Gold mining company, Oceana Gold, is a primary producer operating on Department of Conservation land behind Reefton.

The mine, which has been processing gold ore for over a year since full-scale development, started in mid 2006 and has an expected life of seven years. It is continuously working towards restoring the land in native cover. The 170-odd jobs created have fed new blood into the local community.

Oceana Gold is a publicly listed company trading on the Toronto, Australian and New Zealand stock exchanges. The majority of shareholders are in North America, Europe and Australasia.

The company also owns the Macraes goldmine in Central Otago, which started in 1990 with an expected seven year life but which is still going strong.

The mine
Oceana Gold has been mining on Department of Conservation land on the hills south of Reefton, for almost two years. The venture has an expected life of seven years, although is constantly exploring for more rock containing gold.

The Reefton site was mined from the 1880s to 1919, when gold was extracted by crushing quartz rock into a powder, mixing it with water and separating out the valuable metal. The gold being mined nowadays is generally outside the quartz zone, being found in iron sulphide minerals.

Two years ago, this was a bare but far from pristine beech forest site, being criss-crossed with exploration tracks and scarred by previous mining disturbance. As recently as 1910, the hillsides were stripped of vegetation.

The first step towards building the mine was constructing access roads; extremely challenging with a fleet of small-articulated dump trucks and small excavators initially employed. Beech forest and scrub was then cleared from the site with any saw logs sold by the Department of Conservation and processed.

Starting at the top of the hill, ore (a rock containing economically extractable traces of gold) is mined, trucked and stacked in a stockpile next to the processing plant. This stockpile usually contains enough ore to keep the mine working for two weeks. Waste rock is taken away to a waste rock dump and topsoil is continuously stockpiled, ready for later restoration work.

The mine’s crushing; grinding and flotation plant operates continuously, seven days a week. A chemical and physical process removes minerals from a slurry of ground rock, which is filtered to produce a concentrate that resembles black sand, then railed to the company’s Macraes Mine in Central Otago. Normally, up to 1500 tonnes of concentrate leaves Reefton per week.

At Macraes, the material is added to a vessel with water, agitated and ground to make a ‘flour’ then pumped into an autoclave where oxygen is added, which results in the chemical breakdown of iron sulphides, releasing gold. This process is called pressure oxidation.
With the Macraes ore processing plant worth between $40 and 50 million, it was not worth doubling up, says Gareth Thomas, Oceana Gold, operations manager.

An exploration crew constantly drills ahead of where miners are working, with geologists analysing rock for gold content. Once they have pinpointed the location of gold, a computer model is drawn up setting out the extraction zone.

One tonne of rock yields around 2.6 grams of gold. So far, the Reefton mine has yielded about 55,000 ounces of gold. Over the life of the project, about 450,000 ounces will be recovered, which is more than the total mined at the historical Globe Progress mine.

The markets
The gold bullion produced at Macraes is shipped to a refiner in Perth, Australia, for further refining to separate some silver from the gold. Oceana Gold’s bullion is typically about 94% gold and 6% silver.

The gold is then sold, disappearing on the world market with no need for marketing, says Gareth. Current values are about $NZ900/oz for gold and $NZ23/oz for silver.

The community
The Oceana Gold Mine has been a good thing for the Reefton community, providing 170 new jobs, from highly skilled to purely practical. The injection of money into the economy has been welcomed and also the new life brought to schools.

Environment
Because the mine is on public conservation land, an “access agreement” with the Department of Conservation (DoC) is required under the Crown Mineral Act. This means another set of natural resource management requirements, on top of regional and district council resource consent conditions.
Gaining resource consents for the mine took about 15 years. Main issues were;
• Water quality, particularly sediment discharge control
• Restoration to beech forest
• Containment of the traces of chemicals used to precipitate out minerals from ground up rock

Oceana Gold environmental coordinator, Simone Vellekoop, administers resource consent and access consent requirements, ensuring conditions are met.

Water quality
The surface water collected at the upstream end of the mine site is more than is required, so the excess is diverted and discharged into the creek at the bottom.

Water used in the mine is recycled and any surplus is treated before discharge to remove the dissolved minerals including arsenic, present in water draining the area around the mine. Water quality is continuously monitored to ensure that downstream water quality is maintained within compliance limits.

Dirty run-off from the mine site, containing sediment from roads and cuttings, is collected in a dam for solids to settle out, then released into the creek.

Some of the chemicals used to extract minerals from rock “are not things you’d put in a cup of tea,” says Simone, although the quantities are extremely small compared with the 1.2 million tones of rock that goes through the processing plant every year.

While water used in the plant is recycled for as long as possible, eventually some excess has to be removed. Ferric chloride is added to precipitate out heavy metals, with the very small amount of resulting precipitate pumped with the much larger main tailings flow to the tailings impoundment.

Tailings are the ground-up rock slurry from which valuable minerals containing gold have been removed. The tailings impoundment is in a gully, which long-term will be rehabilitated to a lake with a surrounding wetland.

Removing sediment from water until it reaches the quality required by resource conditions has been far more difficult than anticipated. The company acknowledges that it has sometimes been fined for failing to meet these conditions, which it regrets more for damage done to its reputation (and of course, the environment) than financial cost.

The problem’s been dealing with the combination of a high rainfall catchment and soils with a high clay content. When the site was being constructed, the company found they were dealing with far greater volumes of sediment than was predicted by earlier modeling, and silt ponds proved inadequate.

This is because the extremely small (2-10 micron) ‘colloidal’ clay particles found here do not settle out in the ponds, but stay in suspension with water so are discharged downstream.

In some situations, ‘flocculants’ can be used to attract clay particles to one another, giving them enough weight to sink then be collected in the silt ponds. However, application of flocculants could not keep up with the volume of water in a reasonable West Coast downpour, Simone explains.

Over the last six months there has been a substantial improvement in the quality of discharged water due to reduced rainfall and also a number of measures being taken to reduce soil run-off from roads and banks. This has included collecting as much clean water as possible at the top of the site and piping it directly to the bottom, rather than adding it to the volume being treated. Also, areas of exposed soil like roads and banks have been hydro-seeded with fast-growing grass and lotus mixes.

However, in an environment where massive volumes of rain can fall in a short time, Simone is realistic about the likelihood of ongoing difficulty with meeting standards for sediment load.

Staff constantly monitor water quality, from the top of the site to the bottom. As the site has a long mining history, water contains contaminants including arsenic from historic tunnel workings. For this reason, resource consent conditions are based on water quality prior to Oceana Gold establishing here.

Environmental restoration
Because the mine site is on conservation land, DoC requires that it be progressively restored to a native beech forest. About 6.5ha of the required 78ha has already been restored and it is expected that about 50% will have been planted by the time mining ends. Eventually, the area will be returned to its original native beech cover, apart from the main pit and tailings impoundment which will be flooded to become lakes.

The site is progressively cleared ahead of mining, a little at a time. This is when planning for restoration begins, with the collection of seedlings and stockpiling of topsoil. The seedlings are grown out on contract at Westbay Propagation in the Buller Gorge. After some trial and error, smaller seedlings – of about 10-20cm – have been discovered to have the best survival.

A contractor does planting, over winter when it’s not too hot and there’s reliable rain. The first site was planted in 2005 and survival has been good.

Restoration involves retaining topsoil then returning it after mining, collecting seedlings from areas to be disturbed, growing them on, then planting them in the re-spread topsoil.

When removing the thin layer of topsoil, operators have to be careful not to include the leached clay sub-soil beneath otherwise the piles can turn into a wet mess.

The biggest single restoration area is the around 50ha waste rock stack being built in the middle of the gully. A stream runs down the gully and has been piped under the stack, which when mining is over will be clothed in trees.

While it will take hundreds of years for the site to return to a pristine forest, the restoration project will give it a great head-start, says Simone.

Oceana Gold carries out predator control over 1200 hectares of beech forest adjacent to the mine, as a trade-off with the Department of Conservation for operating on its land.

Historical preservation
A town of 300 people – Cornishtown also known as Cousin Jack Town – once stood on the processing plant site. While no standing structures remain, items like bottles and bricks are constantly dug up then labeled and stored. At the end of the project, they will be handed on to DoC, which required that any artifacts found should be preserved.

An historic explosives magazine was moved intact from its original position, and now sits alongside the company office.

Tourism
A commercial tour operator runs tours of the Oceana Gold site, paying DoC for a concession permit but with no charge made from the mining company. The value is in positive exposure, says Gareth.

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