OceanaGold’s global president & CEO explains why it’s intent on mining underneath land that’s home to an endangered species, despite controversy and a high cost to get to it.
The chief executive of a Canada-listed company that owns the Waihī gold and silver mine says it is prepared to invest $1 billion to extend it, despite high regulatory costs domestically and controversy over the conservation land it has applied to mine.
“This is our number one, as a company,our number one growth project of scale for the medium to long term,” OceanaGold CEO Gerard Bond told Markets with Madison inWaihī.
The price of gold recently reached a record of US$3000, above OceanaGold’s most bullish earnings estimate for its mine extension project.
“So this is a fabulous time for a gold mining company, a fabulous time for investors in the gold mining industry, given that high gold price.”
Martha Mine owned by OceanaGold in Waihi. Photo / Kit Wilson, OceanaGold.
His company had applied for mining consent under the Fast-track Approvals Bill and had already spent about $174m on the site, including exploratory drilling to indicate how much gold was under the earth.
Its pre-feasibility study indicated 1.21 million ounces of gold likely existed in the ore body.
“It’s a very attractive ore body, but the business of extracting it becomes less attractive the longer it takes to do so.”
However, its plans had caused discontent among environmental groups, such as Coromandel Watchdog, which protested in Waihī in January, stating the area was too precious to mine.
The land was administered by the Department of Conservation.
Anti-mining protestors in Waihī. Photo / Tom Eley
However, Bond said the company had “tremendous support” in Waihī, where the majority of its employees lived.
“I think the attitude towards resource development in this country has changed.”
Coromandel Watchdog chairwoman Catherine Delahunty told the Herald in an emailed statement that OceanaGold’s proposal was a “disgrace”.
“If they judge their support for this proposal by the people whom they employ they are judging without balance, but the Fast Track means they can now ignore us and robust critique.
“The millions of dollars and potentially billions which three multinationals have already extracted from Waihi have not resulted in a wealthy town.”
OceanaGold’s $1b proposed investment would be spread over six years. Sales of gold produced from the existing Waihī mine and its other operations including Macraes in the South Island would contribute to the cost.
OceanaGold had about $400 million cash on hand currently, Bond said.
It was set to spend $70m this year. Early earthworks would begin on farmland the company privately owned, involving portals to three tunnels.
One underground tunnel would be dug under the farmland heading back to the company’s processing plant, near the town, and the other two would head into Coromandel Forest Park, deep enough to go under the river.
Watch Gerard Bond discuss the prospect and how much his company expects to net from it, if it receives necessary permits, in today’s episode of Markets with Madison above.
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Disclaimer: The information provided in this programme is of a general nature, and is not intended to be personalised financial advice. We encourage you to seek appropriate advice from a qualified professional to suit your individual circumstances.
Madison Malone (nee Reidy) is host and executive producer of the NZ Herald’s investment show Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.
