OceanaGold has announced the results of a preliminary economic assessment (PEA) of development of four mining projects in the Waihi district on the North Island of New Zealand. The projects include Martha Underground (MUG), Wharekirauponga Underground (WKP), Martha Open Pit Phase 5 Cutback (MOP5) and Gladstone open pit.
WKP is located 10 kilometers (km) north of Waihi.
The forecast financial and operating metrics reflect the inclusion of the four projects as they progressively contribute to production, beginning with MUG in the second quarter of 2021. The PEA assumes an initial total of 2.2 million oz of gold produced, after application of metallurgical recoveries averaging 90%, over the life of the operations to 2036.
Oceana will continue to drill the Martha and WKP underground deposits with the aim of increasing the size of both resources.
The PEA assumes underground mining at MUG and WKP and conventional open-pit mining at MOP5 and Gladstone. MUG is expected to produce 35,000 ounces (oz) to 45,000 oz of gold in 2021, with production beginning in the second quarter utilizing modified Avoca and remnant mining methods. Annual gold production is forecast to range from 35,000 oz to 45,000 oz in 2021 to approximately 300,000 oz of gold in 2028.
Total capital investment to develop the four deposits is estimated at approximately $447 million over eight years. The life of mine all-in sustaining costs are forecast at $627/oz, while life-of-mine cash costs are forecast at $557/oz, including estimated royalties.
“The critical path for success is expected to be resource consenting (permitting) of WKP and surface projects including the Martha Open Pit Phase 5 and additional tailings storage capcity,” OceanaGold President and CEO Michael Holmes said.
Oceana expects to complete a feasibility study for MUG in the first quarter of 2021 and a prefeasibility study for WKP in the second half of 2021.