OceanaGold shares lift on Reefton mine

Photo / Greg Bowker.

OceanaGold shares rose as much as 20c at $3.60 after the gold miner said it has identified a number of extensions to the gold mineralisation at its Reefton gold mine.

The share price has risen from $3 on March 31. It was up 10c at $3.50 in early afternoon trading.

The Reefton goldfield was a big producer in the late 1800s and early 1900s and OceanaGold has been operating an open pit mine there since 2007.

OceanaGold said today that most of the historic mining in Reefton was from high grade underground operations. These deposits were traditionally narrow-veined structures that were discovered at surface and mined down.

OceanaGold's exploration programme was trying to identify extensions within the current open pits as well as near mine satellite pits.

"Using modern technology and advancements in geologic understanding we aim to identify other large deposits not exposed at surface and much like those historically mined in the region," the company said.

An exploration programme begun in the second half of last year had identified a number of extensions to the gold mineralisation at the General Gordon and Souvenir deposits, which were likely to result in increased reserves and pit expansions. Follow up drilling at these identified areas was already under way.

Mineralised extensions were also intersected at the Empress One deposit with further work planned to examine potential underground mining opportunities.

The company has increased the size of its exploration team and now employs 13 geologists and field assistants. Following an intensive mapping and geochemical sampling programme, six additional highly prospective targets near the current mine had been identified. A drilling programme focused on these targets had commenced.

"These encouraging results from Reefton, combined with the more than 120,000 ounces of reserves that were added in December 2009, are a very good start to this brownfields exploration programme," chief executive Paul Bibby said.

"With the majority of the new mineralised extensions being open at depth, combined with the ongoing brownfields drilling and focused near-mine potential, we are very excited about what the future may hold for the Reefton gold mine."

OceanaGold is New Zealand's largest gold mining company and also operates the Macraes goldfield in Otago. It produces between 270,000 and 300,000 ounces of gold annually.

- NZPA