OceanaGold extends mine life, boosts reserves at Macraes

Frasers pit of Macraes mine. Credit: Wikipedia

OceanaGold (TSX, ASX: OGC) is extending the mine life at its Macraes operation on the South Island of New Zealand by at least seven years, the miner announced Thursday.

The Macraes operation — comprising a series of open-pit mines, an underground mine and an adjacent process plant — has produced over five million ounces of gold since 1990 and is currently the nation’s largest active gold mine. Last year, it produced 172,475 ounces of gold.

“Macraes continues to be the mine that keeps on giving. After nearly 30 years of operation, we are very pleased to announce that the Macraes life of mine will extend to at least 2028 with the inclusion of Golden Point Underground along with new open-pit opportunities such as those at Deepdell,” OceanaGold president and CEO Michael Holmes said in a media release.

Last year, Macraes produced 172,475 ounces of gold and reached the five million ounce milestone

The mine life of the Frasers Underground has also been extended to 2022 and will be replaced by the Golden Point Underground, which is expected to begin production next year. Frasers Underground commenced production in 2008 with an initial mine life of six years.

“Over the past 12 years, the company has maintained a short mine life at Frasers Underground, drilling ahead of the mine face and successfully replenishing reserves year-on-year,” Holmes added.

“Our expectation is to operate the Golden Point Underground in a similar manner while targeting year-on-year mine life extensions.”

The miner also provided an initial mineral reserves and resources estimate for Golden Point Underground, showing proven and probable reserves of 160,000 gold ounces, measured and indicated resources of 260,000 gold ounces, and inferred resources of 80,000 gold ounces.

This would boost total mineral reserves at Macraes by a total of 240,000 gold ounces, net of mine depletion. An updated Macraes technical report demonstrates an after-tax NPV of approximately $325 million based
on the higher reserves.

In addition to Macraes, the company also operates the Waihi gold mine on the North Island of New Zealand, which includes the Martha Underground  project that is currently under development and is expected to extend the life of Waihi mine by at least 10 years.

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