PERTH (miningweekly.com) – A preliminary economic assessment of ASX- and TSX-listed OceanaGold’s Waihi district study, in New Zealand, has indicated the potential for a robust project with an extended mine life from the Martha underground, Wharekirauponga underground (WKP), Gladstone openpit, and cutback of the existing Martha openpit.

The Waihi district is expected to have an initial mine life to 2036, with total growth capital investment estimated at some $447-million over an eight-year period, for four distinct deposits.

At a gold price of $1 500/oz, the project would have an after-tax internal rate of return of 51% and a net present value of $665-million, while life-of-mine (LoM) after-tax free cash flow has been estimated at $1.1-billion.

The LoM all-in sustaining costs have been estimated at $627/oz, and the cash costs at $557/oz.

“Using our base case assumptions, the significant exploration potential recognised at Martha underground and WKP, combined with the existing infrastructure and skilled workforce, the results of the study gives us confidence to move forward in the Waihi district opportunities and as a result, we will continue advancing each forward,” said OceanaGold president and CEO Michael Holmes.

“Additionally, we see potential for further significant growth through resource additions, particularly at Martha underground and WKP deposits. Resource expansion has the potential for sustained high levels of annual gold production and mine life extensions,” he added.

Holmes said that leveraging exploration potential through aggressive drill campaigns had been the key to the success at Waihi, since the project was acquired in late 2015.

“This year, we have over 25 000 m of exploration drilling planned and under way at Martha underground, where our focus is on resource conversion. At WKP, we have an additional 5 000 m of drilling under way as we continue to drill the high-grade East Graben vein and related foot-wall and hanging wall structures. We expect to update the WKP resource in mid-2021.”

A feasibility study for the Martha underground mine is expected in the first quarter of 2021, and a prefeasibility study for WKP is due in the second half of next year.

Meanwhile, Holmes said that the study also showed significant socioeconomic benefits for the rural communities and for New Zealand, which could play a critical role in the post Covid-19 economic recovery.

“With the potential to extend the mine life out to 2036, we can invest an estimated $1.4-billion in-country while adding 300 new jobs to our existing 700-person country-wide workforce,” he said.