A prospector's vision

Heritage Gold is confident it will find a large enough resource from its Waihi permits and mine asset to start gold mining in the near future. ALAN TITCHALL spends a day with the prospector as it explores it tenements.

Trent Lash, the managing director of Heritage Gold, has one hand on the steering wheel and the other pointing to quartz vein high up over the Ohinimuri River in the Kanagahake Gorge.

“That’s the outcroppings of the Maria lode, one of the main ore bodies from our Talisman mine that extends under the river and transcends a few kilometres north, and northeast, where we are carrying out drilling, ” he says.

“The whole Karangahake Mountain is one big gold mine, from the top to the bottom,” he enthuses, steering the car back on course around a tight corner.

The gorge is now a peaceful setting of DOC walking tracks, cafes, and a vintage railway. A far cry from the days when 200 stamping machines along the edge of the river thumped away, processing ore so rich at times that the stamps were pounding pure gold like playdough.

We are on our way to Waihi to catch up with the Heritage Gold team surveying the prospector’s tenements running north of Newmont’s Martha open pit, before heading back to the gorge to take a first hand look at the Talisman mine system burrowing through Mt Karangahake.

The survey team were holed up in a house rented from Newmont Waihi, a rock specimen’s throw from the edge of the Martha pit.

“We are in a very unique situation,” says Lash as we survey a map of the company’s local tenements. “We almost surround the whole of Newmont’s Waihi operation, including the country’s biggest goldmine [Martha]. Plus we sit on the Talisman, once the second largest producing gold mine in New Zealand.

Kiwi-listed Heritage Gold is an exception among mineral explorers that it owns a diverse portfolio of resource assets; gold assets in Waihi, base mineral tenements in Northland, a cobalt project in Broken Hill Australia, and uranium tenements in the Northern Territory.

Prospecting the Waihi tenements

At the time of the magazine’s visit, Heritage Gold was in the middle of geophysical and airborne geological surveys of tenements covering 8600 hectares over Waihi North, Waitete and Golden Valley, in preparation of defining drilling targets.

Lash is optimistic: “Collectively, the mines in this area make up a golden triangle where they have already extracted over eight million ounces of gold and 50 million ounces of silver.”

The best prospects areas are always going to be where you know something exists rather than green fields, says lash.

“Exploration is at the bleeding edge of the mining game. We find a piece of ground that is prospective and then convince everyone to invest in our dream.” The pay-off for investors could be 20 to 30 times their investment, he adds. At the end of 2007, Heritage Gold raised 3.7 million for further exploration through private placement (which was over subscribed) and from existing shareholders through a rights issue (in less than two weeks).

“The industry is feed by exploration companies and you easily spend a lot of money pursuing those dreams and find nothing, and if you do hit big, you are generally taken over by a larger group. So it is a food chain.”

When you are prospecting around the interests of the world’s second largest gold miner, it is understandable that relationships between Newmont Waihi and Heritage are very close.

“Newmont is taking an interest in what we are doing, and sitting back waiting for us to find something,” says Lash.

Re-opening the Talisman

Heritage Gold took over the lease of the Talisman mine in 1992 under local rumblings of ‘claim jumping’. The previous operators, Southern Gold, inadvertently let its permit expire. It happened during changes in the Minerals Act and Southern Gold may have overlooked their renewal obligation, but the move was totally legitimate, Heritage MD Trent Lash stresses.

The easy gold from the Maria and Crown lodes of the Talisman Mine was taken out by hand between 1875 and 1915, but mining continued under a number of different owners before closing in 1992. Total production was more than one million ounces of gold and three million ounces of silver. Historically, ore grades have been exceptionally high, averaging 27 grams per tonne of ore, which is almost an ounce (also known as a ‘bonanza’). The average underground mine grade is a more modest seven grams per tonne. 

“In the 1980s, owners Cyprus Gold found a bonanza in the mine with levels that were determined at almost 1100 grams per tonne,” says Lash.

An underground drilling programme in 2005 delineated a JORC resource of 205,000 ounces of gold at a grade of 6.9 grams per tonne and 800,000 ounces of silver at a grade of 27 grams per tonne. Lash says with more extensive and deeper drilling (to around 400 metres) and exploration, the resource should more than double to 500,000 ounces of gold.

“The resource is definitely there, it’s just a case of investing money into a drilling programme to delineate it. We also we believe the ore bodies extend under the Ohinimuri River and across the gorge about 3.7 kilometres north and northeast.”

The main access level (L8) was partially refurbished by Heritage in 2003 and subsequently opened up for underground drilling in 2005.

For deeper drilling, level 8 needs to be widened in part to get the sampling equipment and allow bulk ore sampling, says Lash. 

“Once that’s done – the next phase is to look at the feasibility of applying a mining permit across the resource and attracting investment to open up the mine.”

By then, Heritage Gold would have invested close of $2 million in exploring it Waihi tenements and there’s no guarantee the resource will reach mining permit levels, yet Lash’s prospecting optimism is unwavering.

“Very few exploration companies have this level of asset… you have to admit that everything is in alignment for Heritage to make some significant moves over the next 12 months.”