KEY POINTS:
Heritage Gold boss Trent Lash reckons it's time for the company to start delivering on its promise.
For 21 years the explorer has lived off the generosity of shareholders - mainly wealthy individuals on both sides of the Tasman. It now has to live up to its big
promises, he says.
"Personally, I think it's time for Heritage to deliver. We've had two decades without making a dollar - we just keep going back for more money (and) living off the largess of shareholders and investors."
Lash, who joined the company last September, says he is optimistic the Australian and New Zealand listed company now has the programme in place to deliver on its potential.
Heritage's core operations remain in the Coromandel and put a twist on two fundamentals of good real estate - getting close to very wealthy neighbours and looking for opportunities in a good do-up with an extremely good pedigree.
The exploration company's north Waihi prospects sit right next door to Martha - one of the best producing gold mines in the world and the company is launching into a scoping study of the 133-year-old Talisman Mine in the Karangahake Gorge - one of the main drivers of North Island wealth in its heyday.
Lash, 57, is a qualified mining and civil engineer. Besides work in the steel and high-tech industries, he has spent about 15 years in mining, from underground coal mines in Southland as a student to working in Alberta where tar sands are cooked to produce oil.
Last week he led a small group of journalists and Heritage staff geologists 1.3km into the Talisman Mine, enthusiastically scrambling into confined old ore-strewn working areas and helpfully pointing out vertical shafts that plunge up 150m.
"I get a little passionate about Talisman because it's been the second biggest producer in the area."
Deep in the mine is a stope or working area innocuously named BM37 where much of the initial further investigation will be centred because of its promise as "30oz dirt" - that is 30oz of gold per tonne of ore in what is thought to be a relatively narrow vein.
Elsewhere in the honey-combed Karangahake range, air circulates reasonable freely but around BM37 ventilation will be required for workers as the air is stale with old timbers and oxidising minerals feeding off existing oxygen.
During its working life, Talisman has produced around 1 million ounces of gold, mainly during its first 40 years. Cyprus Gold briefly revived its fortunes in the 1980s with "bonanza" level findings in the quartz ore that is host to gold.
The Talisman mine comprises the Maria, Crown/Welcome and Mystery veins.
Heritage got exploration rights to the mine in 1992 and in 2005 established a Joint Ore Reserve Committee (Jorc) resource of 205,000oz gold at a grade of 6.9 grams per tonne and 800,000oz silver at a grade of 27 g/t .
The aim is to establish a resource of 500,000oz of gold in the mine, Lash says.
Renovating an old mine is like doing up an old house - you never know quite what is behind the walls - which creates its special challenges, he says.
The main access level (level eight of 16) was partially refurbished by Heritage in 2003 but for more extensive drilling, level eight needs to be widened in part to get the sampling equipment and allow bulk ore sampling
Heritage also believes the ore bodies extend under the Ohinemuri River and across the gorge about 3.7km north and northeast in Rahu Ridge prospect.
Gold fever is something of a double-edged sword for the company which has a fulltime staff of just six, but also a team of long-serving consultants.
The tiny explorer's aim is to get noticed by the big miners to form joint ventures or sell out interests to - if it proves up gold in areas it holds exploration permits.
"We gather geological intelligence to allow (us) to increase the value of that land holding," Lash says.
It was not so interested in mining but "unlocking potential".
In times such as now when the gold price is high, US$901 ($1180), some investors are getting ahead of themselves.
While wealthy long-term investors know the score - the long, high-risk game with potentially high returns - Lash says he spends a fair bit of time hosing down expectations and correcting misconceptions among others.
Less seasoned investors have phoned wanting to know when the gold is going to start to be sold or worried about security for what they imagine are gold nuggets lying around the Talisman mine.
"It's difficult because every investor has different expectations."
Heritage is a survivor after being dealt blows by the 1987 sharemarket crash, environmental activism in the northern Coromandel and then a ban on mining in the area in the late 1990s covering some of its most promising prospects.
One of the key challenges for any explorer is to raise sufficient capital in such an environment. Heritage has enjoyed the benefit of spinoffs from investing in other companies, such as Cadmaus, and Lash estimates during its life it has raised around $12 million from investors, including $3.6 million late last year.
He doesn't anticipate going back to the market again soon. "At the moment the market is not in good shape."
The share price has ranged between 3c and 8.5c during the past year, closing last week on 4c.
Some of the money raised last year was funding the company's other focus in Waihi, the area encircling the Martha open cast mine, which adheres to the mining maxim that "if you want to find elephants go looking in elephant country".
Martha and the nearby Favona underground mine are owned by the United States giant Newmont Gold. Martha has produced around 8 million oz of gold and 54 million oz of silver and is due to be closed in 2010-11, although a spokeswoman says there still is potential to extend this.
Massive trucks climbing out of the 220m-deep pit carry loads of around 90 tonnes, from which an average of just on 9oz of gold is extracted.
Gold has climbed by nearly 6 per cent this year, but a Newmont spokeswoman says the cost of mining and processing has gone up at a higher rate.
So far, Heritage has carried out high-resolution airborne magnetic survey and ground-based geophysical survey, including 600 auger-dug sample holes.
The company is now using rigs to drill in the northern outskirts of the town, just a few hundred metres from Martha.
Last week, the diamond-tip drill bit was making an average of around 25m a day to a target depth of 285m on farmland about to be carved into a subdivision.
Rig drilling into quartz can cost $100,000 to $150,000 a pop but Newmont's Favona find, producing around 100,000oz of gold a year, provides the incentive.
