MINE OF THE MONTH – GLOBE-PROGRESS

Reefton Redevelopment of the Globe and Progress

reborn
mines signals new life for the historic
Reefton goldfield in New Zealand

W
HEN Macraes Gold Old photographs showing views
Mining Co purchased of the original Globe and Progress
the Reefton goldfield mines – the location (left) and the
on the west coast of ropeway (below)
New Zealand’s South
Island about two decades ago, a priority
was given to establishing a surface mine
over the old Globe and Progress under- BY ROSS
ground workings. LOUTHEAN
But while the target remained
constant, the corporate deckchairs changed twice.
However, even more challenging were the fluctuat-
ing gold price and the relationship between the US OceanaGold Ltd, listed on both the Australian and
dollar and both the Australian and New Zealand New Zealand bourses.
currencies. The start-stop-start scenario for Globe-Progress
Globe-Progress, as the project became known, has been a frustration for the small community of
went through several feasibility studies which Reefton, the inhabitants and descendents made
showed that the operation was marginal in the early up largely of the miners who saw the Globe mine
years. This was due to the then relatively low ore close in the 1920s and the field shut down in 1951
reserves and the fact that the ore is refractory. when the Blackwater mine at nearby Waiuta was
In the interim, Macraes Gold was absorbed into a mothballed.
merger with two associated West Australian-based The original Globe and Progress operations were
companies, becoming part of GRD NL. In 2004 it key underground mines in the late 1880s and early
was separated again as a distinct Kiwi operator – 1890s. These mines had adit entries and their own
following a A$100 million (US$1 = A$1.35) float called township (one of the influential structures was around 10 km. This is in contact along its eastern side
named the Chemist Shop Fault). by granites of Devonian and Cretaceous ages. In the
south, the belt passes under Quaternary cover and to
Sams Creek
eek exploration REEFTON FIELD the north is cut off by granites.
From 1870 to 1951, the Reefton field produced a A study by GNS Science (essentially New Zealand’s
Globe-Progress total of 67 t of gold from 84 mines; Blackwater was Geological Survey and its volcanology unit) con-
development the largest (23 t), followed by the Globe and Progress cluded that the lodes at Reefton consist of a series
operations (1879-1920), with 13 t. of lensoide quartz shoots within one or more shear
Blackwater exploration The quartz gold lodes of the Reefton field are zones. Ore shoots can be 0.6-3.2 m wide and have a
REEFTON within a NNE trending belt of Greenland Group limited horizontal extent
GOLDFIELD meta-sedimentary rocks that extend (usually less than 150 m)
34 km, with a width of Continued on page 12

MACRAES
GOLDFIELD
Macraes surface
face mine
Frasers underground
development

March 2006 Mining Magazine 11

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 TAGLINE
MINE OF THE MONTH – GLOBE-PROGRESS

Continued from page 11 cutbacks for precious metals in Australasia), it was Progress should be the first mine to be developed in
but they persist down-plunge to considerable depth. gained not because Macraes made the best offer but reopening the Reefton field.
When Macraes Gold secured the Reefton goldfield because it already had a local mine. However, in the process of its corporate changes,
from Rio Tinto Ltd (which was going through one of Doing the deal for Macraes Gold in the mid-1980s the company twice had to go through resource-
its cyclical exploration was then chief executive, consent to mine under the country’s Resource Man-
Miles Kennedy (now agement Act (RMA). Unfortunately, the gold price
The Globe-Progress executive chairman of weakened shortly after the first consent was granted
catchment area. Inset: West Australian dia- about eight years ago, and the Kiwi dollar strength-
a schematic showing the mond miner Kimberley ened against its US and Australian counterparts.
various pits that make Diamond Co), who The situation improved six years ago when the
up the overall project recognised that Globe- gold price started rising, and New Zealand opera-
tors were able to benefit from GRD’s experience of
successfully installing a pressure-oxidation plant
(dubbed POX) at Macraes. This dramatically improved
recovery from the complex low-grade refractory ore,
and the decision was made to reactivate the Globe-
Progress development.
The new plan was finally sanctioned (after detailed
new studies and public hearings) in the late 1990s
but the Conservation minister, Sandra Lee, vetoed
the project. This caused an outcry, and 1,000 angry
pro-mining west-coast demonstrators crossed Cook
Strait to march on the capital, Wellington. The Helen
Clark Government quickly compromised, and GRD
was allowed to proceed with a slightly restricted min-
ing plan (and Sandra Lee quit politics).
There was a further setback in the project when
the tandem development of reopening the Prohibi-
tion shaft at the Blackwater mine fell into disarray
in 2004 when serious technical problems emerged.

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 This left OceanaGold with Globe-Progress as the sole
first-phase development.
There have, however, been several positive devel-
opments during the past year. Production rates have
been cut so that Globe-Progress concentrate can be
‘campaign’-treated at the company’s POX plant, re-
ducing capital expenditure significantly. Continuing
exploration at depth (and directed towards the old
Crushington mining camp to the north) then yielded
a major improvement in reserves. This broadened the
scope for a second-stage open cut to access some
flat-lying reserves.
Twelve new drill-holes into Globe-Progress have
shown that mineralisation improves on the western
side of the planned pit, and at depth, and helped ele-
vate the contained gold by 28% to 604,000 oz (7.2 Mt
at 2.6 g/t). The company quotes a total resource of
16.5 Mt at 2.7 g/t, for 1.4 Moz of contained gold, and
OceanaGold sees “ample blue sky” to go beyond the
current, less-well defined, 10.7 Mt at 2.2 g/t. Drilling
at the end of last year indicated a major target below
the planned pit and a major extension of the system
at depth. This might result in widening of the pit
or driving down a decline to the new target, which
lies far below the old workings, with potential for
significantly higher-grade ore.

OPERATION BLUEPRINT
The stage-one development is based on a conven-
tional open pit that will recover near-surface refract-
ory ore and some high-grade ore left between the
historic workings. The development will then extend
down below the old workings.
Mark Cadzow, OceanaGold’s development man-
ager, told the NZ Minerals Conference in Auckland
in late 2005 that the known mineralisation will give
a mine life of eight years. Mill construction will start 2006. This concentrate will be trucked from the mine
shortly for a treatment rate of 1 Mt/y to yield 65,000 t to the railhead near the company’s administration
of concentrates, grading 31-34 g/t, by the end of centre, and then by train over the Southern Alps and
down to Palmerston for trucking about Examining
40 km to the Macraes operation. rock cores
Stephen Orr, OceanaGold’s chief ex- from
ecutive, said in the company’s financial Globe-
report for the September quarter of Progress
2005 that approvals have been gained
from the government for exploration
north and south of Globe-Progress,
and for a 1,000 m diamond-drilling
programme that will be undertaken
on the Inkerman-Supreme blocks,
south of Souvenir, to extend the known used to cover the development costs for Globe-
resource. Progress, and also for an underground mine into the
GNS Science is undertaking work higher-grade ore extension of the Frasers open-cut
with OceanaGold’s team in the Black- mine at Macraes.
water area and, according to chief op- An expansion of the mill at Frasers, to handle the
erating officer Albert Brantley, further underground ore, will see total Macraes field product-
drilling will take place at Crushington ion rise to 225,000 oz by 2008. There will be at least
to the north and at Auld Creek, north four open-pit mines developed with an overall pre-
of Oriental. strip ratio of 8:1.
Globe-Progress is set to be com- While the stop-start scenario for Reefton has
missioned late this year, and the total been an issue of frustration for both developers and
pre-production cost, including overbur- the New Zealand west-coast community, the issue
den removal, for Globe-Progress is exercising some investors is whether the major share-
estimated at A$41 million. At the holder, GRD (whose equity has built up to 56.5%), will
end of last year, OceanaGold raised sell its controlling block in OceanaGold to focus on its
A$45 million from a convertible note. engineering division, and its growing waste, energy
Location map of the Globe-Progress project Mr Orr said that these funds will be and management division.

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