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OceanaGold Corp, which is in the process of buying the Waihi Gold Mine, sees more life in the Macraes Goldfield in Otago as cheaper fuel and a weaker New Zealand dollar make the operation more attractive.
The Melbourne-based company discovered a new zone of gold mineralisation which could increase the potential reserves of the Macraes mine after embarking on a drilling programme in the first quarter of the year, it said in a statement. OceanaGold has been investigating ways to extend the mine’s life by three to five years after signalling plans to wind down the operation by the end of 2017.
“Changes to macro-economic conditions such as lower fuel costs and a weaker New Zealand dollar have resulted in significant benefits to our New Zealand operations,” chief executive Mick Wilkes said. “I am pleased to report that initial drilling has produced significant results that demonstrate the potential for increased reserves at the Macraes operations.”
In April, OceanaGold entered into an agreement with Newmont Mining Corp to buy its Waihi gold mine for US$101 million, increasing its exposure to New Zealand’s resources sector. Excluding Waihi, it expects between 195,000 and 215,000 ounces of gold produced at its New Zealand operations, compared to 201,207 ounces in 2014.
Wilkes said the company will keep looking for new deposits at the Macraes site.
The triple-listed shares last traded at $3.63 on the NZX, and have gained 65 percent this year.
(BusinessDesk)