NZ firm strikes gold prospect deal

A gold exploration deal with Australian mining company Aurora Minerals has bought a large but unfamiliar New Zealand firm into the spotlight.

Emerald Mining is paying $2 million to Aurora as part of a joint-venture deal exploring for gold under the grassy paddocks of its Northland dairy farm.

It has the right to provide another $2 million a year for each of the next four years.

Emerald Mining will have earned a 50 per cent interest in the venture after putting in $10 million.

Chief executive Kevin Whitley said Emerald, owned by Moscow-based shareholders, owned 14 other companies, with an annual turnover of $100 million.

It operated in construction and development, importing and manufacturing for the electrical industry, tourism and forestry.

Its Russian owners had experience mining back in Europe but the Aurora deal came because the Hazelbrook prospect was on its land.

The company, which did not actively seek out media attention, had been built up over the past four years from $6 million of foreign investment.

The group owns a 550ha dairy farm in the Hazelbrook area through its Emerald Farming investment.

This farmland, north of Kerikeri, includes all of the area of what Aurora is calling its "Backyard Prospect". Aurora is also looking for gold further east near Kawakawa.

Any drilling or mining on the site is still covered by provisions of the Resource Management Act.

Aurora, which listed on the New Zealand Stock Exchange last year, is searching in Northland for an "epithermal system" - where gold created by volcanic activity is present. A similar system is in the Coromandel, site of the Martha mine.

It believes geological factors would have made Northland more difficult to explore by early prospectors and that it is better suited to modern exploration methods.

Aurora listed on the Australian Stock Exchange in June 2004, raising A$4 million for minerals exploration.

With a market capitalisation of $6.1 million and its head office in Perth, Aurora Minerals also has four exploration projects in West Australia's Murchison Goldfields.

Chairman Phillip Jackson and executive director Garry O'Hara said yesterday consultation with local Maori groups had begun and the joint venture hoped to have consents for drilling in key areas towards the end of this year.

Surface prospecting and "rock-chip sampling" was continuing at the site and Aurora says more results from its testing should be released in the coming months.

Terms of its deal with Emerald Mining (which should not be confused with Emerald Capital, or the locally owned Emerald Group investment company of Diane Foreman) include an option for the joint venture to buy or take a licence over the land for a price based on fair market value and a minerals production royalty.