Soaring Price of Gold Produces Boom Times for Exploration

05 October 2005 | 09:19 Code : 5967 Geoscience events
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New Zealand appears to be in the midst of a gold rush as prices hit near record highs...
New Zealand appears to be in the midst of a gold rush as prices hit near record highs.
Last week, gold inched over $US473 ($NZ684) an ounce, nearing levels last seen in the late 1980s. In 1983, gold peaked at $US508.
Coupled with a push to promote New Zealand\'s mineral resources offshore two years ago, Crown Minerals said five new gold explorers had started prospecting in New Zealand. The new players include Golden Fern, formerly CanAlaska, British HPD and Australian firms Aurora Minerals, Australasia Gold and Great Australian Resources.
Doug Gordon, New Zealand Minerals Industry Association executive director, said the rise in prospecting for coal and other minerals, including gold, had to be viewed in a global context.
That was partly because of a resurgence worldwide in demand for minerals because of huge economic growth in China and India pushing up requirements for coal, steel, copper, nickel and iron. "And with that resurgence, there is a place for gold as a storehouse of value."
Gordon said the biggest issue for mining companies was getting access, as much of it was under Department of Conservation land and there was no formal access arrangements.
Last week, a subsidiary of Newmont Mining, which operates the open-pit Martha mine at Waihi and is developing the nearby underground Favona mine, was granted an exploration permit for a new site near Te Aroha.

Earlier this month, Aurora Minerals said geologists had discovered gold in bedrock at Junction Prospect at Collingwood in Golden Bay after thick scrub was cleared. Aurora spokesman Ken Banks said the company had been attracted to New Zealand because of the Government\'s "pragmatic" approach to issuing prospecting permits.

Aurora has two other joint venture projects in the North Island and a third prospecting permit for Macraes West in Otago.
Banks said Aurora\'s commitment to New Zealand pre-dated rising gold prices was based more on New Zealand\'s proximity to the gold- rich "Pacific rim of fire".
"You could comfortably say we are spending more money than we thought we would, because the results so far have been very encouraging," Banks said.
Figures released by the Ministry of Economic Development show the number of prospecting licences granted by Crown Minerals jumped from nine in 2002, to 33 last year. Exploration permits rose from 28 to 47.
Oceana Gold, the New Zealand goldmining arm of Australian mining giant GRD, recently increased its estimates for its Frasers underground development at its East Otago Macraes site after finding better deposits than expected. It also has a mine at Reefton.
In May, Heritage Gold nearly doubled projections for its Talisman site to 205,000 ounces of gold, but said that could go higher. It hopes to resume production at the site before the end of next year.
Neptune Minerals, looking at listing on the London Stock Exchange, is looking at mining copper, zinc, lead, gold and silver worth up to $US1 billion ($NZ1.4b) from seamounts off the New Zealand coast.
There are 50 gold mining operations in New Zealand. The two largest are Newmont\'s Martha mine in the Coromandel, which produced 3.97 tonnes of gold in 2002, and the Macraes mine in Otago, which produced 5.05 tonnes.
Crown Minerals\' figures showed the amount spent on prospecting and exploration shot up 130 per cent to $20.4 million in the year to March.
Prospecting licences are for stage one, low-impact activities like soil sampling and aerial studies. Exploration permits are concentrated on a smaller area and can involve limited drilling and geochemical surveys.
The biggest boost came from those searching for gold in the Coromandel, but there was also a large increase in coal exploration as firms search for deposits to fuel growing national and international demand, Crown Minerals said.
Spending on exploration more than doubled in the year to March to $18.6m. Spending on prospecting rose from $1.1m in 2004 to $1.8m last year. The permits cover exploration for minerals and coal.
The industry employs 4000 directly, another 8000 indirectly.
Less than 0.014% of New Zealand land area is mined, the New Zealand Minerals Industry Association said on its website.

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