Oceana Gold, ORC settle bond agreement

Otago Regional Council's bond fall-out with Oceana Gold has been settled.

In July, the council indicated it might prosecute the mining company after it pulled out of a bond agreement which would have protected the region from financial and environmental risk if a disaster hit or the company pulled out of its mining operation at Macraes.

Under the terms of its resource consents, Oceana is required to have bonds in place to pay to fully rehabilitate the site and for long-term monitoring.

The council and Oceana had been negotiating the terms of a new bond agreement for about two years.

Council corporate services director Wayne Scott said an agreement was finally signed and sealed this week with a combined $9.9 million bond agreed to, covering the rehabilitation and performance monitoring of the Macraes site for its existing resource consents as well as its mine extension consents.

"We're quite satisfied."

The bonds had a five-year term, with a minimum three-year renewal rate and was held with BNP Paribas, an international European bank, he said.

"At any stage if they're less than three years then it is acknowledged we can call in the bond, so it's an incentive for them to keep up to date."

Oceana had appealed bond conditions imposed on the mine extension plans to the Environment Court.

That appeal was still "live" as far as the regional council was aware, even though the new bonds covered that work, Mr Scott said.

- rebecca.fox@odt.co.nz

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