Goldminer to pour cash into Reefton

Photo / Grant Bradley

OceanaGold is doubling its exploration budget at its opencast mine near Reefton to assess the economics of underground mining below the existing pit.

Expanding the Globe Progress open cut pit is also an option.

Oceana announced yesterday it would boost its exploration budget for the Reefton goldfield to US$4.4 million ($6.3 million) for 2010/11, up from US$2.8 million in the previous year.

The expanded exploration programme includes drilling and technical and economic assessments by what is now an 18-member team.

Company spokesman Darren Klinck said it would be well into next year before a decision would be made.

Such an expansion would require significant capital investment, he said.

"The best place to find a deposit is next to one you've already got."

Oceana said the Reefton goldfield was one of the most prolific in New Zealand, historically having produced more than two million ounces of gold from hard rock mining and an additional eight million ounces reportedly from alluvial mining.

Oceana also intends to conduct an independent review of its Sam's Creek project, near Takaka, to examine the best way to exploit the deposit, which contains an inferred resource of 770,000 ounces of gold.