Getting critical projects online

Oceana Gold's chief development officer Mark Cadzow reflects on 24 years at Macraes gold mine....
Oceana Gold's chief development officer Mark Cadzow reflects on 24 years at Macraes gold mine. Photo by Peter McIntosh.
Oceana Gold's chief development officer Mark Cadzow has been at the forefront of the development of New Zealand's largest gold-miner, having started with Oceana 24 years ago, in 1991, and is one of its four longest-serving employees. Mr Cadzow talks to ODT senior business reporter Simon Hartley about his near quarter century at Macraes, and beyond.

For the past five years, Oceana Gold's chief development officer Mark Cadzow has been closely involved with the assessment, decision-making and development for three new company-transforming ventures.

The Philippine gold and copper mine Didipio is now built and fully operational, the acquisition of Newmont's Waihi gold and silver mine has been signed off, and his new focus is the recently acquired Haile, a development gold mine in South Carolina, in the US.

Just back in Dunedin last weekend from South Carolina, Mr Cadzow (59) is now responsible for Haile, including its construction and all future mining-related activities.

But a quarter of century ago, he was an eager metallurgist in Victoria, with four shared chemical patents under his belt and keen for a challenge, having done a few months' consulting for the then Macraes Mining Company.

''I asked my wife about how she felt spending two years in New Zealand ... that was 25 years ago,'' Mr Cadzow said in an interview this week.

From a farming background in Victoria, albeit adjacent to the famous historic Bendigo gold fields, the attraction to mining, and specifically metallurgy, came from a desire for a career combining indoor and outdoor activities.

Despite his Dunedin office being dominated by a Wallaby rugby jersey, signed by Nick Farr-Jones and John Eales, Mr Cadzow is surprisingly protective of his adopted Dunedin and Otago.

''Where else do you get the sports, entertainment and 10-minute drive home?'' he said.

However, for the next two years that drive home will be undertaken in South Carolina, with the Cadzows moving there soon, with their their two daughters having fledged and left the Dunedin nest.

A quarter century at a gold mining company produces highs and low, unsurprisingly, in a high-risk industry so closely aligned to the volatility of global gold prices.

''Macraes has always been challenging, and that's what has made it interesting,'' he said.

For Mr Cadzow, the 1999 commissioning of the Macraes pressure oxidation and autoclave facility was a highlight, acknowledging this week that without its installation, both the commercial viability of Macraes, and later Reefton, were in jeopardy.

Mr Cadzow visited seven of just nine similar plants around the world, before the Macraes design was finalised.

''[At the time] we put in extra capacity, which [later] allowed us to use Reefton [concentrate], which otherwise would not have been viable,'' Mr Cadzow said.

During the past four to five years, Mr Cadzow has undertaken due diligence on more than 20 mines, or development mines, largely within the Pacific Rim, the Americas and Southeast Asia.

''Either opportunities come in, or we've sought them out.

''We're actively in that space,'' Mr Cadzow said of keeping an eye out for future acquisitions.

Another important factor for Oceana was its early hedging of forward gold production contracts linked to contracted prices, he said.

''The hedging of gold in the first few years was a godsend that helped us survive,'' Mr Cadzow said.

On the downside, the 2007 downturn following the global financial crisis meant Oceana had to lay off ''a substantial number'' of staff in a concerted effort to make cost savings.

''That's never an easy time; but we're back stronger now.''

While also heading up project development and exploration within Oceana, which includes all construction and development activities of more than $US5million, Mr Cadzow undertakes all the due diligence on mergers and acquisition opportunities, feasibility studies and corporate governance.

This role has included the technical due diligence of Newmont's Waihi gold mine and Haile.

''We're starting to see the hard work of the past three or four years pay off,'' he said.

Mr Cadzow will be taking the Haile project, budgeted at $US333million, through the infrastructure commissioning stage and then on to commercial production.

Aside from Didipio's commissioning, he was responsible last year for $US5million of construction, including an upgrade of its plant to handle processing 3.5 million tonnes of ore a year, and mining optimisation studies, plus the $US16million construction of overhead power lines to hook into the national grid, as well as the initial $US73million development of Didipio's underground project and associated infrastructure.

''It has been a good learning curve; the discipline to investigate and leave no stone unturned, very solution-based,'' he said.

simon.hartley@odt.co.nz

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