Digging for gold

The projected life of the country’s biggest gold-mining operation is stretching ever further into the future. HUGH DE LACY profiles the huge Macres mine.

The immediate pay-off for OceanaGold Corporation operating no fewer than six exploration drills at its Macraes tenement in east Otago is an extension of the goldmine’s life out beyond 2015.

And with exploration work continuing, funded by the A$24 million capital-raising exercise in July of last year, it’s odds-on that there’s life well beyond that in the Macraes opencast and Frasers underground mines.

In December 2009, the country’s biggest gold producer announced an increase of 495,000 ounces in its mineral reserves at Macraes, and a further 122,000oz at its Reefton mine where it has a seventh drill operating.

This was on top of the revelation the previous month of a 42 percent increase in the Macraes measured and indicated resource inventory, taking the total to 2.55 million ounces.

The immediate result was a 79 percent jump to $2.50 in the New Zealand share price for the company, which is also listed on the Australian and Toronto exchanges, as the global price of gold broke through the US$1100/oz mark and seemed to be headed inexorably upward.

Total production at Oceana’s two New Zealand goldfields in calendar 2009 was about 300,000oz, a record that lifted it into the top five gold-producing companies in Australasia.

With the three-millionth ounce being poured early this year since the mine started up in 1982, the outlook for Macraes is increasingly positive, and the round-the-clock operation is about to open up a new opencast block east of the main existing operating area.

Oceana owns a huge tract of land near the village of Macraes – and, indeed, much of the village itself, including the historic pub. The mining operation covers just six percent of the total holding of 10,800 hectares, with the rest leased out to four local farmers.

The size of the landholding reflects that of the gold-bearing ore body, which could be as great as 30 kilometres by 17 kilometres: its limits have yet to be determined. The ore is relatively low-grade with just six percent of the rock bearing gold, but the on-site autoclave (see accompanying story) ensures a high level of recovery at the rate of about 150 kilograms of gold a week. On a bad day the gold recovery rate can be as low as 0.5grams/tonne, and up to 3.5gm/t on a good one.

The gold-bearing ore is easily identifiable by eye at the pit-face – it has a silvery, graphite sheen to it - and excavators work in tandem with an ore-spotter who marks the good stuff with a spray can. It’s then trucked about six kilometres to the processing plant, while the non-ore-bearing rock is taken directly to waste dumps.

By New Zealand standards, the Macraes operation is immense, employing around 300 staff working a 12-hour split shift, six days on, three days off. There’s no staff accommodation at Macraes – the 22 local families declined the offer of a single men’s residential facility in the village – so the company runs daily bus services from Oamaru and Dunedin.

The main opencast pit is 250 metres deep, with locals joking it’s the biggest man-made hole in New Zealand after Auckland, and while Macraes itself is at an elevation of 610 metres, the Frasers underground mine dives below sea-level to a depth of 620 metres, by way of a one-kilometre main tunnel and 19 kilometres of other tunnels running off it.

Beyond a depth of 250 metres, the opencast operation ceases to be economic, and once the existing Frasers operation has been worked out a further underground mine is likely to be driven.

Up to 200,000 tonne of rock a day is loaded by four excavators, the biggest of them an Hitachi 3600B which picks up 40 tonnes per scoop while swigging 250 litres of diesel an hour. This machine cost $9m, including its nine-year service contract.

The mine operates 18 dump-trucks, the biggest being Caterpillar 789s with 190t payloads and weighing 330t all-up. The smaller trucks have 150 tonne pay-loads and all are maintained by the Gough Group at an on-site facility.

Tyres for the trucks cost $36,000 each and last about nine months. The Bridgestone 3300R51s tubeless low-pressure tyres are 3.3 metres in diameter and weigh 1.8 tonne. Goughs maintains a stockpile of $600,000 worth of them, and uses a large forklift with a special rig on the front to change them. An engine transplant costs $150,000.

The underground mine is operated by the Australian contractor Byrndcut using jumbos to reinforce and shot-crete the tunnels, and Caterpillar DT68 underground trucks loaded by bulldozers. Ore is trans-shipped to the dump-trucks at the underground entrance for transport to the processing plant.

The opencast fleet alone is valued at $127 million and running costs are monstrous. The bigger trucks have 3000-litre fuel tanks, enough to last a full 12-hour shift, and all of them carry 120 sensors to monitor electronic and mechanical performance, ensuring early detection and repair of any problems.

No fewer than 160 Toyota utilities are also used on the site, and the whole operation’s annual fuel bill runs to $36 million.

The topsoil at Macraes is only 3-6cm deep and usually opens directly onto rock. The explosives used to break it up are manufactured from ammonium nitrate on-site in 10-tonne batches by Oric, emerging from the plant as a creamy-coloured paste that is both stable and easy to use.

The Macraes area is as dry as it is high, with an annual rainfall of just 300-600mm, so the mine has the right to pump water up from the Taieri River 17 kilometres away. Some of this is distributed around the site by four dust-laying water-tankers, each with a capacity of 150,000 litres, but the main use is in de-toxifying ground-up waste from the processing plant using lime trucked in from Dunback in a process called lime-kill.

This fine waste is like pumice and it’s mixed with other waste material and dumped in an impoundment surrounded by load-bearing walls, and which looks like a dam. The water drains to one end of the impoundment from where it is pumped out, cleaned and 97 percent of it recycled.

To ensure the quality of the recycled water the company employs trout on the old canary-in-the-coalmine principle. Four years ago it acquired a trout hatchery from Wanaka and shifted it to the mine-site. Rainbow trout are produced from brood stock in an indoor hatchery before being transferred to outdoor artificial ponds to develop. Once big enough, between 8000 and 20,000 a year are released into local lakes and streams.

The role of water monitoring falls to brown trout in a lake at the base of the main waste impoundment: if toxic elements were to leach into the lake, the fish would die. Instead they thrive, and every few months the company holds a staff family fishing day to keep stocks down.

Environmental constraints within the resource consent are, of course, stringent. Not only will the impoundment eventually have to be covered in top-soil and planted out in coarse native grasses and tussock, but will have to be contoured so it looks as it did originally.

Given that this land will eventually be sold off to farmers who would much prefer it flat, clear of tussock and grassed with high-producing cultivars, this might be seen as taking the rehabilitation concept too far.

But that’s not for the company to say, and it has to abide by its resource consent which requires it to spend about $6 million a year getting the land back to something like it was before mining. Given the lengthening time frame in which the Macraes mines will operate, that means a lot of land eventually being restored.