By FIONA ROTHERHAM
Privately owned L&M Mining is seeking resource consents for two South Island alluvial gold mines it judges economically viable despite current gold prices.
It is just about to file for consents with the local councils to mine the $5 million Earnscleugh Flats project in Central Otago after holding a public meeting this week.
The project is on the west bank of the Clutha River between Clyde and Alexandra in an area first mined during the 1860s goldrush.
The public meeting was arranged by the Earnscleugh Gold Mine Action Group following concerns about the environmental impacts.
In particular, local orchardists were worried about dust affecting their export fruit.
In a draft assessment of environmental effects, the company said dust was already a year-round problem to residents and orchardists. It would time the worst dust-making operations to the best climatic conditions.
Action group spokeswoman Sue Edwards said there was much less anxiety in the community now the project had been scaled back from 30 to eight years.
Local grower Harry Roberts, whose leased orchard sits in the heart of the mining area, said the company had a good track record in New Zealand for reconstituting the land once gold had been extracted.
"We've had different mining companies come through the area and stir things up.
"In my view, the sooner they dig up the gold ... and give us back the land, the better."
Mintago Investments, a subsidiary of Australian-based Perilya Mines, did a detailed evaluation of the site between 1992 and late 1998. It concluded that the project was too small and the then gold price too low for a commercial project.
L&M Mining bought Mintago and 2000ha for $4.5 million last November.
Development manager Mark Pizey said two factors had changed since Mintago's assessment: the exchange rate had moved down in the company's favour; and the scaled-back project was now far less capital-intensive.
The spot gold price traded around $US275 ($573) an ounce this week and market analysts do not expect it to rise significantly in the next 12 months.
It is estimated between 180,000 and 200,000 ounces of gold are in the area.
L&M Mining hopes to gain resource consent for Earnscleugh from the Central Otago District Council and Otago Regional Council by Christmas and have 40 people working on the project by 2002.
The 24-hour-a-day, seven-day-a-week operation involves a "floating" plant fed by a hydraulic excavator stripping gravel.
The land will be restored continuously throughout the project. It was formerly part of the historic Earnscleugh Station.
L&M Mining's other new project is at the Waikaka Stream north-east of Gore. It hopes to gain resource consent from Environment Southland by the end of the month for another $5 million project of similar size and duration to Earnscleugh Flats.
L&M Mining was bought by its present overseas owners in 1997 from DML Resources, part of the Skellerup Group.
Since the 1980s the specialist alluvial miner has operated throughout the south island. It has two alluvial mines on the west coast between Hokitika and Greymouth, one at Glenore near Milton in south Otago, and a fourth mine in Bolivia.
Locals braced for goldrush as miners seek consents
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