'Business as usual' at Waihi gold mines

A 'gold pour' at Newmont Waihi Gold. Photo / APN

Newmont says it's "business as usual" at its Waihi gold mines in spite of falling gold prices forcing this country's other big miner to cut back production and lay off staff.

While OceanaGold's is scaling back at its Macraes site in East Otago, Newmont Waihi Gold spokesman Kit Wilson says it is continuing its exploratory work on massive underground Correnso mine and staff numbers were stable at around 385.

"We can't control the gold price. Like any prudent business we're keeping a close eye on our input costs but currently it's business as usual for us," he said.

Denver headquartered Newmont is one of the largest gold producers in the world with about 40,000 employees.

Wilson said at Waihi it had three mines operating: the Martha open pit, its underground Trio mine and had started starting the exploration and development drive of the controversial Corennso project under houses in the east of the Coromandel town.

Permission for the project was granted in October last year and the 5m by 5m exploratory tunnel was started just before Christmas.

It was not known how long it would be before mining could start.

"The exploration drive runs parallel to the ore body as we know it and we're putting a series of small drill cuddies off it to allow us to fully investigate the size and shape of the ore body," said Wilson.

"As we've learned from previous experience the ore bodies here tend to be quite variable."

The new mine has upset some residents concerned about blasting work under their homes and strict conditions have been imposed.

As part of permission for production blasting, the company must offer to buy the affected property at market value or, if the owner prefers, make an ex gratia payment equal to 5 per cent of its value.

If a property owner elects to sell at market value they will also get an "inconvenience payment" and help with legal and moving costs.

Gold hit record highs of around US$1900 an ounce in August 2011 but is now trading around $1225 an ounce. While the high New Zealand dollar generally hurts the returns from exported gold, miners do get some relief for imported fuel and materials used for building mines such as steel.

Wilson said Newmont was more concerned about the three year average gold price when planning new developments.

"When you're planning a gold mine which is going to to take 10 years to get up and running it's the rolling average that's more important than the gold price on any given day. But I think it's fair to say like every gold mining company in the world we are looking very closely at the gold price."