Adaption of mine designs during the past year was the theme
for the major companies opening the annual Australian
Institute of Mining & Metallurgy (AusIMM) New Zealand
branch conference in Hamilton yesterday.
To a backdrop of crashed commodity prices, increasing costs
and the high New Zealand dollar, Oceana Gold, Solid Energy
and Newmont Waihi Gold all presented their respective
adaptions, to meet the most challenging times for the sector
in recent years.
Consultant Tony Haworth of capital raisers and merger and
acquisition specialists Campbell MacPherson voiced a sobering
view of the year just passed.
''Is there any good news from the global markets?'' he asked
the 290 conference delegates.
Gold had plunged from $NZ2000 in 2012 to around $NZ1500,
coking coal was down 40% to $US130 and ironsands were down
about the same as coal to below $NZ100 per tonne.
While commodity prices had descended off the pricing graph,
Mr Haworth believed the prices at least bottomed out during
2013, with even the Chinese coal-mining sector feeling pain
at $US130 per tonne.
Of major concern was the global capital-raising for the
resources sector having grown only slightly, to $US272
billion, but worryingly, the global exploration purse was
down 30%, to around $US14 billion.
While exploration permit spending was up 16% to $42 million,
prospect permitting was down 67%, to a ''meagre'' $3.7
While the country was well ranked - 32nd of 112 jurisdictions
by the Fraser Institute as an exploration target - it was
otherwise seen as weak in mineral potential.
Oceana Gold chief operating officer Michael Holmes was
relatively upbeat, given wide-ranging mine design changes at
Reefton on the West Coast, and Macraes in East Otago, which
has included the loss of more than 250 staff and contracting
jobs during the past year.
''There is still a lot of gold in the ground [estimated]
around 8 million ounces,'' he said.
The mine life of Reefton, Macraes open pit and its Frasers
underground are all drawing to an end, the last to finish by
However, Mr Holmes said decisions were expected this year on
the West Coast Blackwater project, Round Hill at Macraes, and
the northern edge Coronation pit at Macraes had been brought
forward and was entering its early start-up stages.
He emphasised there was no timeline for decisions on
Blackwater or Round Hill, other than potentially moving to
feasibility studies during the year.
Round Hill would require resiting of the processing unit,
costing about $3 million.
Over the next two years, six million tonnes of stockpiled ore
would be used at Macraes, with less being taken from the
While production costs remain high in New Zealand, Oceana's
expanding Didipio gold and copper mine in the Philippines
last quarter provided 90% of the entire group's profit
margin; the copper by-product off-setting gold processing
''New Zealand has been tough, and continued to be tough . . .
the majority of costs are in New Zealand,'' he said.
• Reporter Simon Hartley was hosted to the conference