November 28, 2024 • 21 mins
[VIDEO EPISODE ON YOUTUBE & SPOTIFY] OceanaGold wants to keep mining under conservation land on Waihi’s coastline to keep its operation going for another decade. Could controversy derail their investment?
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The information provided in this program is of a general
nature and is not intended to be personalized financial advice.
We encourage you to seek appropriate advice from a qualified
professional to suit your individual circumstances. We're taking you inside
this massive gold mine. We're a Canadian company plans to
make the most of our economy's minerals moment and expand
this operation, but could controversy consume their investment.
Speaker 2 (00:24):
Since about twenty seventeen in Earnest we've been with the
permission of the Department of Conservation establishing drill sites.
Speaker 1 (00:32):
So one million ounces that could give you how many
more years, if not decades on this operation if you're
allowed to go ahead with it.
Speaker 2 (00:39):
The mining phase is in the order of a decade
of mining.
Speaker 3 (00:53):
We're going across a bit further. This will probably start.
Speaker 4 (00:55):
Going anything to get to the value they.
Speaker 3 (00:56):
Correct yep, so that spire us to that's God left
again there getting dizzy.
Speaker 5 (01:03):
So this is Edward Denn.
Speaker 4 (01:04):
We're tur one hundred.
Speaker 1 (01:05):
And fifty meters underground the Corimandel town called Wayhi, where
the Toronto listed company Oceana Gold digs for gold and silver.
Speaker 4 (01:15):
How do you know you want to go in that direction.
How do you know this.
Speaker 6 (01:17):
Gold for gold?
Speaker 2 (01:19):
He roll's one.
Speaker 5 (01:20):
There would have been the inspiration for being done that.
Speaker 7 (01:22):
You've seen them up in the office.
Speaker 5 (01:23):
So they presult say it spelled all year. Heare we
get that.
Speaker 1 (01:27):
It started digging these tunnels in two thousand and six
and it's still going deeper. The Mining Safety lead took
us right into its operation to understand exactly what it's
doing under the earth droning.
Speaker 3 (01:40):
Day are here?
Speaker 5 (01:44):
I could Roy doc missus Madison Nadian?
Speaker 4 (01:48):
Nice to me? Day Can you tell us what you're doing?
Speaker 5 (01:52):
What I'm doing?
Speaker 4 (01:54):
What I do?
Speaker 2 (01:54):
Is it dorvia? Yeah? Yeah?
Speaker 5 (01:56):
And what you're doing just grab support development filling the
last thing is it? Who does with derision?
Speaker 1 (02:02):
Yep?
Speaker 2 (02:03):
How long have you been working here?
Speaker 5 (02:04):
For our seven years?
Speaker 1 (02:05):
That's nine for seven years, that's nine seven eas Yet
how do you find the mining industry?
Speaker 5 (02:10):
I love it? Yeah, yes, coolers, So it's the beast job.
There's a beat job of the head most society. You
mean it's a bit different, challenging, but yeahs ok. He's
great gold for a great course. But probably in New
Zealand they say it start up on scale with what's
a nauty But if I have been.
Speaker 1 (02:27):
There, like up with you.
Speaker 4 (02:29):
In terms of what you were doing before.
Speaker 1 (02:31):
This's like how much of an opportunity and what kind
of lifestyle can thissk of you that something else couldn't.
Speaker 5 (02:36):
Well Financially, it's been well. We were able to buy
a house and which in my last job was was
single income with a fair It was pretty much possible
to try to live end save. So get us something
messive for us.
Speaker 4 (02:50):
Oh awesome, are well done?
Speaker 1 (02:52):
Tissue is as we kept driving down, we made it
to the bottom of the market head.
Speaker 3 (02:57):
This is massive pit.
Speaker 6 (02:58):
Yep.
Speaker 1 (02:59):
Yeah, I feel like.
Speaker 4 (03:01):
I'm walking on the moon. So this used to be
a fully operational open mind.
Speaker 2 (03:09):
Correct, yep.
Speaker 3 (03:11):
I can't see from here, but we've got workshops and
crashes and things all around the surface up there, and
they used to come in around and down and into
the bottom of the pit here and mind that.
Speaker 1 (03:22):
But there was this landslide, right, So since that happened
or before when you saw that coming.
Speaker 3 (03:27):
Yeah, they had people they knew because of monitoring, they
knew this. They knew there was movement and things were
going to happen, and everyone was taken out of the
pit well before anything occurred, and since then we've then
mine access and through to the pit as you've just
come out of.
Speaker 4 (03:41):
So the underground mine is actually under our feet. It
keeps going.
Speaker 1 (03:44):
Yes, it might sound like a stupid question, but how
does this remain stable when people are mining underneath this?
Speaker 3 (03:51):
The ground itself is inherently stable. Okay, the rock structures
they will stay there, and you take a tunnel through it,
the rock structure will stay there. The stresses move our rock.
Doctors are probably much better to explain how that all
works now.
Speaker 4 (04:04):
When you call them the doctors.
Speaker 3 (04:06):
Yeah, yeah, the geotechnical engineers, they're they're the ones to
talk all about how that that works. Yeah, but we're
filling this up with waste. So all the waste material
we used to cart to the surface, we've got a
big stockpile up there. But it's obviously much more efficient
to bring it out here because eventually we've got to
take it back in underground and fill up the old voids.
Speaker 1 (04:24):
So all of the tunnels that you've dug out, all
of that rock you've now started to fill.
Speaker 4 (04:28):
Martha, Yep, we use stockpile and then eventually, once you're
done mining that you would use all that rock.
Speaker 1 (04:34):
Ye.
Speaker 3 (04:34):
Progressively, as we've finished an area, we'll go back and
fill that area in consent process to fill the voids.
Speaker 4 (04:40):
So what is the life of the underground mine?
Speaker 3 (04:44):
I started here in two twelve, but two thousand and
six they started mining underground here obviously the open pit
and the underground mine we're going in conjunction. And then
they've stopped mining prior to the fall, and obviously continue underground.
And yeah, I think as far as the life of
mine goes, every mine is like, well, we've got five years.
(05:05):
We've got five years. We've got five years. If you
look at many of the mines around the world, it's
they're always looking at we're going to be closing soon.
I hang on, noe, we've got another five years, another
five years. Obviously, as you go further underground, we can
do more exploration, find more gold, and potentially extend the
life of the morning.
Speaker 4 (05:23):
How long have you been working here for Craik.
Speaker 3 (05:25):
August twenty twelve. I started so, yeah, moved up from
McCraw so I was standado Shanna Gold.
Speaker 4 (05:31):
Then awesome, thank you so much for taking us around.
I really appreciate that.
Speaker 1 (05:33):
Not a problem while underground gives a sense of the stakes.
You need to go higher up to see the scale
of the entire operation. Oceana Gold's New Zealand legal executive
Alison Paul is coming up in the air with us.
Oceana purchased the Wiki mine in twenty fifteen. At that
time it only had a life.
Speaker 4 (05:54):
Of less than three years. It's extended it well beyond that.
Speaker 7 (05:57):
Now, how are you allowed to dig upet that large
on the edge a residential areas turned into a pit
thirty five years ago and.
Speaker 2 (06:07):
At that time there was a lot less town than
there is now.
Speaker 1 (06:10):
The town actually built up to the pit as opposed
to they dug into a town.
Speaker 7 (06:14):
That's right, and being a combination.
Speaker 1 (06:16):
Of boat really its growth is now extended to exploring
for gold under this and nearby forest a popular hiking.
Speaker 4 (06:23):
Area in the region.
Speaker 1 (06:25):
Land that's administered by the Department of Conservation. So this
is all dockland, all of this forest, Corimandal Forest Park
that's right, all Coramander Forest Park.
Speaker 4 (06:34):
So this is one of the drill sites here. Can
you explain the operations that you're.
Speaker 1 (06:37):
Doing on this area through sites like that currently?
Speaker 6 (06:40):
Yeah, So the area is what we've called the forest
Careponga area, and that's what we've made the ore body.
Since about twenty seventeen in Earnest we've been with the
permission of the Department of Conservation, establishing drill sites in
order to drill holes down into the ground and understand
(07:01):
more about the your body that is there, and that
is aimed at firming up your understanding of the extent
and the grade and the physical properties of your body, so.
Speaker 1 (07:12):
Effectively at the moment your pre pre feasibility. All of
this drilling is to help you create a feasibility.
Speaker 7 (07:18):
Study as correct. So once you've applied things like the
economic factors, you're able to raise it to illegal nine
as a reserve. And that can only happen when you've
reached a press feasibility stage. And that's our intention in
December when they're going to release a report to our shareholders,
which we'll be targeting exactly there, so we'll be talking
(07:39):
about a reserve for we release that reporter recepper roughly,
how confident are you that you could extract decent quality
goal from that? That's the big question that we answer
in a pre feasibility report. But as I sit here
today and I say there we go to be releassing
(08:00):
a prebeasibility rapport with a Maiden Missouri in December. That
tells you the level of confidence that we've reached it
this ever time.
Speaker 1 (08:09):
So far, it's indicated one million ounces of higher grade
gold could be under the ground, so it's proposing digging
two new tunnels to get to it, which would go
under this farmland that the company has already purchased. But
mining is not without its controversy, and the fact that
this is conservation land and home to a native frog
(08:30):
species is significant for the environmental effort against it. When
we landed back on the ground, Allison and I sat
down to discuss why it's pushing ahead with its investment
and the expected payoff.
Speaker 4 (08:45):
Allison, thank you so much for having us here. I
really appreciate it.
Speaker 2 (08:47):
It's great to have you here.
Speaker 1 (08:49):
Let's start by talking about the existing Wye operation. What
we've seen here today tell us about the scale of it.
You also have McCrae, which is the biggest gold mine
in the country.
Speaker 4 (08:58):
But how does why he here compare.
Speaker 2 (09:00):
So the company Oceana Gold started at McRae's seventy five
years ago and that does remain the biggest gold mine
in the country. It's essentially an open pit gold mine
with some underground mining here at why He. Oceanic Gold
acquired this mine off Newmont at the time in twenty fifteen,
so we've been here coming up to ten years, and
(09:23):
that whole time we've been underground mining. So there is
quite a well known open pit in the middle of
why He Martha Pit that has been not mined at
the time that we've had why He mine. So we're
mining under Martha pitt in remnants of historic mining from
(09:44):
over one hundred years ago, and that Martha underground mine
will take us through to something like twenty twenty eight
or beyond on our current estimations, but those kinds of
dates are always moving.
Speaker 1 (09:58):
So if that's the life of the mind, then what
do you things sort of total production or at least
annual production leading up to twenty twenty eight.
Speaker 4 (10:03):
Could be from the existing Wyhe operation.
Speaker 2 (10:07):
So the existing operation this year is targeting between fifty
five to seventy five thousand ounces of gold and then
a whole lot of silver. We produce more silver than
we do gold out of the y He mine, so
that compares with McCrae's for example, which typically targets between
one hundred and thirty to one hundred and fifty or
(10:29):
more thousand ounces of gold a year. So here at
y he that is the kind of production that we're
looking for, looking to increase that somewhat, but that out
twenty twenty eight at the moment is what we're aiming for.
And then we're looking to bring on at some point
this additional discovery, the Fury Care Poga all body, which
(10:51):
we've been exploring since about twenty seventeen, and we're taking
that through into the development phase.
Speaker 1 (10:56):
I'm definitely keing to talk to you about all of
that and more detail. But if we just talk about
the existing environment, the climate for minerals and the economic
potential for it. The price of gold at least is
record highs. The price of silver is certainly rising too.
How do you think about the climate and the market
for commodities like that at the moment and the opportunity
(11:16):
that provides for a company like this.
Speaker 2 (11:19):
So here in why we are employing over three hundred
and fifty people and the expiration that we're pursuing is
employing over another hundred people. So that is a great
opportunity not just for the mind but for the people
of why he and I think at the moment that
is the focus of some of what's been proposed by
(11:41):
the current government around things like the Fast Track Approvals Bill.
So the government has identified an opportunity to bring on
additional economic activity through things like the primary sector and
the resources sector, which is part of that. So that
is the opportunity for a Carepona in terms of gold production.
(12:03):
Initially a development project, and it will be for some
years before it starts producing gold. There's a lot of
tunneling that has to happen before we're able to reach
that or body, and at that point it will become
another producing mind that will add to the production that
we're seeing here at Martha Underground, or takeover or something
(12:23):
along those lines, depending on the timelines.
Speaker 1 (12:26):
At one point, I do want to talk to you
about the prospect and opportunity that that could provide in
terms of the goal that you could extract from that area.
Speaker 4 (12:35):
But what if it doesn't happen.
Speaker 1 (12:36):
There is enormous controversy around this project and you've barely
even got started. You know, you're certainly not extracting anything yet.
That could derail this investment and prospect entirely for this company.
Speaker 2 (12:49):
Nothing is guaranteed, and I think the way a business
like ours has to respond to that is to listen
and to do our work and our consultation and the
technical assessments we need to do to meet the expectations
of New Zealanders. So the for Ay Cure Ponga opportunity
is under conservation land. One of the things we've been
(13:11):
clear on from the outset is that we wouldn't be
putting any surface mining activities in the conservation estate. So
we're going to start tunneling from a pece of farmland
that is next to the conservation forest Park. We'll tunnel
underground and we will tunnel towards the old body from
there and stay underground except for some vent sites vent
(13:34):
shafts that are going to rise to the surface. So
that's the first thing we have to respond to expectations.
We're doing a lot of technical assessments to make sure
that our impacts stay underground and don't have a noticeable
impact on conservation land on the surface, so that we
think addresses some of the controversy that surrounds a project
(13:57):
like ours. And you can understand the controversy because New
Zealanders justifiably are very protective in particular of conservation at
state and I don't think any of us would have
it any other way. So this project we'll have to
meet those expectations that what's on the surface remains well
(14:18):
looked after.
Speaker 1 (14:19):
There must be some pretty high confidence that's come out
of those early studies to make you want to proceed
with something that does have controversy surrounding it.
Speaker 2 (14:26):
Yes, it's started life, as all minds do, as a
discovery and since twenty seventeen in Earnest, we've been doing
expiration drilling, so that's with the permission of the Department
of Conservation, and we've been drilling off about thirteen sites,
including camps and helly pads and the like, and then
(14:48):
we've added another site in March this year to that number.
So that has got us to the point by the
end of last year where we were able to say
to our markets we've got a fairly good confidence level
what is known as an indicated resource around about a
million ounces of gold, and then we've got about another
(15:09):
half million ounces at a kind of a less drilled out,
lower level of confidence and since that time we've been
looking to raise the amount of drilling we have of
that all body to raise that confidence level some more.
And we've also established another drill site to the south
(15:29):
where we're really looking for the extent where the extent
of the all body might be and whether it extends further.
So we've been publishing results since that time that are
showing that at the moment, we're continuing to find good
grade mineralization that we're optimistic about and that we're looking
(15:49):
at adding to our inventory.
Speaker 1 (15:51):
One million ounces is why he annually today you currently
produce what I think he said, fifty thousand or something, we.
Speaker 2 (15:57):
Do about seventy five or so years guide on.
Speaker 4 (16:00):
One million ounces.
Speaker 1 (16:01):
That could give you how many more years, if not
decades on this operation if you're allowed to go ahead
with it.
Speaker 2 (16:08):
Yeah, I think the development phase could be quite a
few years to begin with, but then after that the
mining phase is in the order of a decade of
mining at the moment, and because you are always looking
for further extent of the your body even when you're underground.
Once you've established your tunnels, you're able to do more
(16:30):
drilling from underground and what your experience often is that
a mind keeps on going. So you establish your mind
based on what you know at the time, and you
have a level of optimism, and.
Speaker 1 (16:43):
What about the quality of the gold and grams per
ton out of that one million ounces, how does that
compare to what you currently get out of Wayhei, or
perhaps compare to mccraze.
Speaker 2 (16:55):
So you need to appreciate that the grade of the
gold that you target with an underground is always necessarily
higher than the grade of the gold that you target
with an open pit. So two very different operations. At mccraze,
we're targeting less than one gram of gold per ton
of war, whereas an underground will inevitably be more than that.
(17:20):
The grade that we've got within our indicated resource at
for a caraponger is fifteen point nine grams per ton
compared to less than one, well compared to a very
different operation being an open pit. But that's a massive
defreessing mind it is. What you will find is that
the grade often goes down as you start bringing more
(17:43):
and more gold into your inventory that you're targeting. So
you don't you aim to establish a cutoff grade, which
is the point at which you decide that you're going
to leave anything further and not mine it. And the
kind of grade that you've got within a resource estimate
(18:04):
is not always going to be or necessarily going to
be reflective of what you're mine at. But certainly foreign
care upomer is very promising all body, and we have
been pursuing the development of our understanding of that to
the point that we're going to be releasing a pre
(18:27):
feasibility study in December which is going to, amongst other things,
allow us to establish a reserve, a gold reserve and
not just the resource that we've got at the moment,
so that'll be happening in December.
Speaker 1 (18:40):
Of course, the grade of gold that you would extract
from an underground mind needs to be higher because it
costs a hell of a lot more to operate an
underground mind. It's a much bigger investment and more difficult
than an open pit mind.
Speaker 4 (18:52):
Is that correct?
Speaker 2 (18:53):
That's right, And you're targeting in many cases different mineralization
that is by its nature more concentrated from the kind
of mineralization you target with an open pit, So there
are a fundamental differences. But the cutoff grade is one
of the things that is a difference between those two
methods of mining.
Speaker 1 (19:11):
So if we sum up all of those figures, then
one million ounces potentially in this Whiting North project if
it is at that grade of almost sixteen grands per
ton of gold another decade on the life of this project,
how much do you think this company could take if
it sells that gold at near the record prices that
(19:35):
gold hitting.
Speaker 2 (19:36):
Now, well, that's something that even in a pre feasibility context,
when we release the pre feasibility study, there will be
some estimates of those kinds of numbers contained in that.
At this point, it's fairly i would say conservative, or
(19:58):
people would form the it was conservative relative to current
goal price. But of course you're talking about a long
term investment. So what you base your investment on isn't
the spot price today, but more of a consensus price
coming from everyone in this particular market gold investors, and
(20:22):
you really establish a more conservative number. So the indicated
resource that we've got, all the resource that we've got
at the moment for a caraponga, is based on a
seventeen fifty US dollar gold price, And to the degree
that as a company at the moment that we talk
(20:43):
about reserves, that's based on fifteen hundred gold price, so
that's pretty conservative.
Speaker 1 (20:49):
This morning I checked it, it's over twenty three hundred
US see.
Speaker 2 (20:53):
Yeah, so it is something that you obviously keep under advisement,
and from time to time the company does make announcements
and update the market as to our thinking on those
consent numbers.
Speaker 1 (21:08):
So remind me again when the pre feasibility study is
due to come out, because you're currently in a pre
pre feasibility study.
Speaker 2 (21:15):
Process, right, Yeah, so that's going to be released on
the eleventh of December Vancouver time.
Speaker 4 (21:22):
We'll talk then.
Speaker 1 (21:23):
Thank you so much for your time, Alison really appreciate it.
Thank you.
The information provided in this program is of a general
nature and is not intended to be personalized financial advice.
We encourage you to seek appropriate advice from a qualified
professional to suit your individual circumstances. We're taking you inside
this massive gold mine. We're a Canadian company plans to
make the most of our economy's minerals moment and expand
this operation, but could controversy consume their investment.
Speaker 2 (00:24):
Since about twenty seventeen in Earnest we've been with the
permission of the Department of Conservation establishing drill sites.
Speaker 1 (00:32):
So one million ounces that could give you how many
more years, if not decades on this operation if you're
allowed to go ahead with it.
Speaker 2 (00:39):
The mining phase is in the order of a decade
of mining.
Speaker 3 (00:53):
We're going across a bit further. This will probably start.
Speaker 4 (00:55):
Going anything to get to the value they.
Speaker 3 (00:56):
Correct yep, so that spire us to that's God left
again there getting dizzy.
Speaker 5 (01:03):
So this is Edward Denn.
Speaker 4 (01:04):
We're tur one hundred.
Speaker 1 (01:05):
And fifty meters underground the Corimandel town called Wayhi, where
the Toronto listed company Oceana Gold digs for gold and silver.
Speaker 4 (01:15):
How do you know you want to go in that direction.
How do you know this.
Speaker 6 (01:17):
Gold for gold?
Speaker 2 (01:19):
He roll's one.
Speaker 5 (01:20):
There would have been the inspiration for being done that.
Speaker 7 (01:22):
You've seen them up in the office.
Speaker 5 (01:23):
So they presult say it spelled all year. Heare we
get that.
Speaker 1 (01:27):
It started digging these tunnels in two thousand and six
and it's still going deeper. The Mining Safety lead took
us right into its operation to understand exactly what it's
doing under the earth droning.
Speaker 3 (01:40):
Day are here?
Speaker 5 (01:44):
I could Roy doc missus Madison Nadian?
Speaker 4 (01:48):
Nice to me? Day Can you tell us what you're doing?
Speaker 5 (01:52):
What I'm doing?
Speaker 4 (01:54):
What I do?
Speaker 2 (01:54):
Is it dorvia? Yeah? Yeah?
Speaker 5 (01:56):
And what you're doing just grab support development filling the
last thing is it? Who does with derision?
Speaker 1 (02:02):
Yep?
Speaker 2 (02:03):
How long have you been working here?
Speaker 5 (02:04):
For our seven years?
Speaker 1 (02:05):
That's nine for seven years, that's nine seven eas Yet
how do you find the mining industry?
Speaker 5 (02:10):
I love it? Yeah, yes, coolers, So it's the beast job.
There's a beat job of the head most society. You
mean it's a bit different, challenging, but yeahs ok. He's
great gold for a great course. But probably in New
Zealand they say it start up on scale with what's
a nauty But if I have been.
Speaker 1 (02:27):
There, like up with you.
Speaker 4 (02:29):
In terms of what you were doing before.
Speaker 1 (02:31):
This's like how much of an opportunity and what kind
of lifestyle can thissk of you that something else couldn't.
Speaker 5 (02:36):
Well Financially, it's been well. We were able to buy
a house and which in my last job was was
single income with a fair It was pretty much possible
to try to live end save. So get us something
messive for us.
Speaker 4 (02:50):
Oh awesome, are well done?
Speaker 1 (02:52):
Tissue is as we kept driving down, we made it
to the bottom of the market head.
Speaker 3 (02:57):
This is massive pit.
Speaker 6 (02:58):
Yep.
Speaker 1 (02:59):
Yeah, I feel like.
Speaker 4 (03:01):
I'm walking on the moon. So this used to be
a fully operational open mind.
Speaker 2 (03:09):
Correct, yep.
Speaker 3 (03:11):
I can't see from here, but we've got workshops and
crashes and things all around the surface up there, and
they used to come in around and down and into
the bottom of the pit here and mind that.
Speaker 1 (03:22):
But there was this landslide, right, So since that happened
or before when you saw that coming.
Speaker 3 (03:27):
Yeah, they had people they knew because of monitoring, they
knew this. They knew there was movement and things were
going to happen, and everyone was taken out of the
pit well before anything occurred, and since then we've then
mine access and through to the pit as you've just
come out of.
Speaker 4 (03:41):
So the underground mine is actually under our feet. It
keeps going.
Speaker 1 (03:44):
Yes, it might sound like a stupid question, but how
does this remain stable when people are mining underneath this?
Speaker 3 (03:51):
The ground itself is inherently stable. Okay, the rock structures
they will stay there, and you take a tunnel through it,
the rock structure will stay there. The stresses move our rock.
Doctors are probably much better to explain how that all
works now.
Speaker 4 (04:04):
When you call them the doctors.
Speaker 3 (04:06):
Yeah, yeah, the geotechnical engineers, they're they're the ones to
talk all about how that that works. Yeah, but we're
filling this up with waste. So all the waste material
we used to cart to the surface, we've got a
big stockpile up there. But it's obviously much more efficient
to bring it out here because eventually we've got to
take it back in underground and fill up the old voids.
Speaker 1 (04:24):
So all of the tunnels that you've dug out, all
of that rock you've now started to fill.
Speaker 4 (04:28):
Martha, Yep, we use stockpile and then eventually, once you're
done mining that you would use all that rock.
Speaker 1 (04:34):
Ye.
Speaker 3 (04:34):
Progressively, as we've finished an area, we'll go back and
fill that area in consent process to fill the voids.
Speaker 4 (04:40):
So what is the life of the underground mine?
Speaker 3 (04:44):
I started here in two twelve, but two thousand and
six they started mining underground here obviously the open pit
and the underground mine we're going in conjunction. And then
they've stopped mining prior to the fall, and obviously continue underground.
And yeah, I think as far as the life of
mine goes, every mine is like, well, we've got five years.
(05:05):
We've got five years. We've got five years. If you
look at many of the mines around the world, it's
they're always looking at we're going to be closing soon.
I hang on, noe, we've got another five years, another
five years. Obviously, as you go further underground, we can
do more exploration, find more gold, and potentially extend the
life of the morning.
Speaker 4 (05:23):
How long have you been working here for Craik.
Speaker 3 (05:25):
August twenty twelve. I started so, yeah, moved up from
McCraw so I was standado Shanna Gold.
Speaker 4 (05:31):
Then awesome, thank you so much for taking us around.
I really appreciate that.
Speaker 1 (05:33):
Not a problem while underground gives a sense of the stakes.
You need to go higher up to see the scale
of the entire operation. Oceana Gold's New Zealand legal executive
Alison Paul is coming up in the air with us.
Oceana purchased the Wiki mine in twenty fifteen. At that
time it only had a life.
Speaker 4 (05:54):
Of less than three years. It's extended it well beyond that.
Speaker 7 (05:57):
Now, how are you allowed to dig upet that large
on the edge a residential areas turned into a pit
thirty five years ago and.
Speaker 2 (06:07):
At that time there was a lot less town than
there is now.
Speaker 1 (06:10):
The town actually built up to the pit as opposed
to they dug into a town.
Speaker 7 (06:14):
That's right, and being a combination.
Speaker 1 (06:16):
Of boat really its growth is now extended to exploring
for gold under this and nearby forest a popular hiking.
Speaker 4 (06:23):
Area in the region.
Speaker 1 (06:25):
Land that's administered by the Department of Conservation. So this
is all dockland, all of this forest, Corimandal Forest Park
that's right, all Coramander Forest Park.
Speaker 4 (06:34):
So this is one of the drill sites here. Can
you explain the operations that you're.
Speaker 1 (06:37):
Doing on this area through sites like that currently?
Speaker 6 (06:40):
Yeah, So the area is what we've called the forest
Careponga area, and that's what we've made the ore body.
Since about twenty seventeen in Earnest we've been with the
permission of the Department of Conservation, establishing drill sites in
order to drill holes down into the ground and understand
(07:01):
more about the your body that is there, and that
is aimed at firming up your understanding of the extent
and the grade and the physical properties of your body, so.
Speaker 1 (07:12):
Effectively at the moment your pre pre feasibility. All of
this drilling is to help you create a feasibility.
Speaker 7 (07:18):
Study as correct. So once you've applied things like the
economic factors, you're able to raise it to illegal nine
as a reserve. And that can only happen when you've
reached a press feasibility stage. And that's our intention in
December when they're going to release a report to our shareholders,
which we'll be targeting exactly there, so we'll be talking
(07:39):
about a reserve for we release that reporter recepper roughly,
how confident are you that you could extract decent quality
goal from that? That's the big question that we answer
in a pre feasibility report. But as I sit here
today and I say there we go to be releassing
(08:00):
a prebeasibility rapport with a Maiden Missouri in December. That
tells you the level of confidence that we've reached it
this ever time.
Speaker 1 (08:09):
So far, it's indicated one million ounces of higher grade
gold could be under the ground, so it's proposing digging
two new tunnels to get to it, which would go
under this farmland that the company has already purchased. But
mining is not without its controversy, and the fact that
this is conservation land and home to a native frog
(08:30):
species is significant for the environmental effort against it. When
we landed back on the ground, Allison and I sat
down to discuss why it's pushing ahead with its investment
and the expected payoff.
Speaker 4 (08:45):
Allison, thank you so much for having us here. I
really appreciate it.
Speaker 2 (08:47):
It's great to have you here.
Speaker 1 (08:49):
Let's start by talking about the existing Wye operation. What
we've seen here today tell us about the scale of it.
You also have McCrae, which is the biggest gold mine
in the country.
Speaker 4 (08:58):
But how does why he here compare.
Speaker 2 (09:00):
So the company Oceana Gold started at McRae's seventy five
years ago and that does remain the biggest gold mine
in the country. It's essentially an open pit gold mine
with some underground mining here at why He. Oceanic Gold
acquired this mine off Newmont at the time in twenty fifteen,
so we've been here coming up to ten years, and
(09:23):
that whole time we've been underground mining. So there is
quite a well known open pit in the middle of
why He Martha Pit that has been not mined at
the time that we've had why He mine. So we're
mining under Martha pitt in remnants of historic mining from
(09:44):
over one hundred years ago, and that Martha underground mine
will take us through to something like twenty twenty eight
or beyond on our current estimations, but those kinds of
dates are always moving.
Speaker 1 (09:58):
So if that's the life of the mind, then what
do you things sort of total production or at least
annual production leading up to twenty twenty eight.
Speaker 4 (10:03):
Could be from the existing Wyhe operation.
Speaker 2 (10:07):
So the existing operation this year is targeting between fifty
five to seventy five thousand ounces of gold and then
a whole lot of silver. We produce more silver than
we do gold out of the y He mine, so
that compares with McCrae's for example, which typically targets between
one hundred and thirty to one hundred and fifty or
(10:29):
more thousand ounces of gold a year. So here at
y he that is the kind of production that we're
looking for, looking to increase that somewhat, but that out
twenty twenty eight at the moment is what we're aiming for.
And then we're looking to bring on at some point
this additional discovery, the Fury Care Poga all body, which
(10:51):
we've been exploring since about twenty seventeen, and we're taking
that through into the development phase.
Speaker 1 (10:56):
I'm definitely keing to talk to you about all of
that and more detail. But if we just talk about
the existing environment, the climate for minerals and the economic
potential for it. The price of gold at least is
record highs. The price of silver is certainly rising too.
How do you think about the climate and the market
for commodities like that at the moment and the opportunity
(11:16):
that provides for a company like this.
Speaker 2 (11:19):
So here in why we are employing over three hundred
and fifty people and the expiration that we're pursuing is
employing over another hundred people. So that is a great
opportunity not just for the mind but for the people
of why he and I think at the moment that
is the focus of some of what's been proposed by
(11:41):
the current government around things like the Fast Track Approvals Bill.
So the government has identified an opportunity to bring on
additional economic activity through things like the primary sector and
the resources sector, which is part of that. So that
is the opportunity for a Carepona in terms of gold production.
(12:03):
Initially a development project, and it will be for some
years before it starts producing gold. There's a lot of
tunneling that has to happen before we're able to reach
that or body, and at that point it will become
another producing mind that will add to the production that
we're seeing here at Martha Underground, or takeover or something
(12:23):
along those lines, depending on the timelines.
Speaker 1 (12:26):
At one point, I do want to talk to you
about the prospect and opportunity that that could provide in
terms of the goal that you could extract from that area.
Speaker 4 (12:35):
But what if it doesn't happen.
Speaker 1 (12:36):
There is enormous controversy around this project and you've barely
even got started. You know, you're certainly not extracting anything yet.
That could derail this investment and prospect entirely for this company.
Speaker 2 (12:49):
Nothing is guaranteed, and I think the way a business
like ours has to respond to that is to listen
and to do our work and our consultation and the
technical assessments we need to do to meet the expectations
of New Zealanders. So the for Ay Cure Ponga opportunity
is under conservation land. One of the things we've been
(13:11):
clear on from the outset is that we wouldn't be
putting any surface mining activities in the conservation estate. So
we're going to start tunneling from a pece of farmland
that is next to the conservation forest Park. We'll tunnel
underground and we will tunnel towards the old body from
there and stay underground except for some vent sites vent
(13:34):
shafts that are going to rise to the surface. So
that's the first thing we have to respond to expectations.
We're doing a lot of technical assessments to make sure
that our impacts stay underground and don't have a noticeable
impact on conservation land on the surface, so that we
think addresses some of the controversy that surrounds a project
(13:57):
like ours. And you can understand the controversy because New
Zealanders justifiably are very protective in particular of conservation at
state and I don't think any of us would have
it any other way. So this project we'll have to
meet those expectations that what's on the surface remains well
(14:18):
looked after.
Speaker 1 (14:19):
There must be some pretty high confidence that's come out
of those early studies to make you want to proceed
with something that does have controversy surrounding it.
Speaker 2 (14:26):
Yes, it's started life, as all minds do, as a
discovery and since twenty seventeen in Earnest, we've been doing
expiration drilling, so that's with the permission of the Department
of Conservation, and we've been drilling off about thirteen sites,
including camps and helly pads and the like, and then
(14:48):
we've added another site in March this year to that number.
So that has got us to the point by the
end of last year where we were able to say
to our markets we've got a fairly good confidence level
what is known as an indicated resource around about a
million ounces of gold, and then we've got about another
(15:09):
half million ounces at a kind of a less drilled out,
lower level of confidence and since that time we've been
looking to raise the amount of drilling we have of
that all body to raise that confidence level some more.
And we've also established another drill site to the south
(15:29):
where we're really looking for the extent where the extent
of the all body might be and whether it extends further.
So we've been publishing results since that time that are
showing that at the moment, we're continuing to find good
grade mineralization that we're optimistic about and that we're looking
(15:49):
at adding to our inventory.
Speaker 1 (15:51):
One million ounces is why he annually today you currently
produce what I think he said, fifty thousand or something, we.
Speaker 2 (15:57):
Do about seventy five or so years guide on.
Speaker 4 (16:00):
One million ounces.
Speaker 1 (16:01):
That could give you how many more years, if not
decades on this operation if you're allowed to go ahead
with it.
Speaker 2 (16:08):
Yeah, I think the development phase could be quite a
few years to begin with, but then after that the
mining phase is in the order of a decade of
mining at the moment, and because you are always looking
for further extent of the your body even when you're underground.
Once you've established your tunnels, you're able to do more
(16:30):
drilling from underground and what your experience often is that
a mind keeps on going. So you establish your mind
based on what you know at the time, and you
have a level of optimism, and.
Speaker 1 (16:43):
What about the quality of the gold and grams per
ton out of that one million ounces, how does that
compare to what you currently get out of Wayhei, or
perhaps compare to mccraze.
Speaker 2 (16:55):
So you need to appreciate that the grade of the
gold that you target with an underground is always necessarily
higher than the grade of the gold that you target
with an open pit. So two very different operations. At mccraze,
we're targeting less than one gram of gold per ton
of war, whereas an underground will inevitably be more than that.
(17:20):
The grade that we've got within our indicated resource at
for a caraponger is fifteen point nine grams per ton
compared to less than one, well compared to a very
different operation being an open pit. But that's a massive
defreessing mind it is. What you will find is that
the grade often goes down as you start bringing more
(17:43):
and more gold into your inventory that you're targeting. So
you don't you aim to establish a cutoff grade, which
is the point at which you decide that you're going
to leave anything further and not mine it. And the
kind of grade that you've got within a resource estimate
(18:04):
is not always going to be or necessarily going to
be reflective of what you're mine at. But certainly foreign
care upomer is very promising all body, and we have
been pursuing the development of our understanding of that to
the point that we're going to be releasing a pre
(18:27):
feasibility study in December which is going to, amongst other things,
allow us to establish a reserve, a gold reserve and
not just the resource that we've got at the moment,
so that'll be happening in December.
Speaker 1 (18:40):
Of course, the grade of gold that you would extract
from an underground mind needs to be higher because it
costs a hell of a lot more to operate an
underground mind. It's a much bigger investment and more difficult
than an open pit mind.
Speaker 4 (18:52):
Is that correct?
Speaker 2 (18:53):
That's right, And you're targeting in many cases different mineralization
that is by its nature more concentrated from the kind
of mineralization you target with an open pit, So there
are a fundamental differences. But the cutoff grade is one
of the things that is a difference between those two
methods of mining.
Speaker 1 (19:11):
So if we sum up all of those figures, then
one million ounces potentially in this Whiting North project if
it is at that grade of almost sixteen grands per
ton of gold another decade on the life of this project,
how much do you think this company could take if
it sells that gold at near the record prices that
(19:35):
gold hitting.
Speaker 2 (19:36):
Now, well, that's something that even in a pre feasibility context,
when we release the pre feasibility study, there will be
some estimates of those kinds of numbers contained in that.
At this point, it's fairly i would say conservative, or
(19:58):
people would form the it was conservative relative to current
goal price. But of course you're talking about a long
term investment. So what you base your investment on isn't
the spot price today, but more of a consensus price
coming from everyone in this particular market gold investors, and
(20:22):
you really establish a more conservative number. So the indicated
resource that we've got, all the resource that we've got
at the moment for a caraponga, is based on a
seventeen fifty US dollar gold price, And to the degree
that as a company at the moment that we talk
(20:43):
about reserves, that's based on fifteen hundred gold price, so
that's pretty conservative.
Speaker 1 (20:49):
This morning I checked it, it's over twenty three hundred
US see.
Speaker 2 (20:53):
Yeah, so it is something that you obviously keep under advisement,
and from time to time the company does make announcements
and update the market as to our thinking on those
consent numbers.
Speaker 1 (21:08):
So remind me again when the pre feasibility study is
due to come out, because you're currently in a pre
pre feasibility study.
Speaker 2 (21:15):
Process, right, Yeah, so that's going to be released on
the eleventh of December Vancouver time.
Speaker 4 (21:22):
We'll talk then.
Speaker 1 (21:23):
Thank you so much for your time, Alison really appreciate it.
Thank you.
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