Oceana Gold's mine on schedule

Tunnellers at Oceana Gold's Frasers underground mine are on schedule to be removing gold-bearing ore by September, the company says.

The $70 million project began a month ago, with the blasting of the first section beyond the opening, and the tunnel is now more than 110m long.

The main decline tunnel length is 4.2km, which will then fan out into many smaller tunnels for ore extraction. Gold-bearing ore from the main decline tunnelling is about 200m away from the present tunnel face, which has been progressing at just under 6m a day.

Oceana Gold operations manager John Kinyon said the project was only slightly behind schedule and gold-bearing ore would be available for processing at the East Otago mine by September.

The tunnellers at Frasers had struck some rough patches, where localised clay had filled in between layers of the Otago schist, but Kinyon said that was not unexpected.

"We anticipate some claw-back [of the schedule] and to be on time to deliver ore by September, as planned," he said.

Oceana Gold is a NZX-listed gold explorer and miner whose other projects include the Macraes Goldfield, the Reefton Goldfield and Sams Creek, according to data from Bloomberg.

Its shares traded in a range of 56 cents to $1.25 over the past 12 months. They closed down 1c at 92c on Friday.

Oceana wants to boost annual gold recovery from its present 180,000oz to 300,000oz within about two years, including a projected 60,000oz from Frasers underground, for each of the next eight years.

For the year to December 2006, Oceana expects to spend $15.6 million on development, with the balance of the $70 million spread out to 2009 as new equipment is purchased to work more tunnels.

Kinyon said an earlier tunnel at Frasers to access the ore there, but from a different direction, was started in mid-2004 but was discontinued in February 2005 because of unfavourable rock and water conditions.

The 450m first tunnel was under care and maintenance and could be restarted in the future, he said.

West Australian-based contractor Byrnecut has a three-year tunnelling contract and recently increased its staff to 28, the majority being experienced New Zealand tunnellers from Australia, to work the 24/7 shifts.

Numbers were further boosted by about 12 Oceana staff directly involved with the tunnelling, Kinyon said.

The tunnelling involves about 80 holes being drilled into the rock face and explosive charges laid and detonated, dislodging about 3m of rock from the 6m high by 5.2m wide tunnel.

Once loose rock has been removed, the walls are layered with about 50mm of fibre-reinforced shot-crete and holes for a series of 2.4m rock bolts are drilled then grouted in place.

Oceana Gold

* NZX-listed gold explorer.

* Headquarters in Australia.

* Shares have traded between 56 cents and $1.25 over the past year.

* They closed down 1c at 92c on Friday.

- OTAGO DAILY TIMES