Otago again going for gold

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 activity.

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 local spending.

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 year locally.

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 fantastic."

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 economy.

"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 said.

"I think we're going to see increasing opportunities around mining for various different minerals, and gold is particularly attractive."

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 in Otago.

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 Moa Creek.


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