Heritage Gold gets mining permit for Talisman mine

Heritage Gold has been granted a 25-year permit to mine for gold and silver in the area of the historic Talisman mine, near Paeroa.

The company today said the permit was the first in 18 years for gold mining in the North Island outside of Waihi, and talks were already under way with Chinese groups about a joint venture project.

Heritage executive director Peter Atkinson said the granting of the permit was a landmark day for the company and its loyal shareholders.

The conditions of the permit allowed Heritage flexibility and time to secure the necessary resource consents and an access arrangement with the Department of Conservation.

"While today is a milestone for Heritage, it is also a very important day for the industry and New Zealand," said Atkinson.

The permit signalled the prospectivity of the area to international companies, and it also provided confidence in the current minerals legislation and those who administered it.

Heritage had spent some $10 million on exploration in the northern Coromandel, then lost all its gold properties when a 1997 amendment to the Crown Minerals Act prevented further development, said Atkinson .

Heritage then shifted its focus south to the Waihi district, and built a portfolio of gold properties with the investment of a further $9.5m.

The Talisman mine previously produced a total of 1m ounces of gold and 3m ounces of silver, and had the potential to triple those figures.

The base case scenario from an earlier scoping study suggested progressive project development to sustainable production of 50,000 ounces of gold per annum over three years, with a medium term objective of up to 100,000 ounces of gold annually, and construction of a suitable treatment plant to process the ore nearby.

Using an average gold price of US$800 per ounce and a discount rate of 17 per cent, the project had an indicative pre-tax net present value of $40m.

Heritage's share price was up 0.6c to 4.5c at mid-afternoon.

- NZPA