Otago is in the midst of a modern-day gold rush.
About 150 years after Hartley and Reilly's discovery of gold
in Central Otago, the industry that created the region is
going strong, although largely out of the public eye. These
days you would be hard-pressed to find signs of current
gold-mining unless you took a drive down the back roads.
Beyond Omakau, towards Drybread and the Dunstan Mountains,
about half an hour from Alexandra and in view of historical
mining sites, there is a hive of alluvial (loose) mining
One mining operation is in full swing; another, less than a
minute's drive away, is to begin this week, and a third,
almost between the two, is expected to begin later this year.
The claims are on private farmland but are run by Glass Earth
Gold, primarily a hard-rock exploration company which has
turned to alluvial mining. It estimates it will earn $6
million from its Central Otago mines in the coming year.
In addition to the Omakau plots, the company has a claim near
Moa Creek which it has been working for about two years, and
another site in the Maniototo where it hopes to begin mining
later this year.
L&M mining, meanwhile, has a large claim at Earnscleugh,
Cold Gold Clutha is beginning dredging operations on the
Clutha River just below the Roxburgh Dam and Oceana Gold runs
an open pit and underground mine at Macraes.
Oceana Gold's operations, the largest in the country, dwarf
those of Glass Earth, L&M and the Clutha dredge.
The modern-day gold rush is pouring tens of millions of
dollars into the Otago economy through exploration, jobs and
Glass Earth Gold chief executive Simon Henderson said the
company contributed about $20 million (including its
exploration work) to the local economy each year through
wages for 30 employees, and other costs such as fuel and
repairs and maintenance.
L&M Mining now operates 24 hours a day and employs 32
people, and mine manager Mike Coleman said recently that
number was expected to peak at 40.
The company has estimated it spends more than $10 million a
Cold Gold Clutha's dredging is small by comparison, employing
only eight. It is still to crank up operations as it works
through teething problems.
There are also other small claims being worked in Central
Otago, including Golden Bush Mining which is in the "early
days" of an alluvial gold-mine operation on 29.5ha of land at
Schoolhouse Flat in the Nevis Valley. Director Ray Stewart
said the operation was just "getting up and running".
Central Otago Mayor Tony Lepper said the growth in the
gold-mining industry was fantastic.
"It's great for our district and it's great to see locals
being employed. You've only got to go to the Clyde pub
[Dunstan Hotel] and see the mining workers there in their
overalls to know that they're spending a bit, which is
Dunstan Hotel publican Tom Blaikie said having the custom of
the mine workers was "good value".
"Every extra customer you get helps. We certainly see them
around, especially in summer."
Otago Chamber of Commerce chief executive John Christie said
gold-mining was a "significant contributor" to the Otago
"By the time you add in the direct impact of the jobs and the
indirect impact of that support for the local economy, you
can see how valuable the resource is for our region," he
"I think we're going to see increasing opportunities around
mining for various different minerals, and gold is
As the Government had signalled its encouragement of further
mining opportunities, he thought an increase in mining
operations was likely.
Glass Earth Gold has spent almost $40 million in southern
exploration during the past five and a-half years, much of it
So far the company, and its former joint-venture partner, has
managed to glean several hundred thousand dollars of gold
revenue from the area, using a single gold-recovery unit near