blacksheep
06-04-2004, 07:49 PM
Newmont’s Sale Of Waihi NZ: Good For Heritage Gold (HTM)?
By Minesite
It may come as a surprise to learn that New Zealand is home to things more interesting than very large rugby players, little birds without wings and that achingly delicious Cloudy Bay sauvignon blanc: gold is the stuff that outranks the other bits ‘n’ pieces for which Kiwiland has become well known – not that many outsiders, or even those in the shaky isles, understand or acknowledge the attractive geology of both the North and South Islands.
This ignorance may be changing, albeit slowly, if the doubling of the share price of Heritage Gold over the past six months is a guide. Long forgotten by most followers of the gold sector, Heritage has Australian roots but went wandering across the Tasman sometime in the 1980s. Jovial chief executive, Peter Atkinson, soon followed and now calls Auckland home. It was at his home phone after 11 o’clock one night this week that we caught up with Atkinson to ask what on earth had driven the share price of Heritage from an ultra-low A2.6c a share last June to a somewhat more respectable A7c today. “Nothing, really,” was the Joe Cool reply. “Guess we’ve just gone up with the rest of the gold market.” Surely there’s more to it than that was the next question dressed up as a statement. Well, said Atkinson, “it could have something to do with the ground we hold around Newmont’s Waihi mine”. And indeed it does. The market’s re-discovery of Heritage has everything to do with an extensive package of tenements and tenement applications which abut Waihi, a world-class gold producer which has yielded more than 6.5 million ounces under a variety of owners over many years. Being close to a big mine is one thing, known in Australia as the “science of near-ology”. At Waihi it is a different matter because Newmont is selling the mine, largely because the openpit ore is almost worked out and an underground development will not supply sufficient ore to the mill. Atkinson reckons the underground will only satisfy about 30% of the mill’s appetite – which means that the new owner of Waihi will be looking for feedstock, and that means looking across the boundary and talking to Heritage. The question then becomes one of whether Heritage has much to talk about, and the answer seems to be in the affirmative. Included in the acreage held by Heritage are some of New Zealand’s historically important mines, including the Talisman and Karangahake. Up until it was mothballed in 1993 Karangahake produced one million ounces of gold and three million ounces of silver. Numbers as big as these may be part of the surprise about New Zealand gold which, in its hay day, was a rival to the mines in Australia. In fact, before gold in New Zealand disappeared under an exceptionally deep green farming and environmental movement there was a fabulous industry which some of the world’s great get-rich-quick gold stories. Among the best yarns from the good old days are those recorded by J.H.M. Salmon in his History of New Zealand Gold Mining. They include the story of Dan Erihana and Hakaria Haeroa who went to the aid of their dog which had been washed away by the raging Skipper’s Creek and stranded on a remote beach. While rescuing the mutt they fossicked among rock crevices and collected 25 pounds of gold before nightfall. Each square foot of the river bed was later estimated to have contained an ounce of gold and the Otago Witness newspaper recorded that in a single day four claims at Maori Point on the Shotover recovered 127 pounds of gold (2,032 ounces worth US$835,000 in today’s money) over a single day’s digging. Those stories relate to the alluvials of the South Island. In the North, goldmining had a slightly different boom but the evidence of rich-mineralised gold-bearing systems in an epithermal environment led to the development of mines such as Waihi, Talisman and Karangahake. Atkinson has been trying to build on the historic evidence for the past decade, with limited success though he has managed a perverse first in the process. When cash was de
By Minesite
It may come as a surprise to learn that New Zealand is home to things more interesting than very large rugby players, little birds without wings and that achingly delicious Cloudy Bay sauvignon blanc: gold is the stuff that outranks the other bits ‘n’ pieces for which Kiwiland has become well known – not that many outsiders, or even those in the shaky isles, understand or acknowledge the attractive geology of both the North and South Islands.
This ignorance may be changing, albeit slowly, if the doubling of the share price of Heritage Gold over the past six months is a guide. Long forgotten by most followers of the gold sector, Heritage has Australian roots but went wandering across the Tasman sometime in the 1980s. Jovial chief executive, Peter Atkinson, soon followed and now calls Auckland home. It was at his home phone after 11 o’clock one night this week that we caught up with Atkinson to ask what on earth had driven the share price of Heritage from an ultra-low A2.6c a share last June to a somewhat more respectable A7c today. “Nothing, really,” was the Joe Cool reply. “Guess we’ve just gone up with the rest of the gold market.” Surely there’s more to it than that was the next question dressed up as a statement. Well, said Atkinson, “it could have something to do with the ground we hold around Newmont’s Waihi mine”. And indeed it does. The market’s re-discovery of Heritage has everything to do with an extensive package of tenements and tenement applications which abut Waihi, a world-class gold producer which has yielded more than 6.5 million ounces under a variety of owners over many years. Being close to a big mine is one thing, known in Australia as the “science of near-ology”. At Waihi it is a different matter because Newmont is selling the mine, largely because the openpit ore is almost worked out and an underground development will not supply sufficient ore to the mill. Atkinson reckons the underground will only satisfy about 30% of the mill’s appetite – which means that the new owner of Waihi will be looking for feedstock, and that means looking across the boundary and talking to Heritage. The question then becomes one of whether Heritage has much to talk about, and the answer seems to be in the affirmative. Included in the acreage held by Heritage are some of New Zealand’s historically important mines, including the Talisman and Karangahake. Up until it was mothballed in 1993 Karangahake produced one million ounces of gold and three million ounces of silver. Numbers as big as these may be part of the surprise about New Zealand gold which, in its hay day, was a rival to the mines in Australia. In fact, before gold in New Zealand disappeared under an exceptionally deep green farming and environmental movement there was a fabulous industry which some of the world’s great get-rich-quick gold stories. Among the best yarns from the good old days are those recorded by J.H.M. Salmon in his History of New Zealand Gold Mining. They include the story of Dan Erihana and Hakaria Haeroa who went to the aid of their dog which had been washed away by the raging Skipper’s Creek and stranded on a remote beach. While rescuing the mutt they fossicked among rock crevices and collected 25 pounds of gold before nightfall. Each square foot of the river bed was later estimated to have contained an ounce of gold and the Otago Witness newspaper recorded that in a single day four claims at Maori Point on the Shotover recovered 127 pounds of gold (2,032 ounces worth US$835,000 in today’s money) over a single day’s digging. Those stories relate to the alluvials of the South Island. In the North, goldmining had a slightly different boom but the evidence of rich-mineralised gold-bearing systems in an epithermal environment led to the development of mines such as Waihi, Talisman and Karangahake. Atkinson has been trying to build on the historic evidence for the past decade, with limited success though he has managed a perverse first in the process. When cash was de