11 Sep 2020

OceanaGold's Macraes Mine extended for seven years

3:01 pm on 11 September 2020

Australian owned gold miner OceanaGold has extended the life of its Macraes Mine in Otago by at least seven years, as it expects new underground and open cast mining to produce substantially more gold.

Oceana Gold's open pit mine at Macraes.

OceanaGold's open pit mine at Macraes. Photo: SUPPLIED

The company has extended the mine's life at least until 2028, and increased the estimate of reserves.

"Macraes continues to be the mine that keeps on giving," OceanaGold chief executive Michael Holmes said.

He said the mine's commercial life and output is being extended by further underground mining and opening up of more open cast operations.

Holmes said the mine's proven and probable gold reserves had been increased by 240,000 ounces, and it expected to produce about 1.1 million ounces at an average cost of $US1,025 an ounce. It has produced more than 5-million ounces during its lifetime.

World gold prices have surged during the pandemic as investors have sought the metal as a safe haven during the economic downturn and market volatility, hitting a record high of $US2,072 in August.

"The updated Macraes Technical Report ... together with the progress at Waihi, makes for an economically robust New Zealand business that we expect will generate significant free cash flows while still retaining considerable exploration potential," he said.

Macraes also operates a gold mine in Waihi, which has been at the centre of a battle with conservationists, and exposed divisions within the government.

The High Court this week cleared the sale of 178 hectares of land to be used by the company as a waste dump, after an initial rejection by Land Information Minister Eugenie Sage was overturned by Labour ministers Grant Robertson and David Parkers on economic benefits to the country.

Environmental group Coromandel Watchdog unsuccessfully challenged the decision in the High Court.

OceanaGold has clashed with conservationists over a permit to explore for gold in Coromandel.

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