Trial gold mining at Frasers soon

Gold mining company Oceana Gold says it should start trial mining at its South Island Frasers mine within a year, following completion of an independent feasibility study.

Chief executive Steve Orr said the bankable feasibility study confirmed the Frasers underground mine was a "robust project". It also has the potential to mine a second area which would improve economic return.

The project's total cost should be $70 million, with initial costs of $55 million.

Oceana said the money would be raised through bank finance. A share issue was unlikely.

Trial mining should start in the second half of 2006. Underground mining should start in late 2007.

The study predicts 800,000 tonnes of ore each year, producing a total of 360,000 ounces of gold over the projects' 95-month projected lifespan.

Cash costs are expected to be $401 per ounce, with a payback period of just over two years.

Today gold was trading for about US$487 ($701) an ounce, nearing levels last seen in the 1980s. In 1983, gold peaked at record highs of U$S508 an ounce.

Oceana Gold, the New Zealand goldmining arm of Australian mining giant GRD, has operations at the Macraes goldfield in Otago, with mining focused on the Frasers open pit.

It also has projects at Reefton, one of New Zealand's big historic goldfields, and Sams Creek near Nelson.

* Meanwhile, Australian-listed Geopacific Resources has launched an initial public offering to raise A$4.5 million ($4.7 million) to explore further copper and gold prospects.

The offer, which opened in New Zealand on November 18, is for up to 22.5 million shares at an issue price of A0.20 cents.

Geopacific has been exploring in Fiji since 1986 and discovered the Tuvatu gold deposit, sold to Emperor Mines in 1996.

Geopacific's four main prospects are on Fiji's main island Vitu Levi. Managing director Ian Pringle said the offering was to raise money to take the prospects to the next level and start drilling.

Gold and copper prices are at record highs, which meant it was a good time to go to market with the project, he said.

So far, market feedback had been "excellent". The offer should close on December 16.

- NZPA