Gold » Industry News
Price set to remain depressed Hugh de Lacy Try as you like to talk up the price of gold, but every new indication of the global financial recovery is trending it downwards in the medium term, and that’s having a direct impact on the activities of New Zealand’s two biggest goldminers. Certainly the price has spiked briefly over the last couple of months, topping $NZ1800 an ounce at the end of August as a result of the United States Federal Reserve delaying the winding down of its $US65 billion a month money-printing stimulation package. But because the Fed’s call was found to have been such a close one, that relief lasted barely a week, and throughout September the precious metal plummeted back to around the $NZ1550/ oz ($US1300/oz) mark it reached after its long fall from a September 2011 peak of $NS2340 ($US1920). It bounced along in a narrow range at around that level over much of October, and was largely unaffected by the 16-day US Congress stalemate over raising the federal government’s debt ceiling. In the interim it became clear that Europe is definitely on the road to recovery at last – even the stricken Greek economy showed quarterly growth for the first time in years – and with emerging markets like India and China only chugging along, gold’s appeal as a bolt-hole in times of uncertainty is diminishing, and its reverse links to the value of the greenback are as rigid as ever. New Zealand producers Newmont Waihi and OceanaGold have found themselves in positions similar to each other, with the margins for their opencast mining now thin enough for them both to be looking at downsizing existing operations, even as they discover enticing new prospects. Newmont has admitted shaving $NZ300 million of its spending since the beginning of last year,
Gold’s appeal as a bolt-hole in times of uncertainty is diminishing. including the shedding of 200 jobs, the halving its advanced project funding to around $60m, and the cutting of its exploration expenditure by a third ($35m). At the same time it’s gained consent for its new billion-dollar Correnso underground mine directly below Waihi township, accessed through the existing Trio and Favona undergrounds, and expected to yield 600,000oz over 12 years. Newmont is also mulling a drive for the estimated two million ounces sitting invitingly below the ageless Martha Pit, which has produced eight million ounces since it was broached in 1882. Down in the South Island the 260 jobs at Oceana’s Globe-Progress open pit on the West
A full range of fire suppression systems for the following surface and underground applications:
• Mining / Resource Industries • Construction • Drilling • Forestry • Mobile Equipment
Fire Suppresion Systems P.O. Box 334081 Sunnynook, Auckland Steve Benseman Ph: 021 918 900, E-mail: sbenseman@clear.net.nz
10 Mining NZ » Spring 2013
Coast are in jeopardy as the company considers mothballing it in 2015. But Oceana is not putting away the chequebook just yet, shelling out $11m in October to buy the 80% of Pacific Rim Mining Corporation that it didn’t already own. Pacific Rim controls the disputed El Dorado project in El Salvador and has been battling the El Salvador government for eight years, earlier this year launching a $US315m claim against it for holding up development work. Meanwhile, Oceana is doing a pre-feasibility study into its Birthday Reef on the West Coast where eight deep holes have indicated a 600,000oz resource at a startling grade of 21 grams of gold per tonne of ore.
Small producers battle price slump The slump in the gold price has hit Canadian-listed New Zealand company Glass Earth Gold hard, but it has a recovery strategy in place, while fellow Hauraki junior Talisman Gold remains on track to move into production. Glass Earth has pulled out of its Central Otago placer gold cashflow generator because the margins had become too slim, and it has also pulled back from its Muir’s Reef play in the North Island to concentrate on its two advanced epithermal tenements near Waihi, Wharekirauponga (WKP) and Neavesville. With its share-price at one and a half cents, the company last month won shareholder approval to consolidate its share capital on the basis of ten old shares for one new one. Chief executive Simon Henderson told Mining NZ the company was de-risking its operations to improve confidence in its drive towards production. “WKP is the prime example [of the new strategy] in that there’s 260,000 ounces at 6gm per tonne, with the potential for higher grades. “Our focus is on high-grade potential which we believe will be economical to mine at whatever the gold price, and as a joint venture with Newmont Waihi there is infrastructure to process it,” says Henderson. “It’s not quite brownfields, but the bulk of the infrastructure is in place in terms of roads, power and a processing plant.” Neavesville has an historic JORC-defined resource whose development has languished for years because the Maori trust that owns the land has been reluctant to provide access. Meanwhile the New Talisman (formerly Heritage) Gold Mines last month raised nearly $350,000 under a share purchase plan to help -fund underground bulk sampling and evaluation of its historic Talisman mine in the Karangahake Gorge near Waihi.
Fire protection crucial for expensive mine equipment Protecting mining equipment from fire could save companies millions of dollars, says Steve Benseman from Fire Suppression Systems. “If companies have a complete burn-out of one of their key pieces of equipment, it could be out of action for up to a year which would cost them an awful lot of money.” Benseman says the lead time to replace highly specialised mining and construction equipment is currently around 50 weeks from when an order is placed to when it arrives in New Zealand. “That’s why it is imperative companies protect their existing machinery as the combination of large amounts of fuel, hydraulic oil, extremely hot surfaces and electrical components create an operating environment with an inherently high fire risk.” Benseman has 13 years experience in advising, installing and maintaining fire suppression systems at New Zealand mine sites. He says it is important companies deal with a specialist such as Fire Suppression Systems to ensure their systems meet the testing and certified standards required of the industry. “Some of our competitors dabble in fire suppression work outside their core business, but I believe we’re the only company in New Zealand to focus solely on mobile equipment fire suppression.” Fire Suppression Systems offers a full range of systems for the mining, construction, drilling, forestry and mobile equipment industries. Benseman is based in Auckland and employs three mobile technicians who operate from other parts of the country. Between them they visit clients’ often remote sites in fully set-up vehicles that enable them to provide complete equipment install, maintenance and servicing on-site.
We pride ourselves on delivering reliable, proven products that give our customers peace of mind ....”
The expert team can also provide clients with advice on preventative measures and maintenance practices they can undertake to further reduce fire risk. Benseman is the New Zealand agent for foam fire suppression system Sandvik NFP 1000. Around 18,000 Sandvik systems are now being used worldwide, he says. The system is fully compliant with the new Australian standard AS5062. A key feature is that it is completely selfcontained so even if there is no electricity or person to operate the system it will still activate in the event of an emergency. Benseman says Fire Suppression Systems recently installed fire suppression systems to 115 machines for the Downer/Solid Energy Stockton Alliance on the West Coast, its biggest single install to date. “We continue to look after every other major mine in the country. “We pride ourselves on delivering reliable, proven products that give our customers peace of mind that their equipment and staff will be protected should a fire incident occur.”