will involve some underground mining.
Spring says all gold mining creates tailings, which consist of both slurry and waste rock. What mines do with the tailings is confirmed through the resource consent process.
Slurry is created by a chemical leaching process that uses small quantities of cyanide to extract fine gold from the ore. It may contain toxic minerals like arsenic so is put into on-site storage facilities built for long-term stability. They are capped with waste rock and covered with soil and vegetation to match the surrounding area.
“We will work out what environmental impacts we will have and how we manage those impacts during production. We will rehabilitate the land as we go so that there will be very little to do at the point we hand the land back. That’s the ultimate goal of mining: to return the land to the best you can,” Spring says.
Mana whenua has been supportive of the exploration, and will be consulted again before the resource consent applications are made, he says.
Reefton’s new mining boom
Federation Mining now employs 60 people, but that is expected to increase to more than 100 as the company moves into production at the Snowy River Gold Mine, formerly known as the Blackwater Mine, near Reefton.
It has paid off the $15m Government loan that kick-started the project and announced it will buy the mine from Oceana Gold, pending conditions.
It has drilled two new 3.3km tunnels from private land into the historic workings and has resource consent for a processing plant.
It has yet to announce it’s going into production to extract the gold, worth $2.2b, expected to happen after a pre-feasibility study is completed by April.
Managing director Mark Le Messurier says the company is pursuing a wide variety of additional funding, including private equity, debt and streaming, along with merger and acquisition.
Multibillion-dollar projects
Minerals West Coast manager Patrick Phelps says the gold industry is working on multibillion-dollar projects that are many years in the making.
“I do think we are possibly on the precipice of quite a substantial amount of mining,” he says, noting some of the exploration projects happening across the country are expected to “actually turn into mining projects” in the coming five years or so.
Mining companies are now proceeding with plans and attracting investment with more certainty and confidence, he says.
“One of the largest areas of uncertainty that’s been removed has been the prospect of the no new mines on conservation land - that’s gone now.”
Stop digging
Coromandel Watchdog chairperson Catherine Delahunty says her forebears travelled to New Zealand from Ireland to seek their fortune in the 19th century gold rush. She had spent her life as an activist trying to make up for their mistakes.
“It’s now 2024 and we have to start to think about the consequences on our planet, our biodiversity and our water and stop digging up land.”
She has been fighting to protect rare native archey’s frogs in the Coromandel where OceanaGold hopes to develop an underground mine, and dig a 6.8km tunnel, under public conservation land at Wharekirauponga, north of Waihī. OceanaGold declined to comment for this story.
The frogs are the world’s most evolutionarily distinct and globally endangered amphibian species, according to DOC.
Delahunty says they have no ears and are susceptible to vibrations from underground blasting.
‘Goodbye Freddie’
However, Resources Minister Shane Jones says New Zealand is “sitting literally on a gold mine” and if a mining opportunity is impeded by a blind frog, then it’s ”goodbye, Freddie”.
Jones says he wants to provide a stronger sense of legitimacy for the mining industry.
“The election result was very clear. The parties in Government are going to give oil and gas an opportunity to flourish again and more importantly a shot in the arm for mining.”