Wednesday 29th May 2019
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Advent Gold has deferred plans for an initial share offer on the ASX following the government’s rejection of a land sale for a new tailings operation at OceanaGold’s Waihi mine.
The firm, which has an exploration permit near Reefton and has applied for another at Carrick in Central Otago, had been aiming to complete a listing by August.
But chief executive Adam McKay told delegates at the New Zealand Minerals Forum yesterday the listing had been deferred by at least a year while the political uncertainty created by the Waihi decision was resolved.
In notes for his presentation, McKay said the “adverse” decision to deny Overseas Investment Office approval for the land purchase meant New Zealand was no longer considered an attractive jurisdiction for exploration and mining and that would make it harder to raise capital.
Those risks would “undoubtedly” stabilise within the next 12 months as the government’s views on mining are clarified.
In the meantime, he said the company would continue its work re-analysing data across the former mine workings in its 2,423-hectare permit at Reefton, and may still be able to drill its priority targets by the end of the year.
The mining industry was shocked earlier this month when Land Information Minister and Green Party MP Eugenie Sage rejected OceanaGold’s planned purchase of 178 hectares of farmland for a future tailings operation.
While Associate Finance Minister David Clark approved the sale, Sage saw no economic benefit from extending the life of the region’s biggest employer and said it would increase emissions. Nor was she convinced the Resource Management Act would protect internationally regarded wetlands from any potential adverse impacts of mine expansion or the tailings development.
The split decision – the first since the act came into force in 2005 – meant the application was declined.
Earlier in the conference, Economic Development Minister and Attorney-General David Parker said he was unable to comment on Sage’s decision given it was likely to end up before the courts.
Advent’s McKay said the company will use the delay to accelerate its work on new low-impact mining techniques.
It is working with Australia’s CSIRO on in-situ gold recovery using chemicals to extract the metal from its host rock.
McKay said the technique is widely used recovering uranium and copper from sandstone deposits but a safe chemical solution for gold extraction has only recently been found.
The process could work well at Reefton, either as a surface-based operation using pumps, or in conjunction with conventional bulk mining.
McKay said that, at this stage, the resource at Reefton looks suitable in terms of porosity, given it’s hosted in sandstone, and there are large, disseminated gold resources between the higher-grade lodes that were mined in the area in the past.
“We’re quite excited about investigating this technology but it’s not going to happen overnight.
“There’s a lot of studies that need to be done. We’re just getting stuck into it now.”
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