Waihi gold find 'no instant bonanza'

A freshly explored gold deposit near Waihi is being described as significant although a miner says it will be no "instant bonanza".

Like others in the Hauraki goldfield, the ore body has the potential to contain billions of dollars worth of gold.

An exploration joint venture partner and miner, Newmont Waihi Gold, says while encouraging, the results of a drilling programme are just "business as usual".

External affairs manager Kelvyn Eglinton said only three holes had been drilled in the permit area 10km northeast from Waihi, and there had not been complete data analysis.

Joint venture partner Glass Earth announced the findings to the stock exchange yesterday.

The explorer was reluctant to quantify the size of the discovery but given the dimensions of the ore body and the gold content proven by two drill holes, it could be up to half the size of Waihi's Martha Hill, a world-scale mine. Around eight million ounces of gold has been mined from Martha Hill, first developed in the late 1870s.

Glass Earth chief executive Simon Henderson said its proximity to Waihi would reduce transport costs if it was decided to mine.

A decision would be made following further exploration over the next 12 months.

"It's a bloody good start and both Newmont and ourselves are very excited that the first two holes have drilled into a significant system," Henderson said.

ASX-listed Glass Earth holds 35 per cent of the permit and Newmont 65 per cent.

"It's way too early to put an economic value on it. That's for us to spend another $2 million to $3 million to try to prove," said Henderson.

About $1 million had been spent on diamond drilling which had struck the ore body at depths of between 150m and 300m.

Core samples showed gold content in places was concentrated at 61.4 grams per tonne of ore. Newmont made the decision to extend its open pit at Martha Hill on gold content of six to seven grams per tonne.

Henderson said the exploration permit area was on Department of Conservation land, which he said was regrowth bush and its topography meant it was suited to underground mining.

He said it was not on Schedule Four land, where mining is banned, although that policy is under review by the Government.

It would cost tens of millions of dollars to build a new mine, highly unlikely to be an open cast project because of strong opposition.

"Gold mining today isn't about instant bonanzas. It's about extensive investigation, data collection and analysis. It might not be exciting, but that's the business," Eglinton said.

Glass Earth shares closed down 1c at 33c.