Mining NZ Issue 1 2015

ISSUE 1 2015

The Waikaia Way The Waikaia Gold project in Northern Southland is ticking along nicely

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Issue 1 2015

13

Contents 13 Progress at Waikaia Work on the Waikaia Gold project on the Waikaia River flood-plain in Northern Southland is progressing well.

15 Overhaul needed A report by the New Zealand Initiative says New Zealand’s resource legislation is in desperate need of an overhaul.

20 New look Wangaloa The remediation of South Otago’s Wangaloa Mine is a great example of what can be done to restore an old mine site.

15

23 No worries at Wiri Wiri Quarry is playing a pivotal role in NZTA’s massive Waterview Connection project.

20 If you have an image you think would look great on the cover, contact us: Phone 03 983 5559 Email nick@waterfordpress.co.nz

23

www.waterfordpress.co.nz Cover photo courtesy of Waikaia Gold.

PUBLISHER: James Lynch

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EDITOR: Nick Gormack

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JOURNALISTS: Jo Bailey, Hugh de Lacy, Karen Phelps, Peter Owens MARKETING CONSULTANT: Paul Crowther Ph (03) 983 5503 paul@waterfordpress.co.nz

GENERAL MANAGER: Rex Lynch Email: rex@waterfordpress.co.nz

4 Mining NZ » Issue 1 2015

ISSN 2324-1187

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News »

Chatham Rock eyes new DoC studies projects after knockback Pike River proposals

Jo Bailey The refusal of its Chatham Rise marine consent application does not mean the end for Chatham Rock Phosphate.

In a recent report to shareholders, CRP announced it has put a 12 month plan in place to evolve from its single project focus, into a more diversified company, principally involving other phosphate projects, both on and off shore.

“We’re trying to maintain momentum while we wait for a change in the rules,” says CRP chief executive Chris Castle.

“Given what’s happened it will be a hard-ask to raise another $5 million to reapply if we remain a single project company.

“We need to demonstrate to the markets we are making progress, de-risking the operation, and have retained the significant institutional knowledge and expertise that exists within our management team and partner organisations.”

Castle says this knowledge spans marine and environmental science, the development of offshore mining projects, and extensive knowledge of the phosphate market.

A recently announced rights issue is expected to raise the $1.4m needed for the company to retain the existing team and maintain its current level of activity for the next year.

Castle says CRP has already been offered nine different phosphate projects in a number of countries, which are being put through a “very detailed” preliminary screening process.

“If any of these opportunities stack up, we will then spend some money on due diligence.”

The company is also increasing its focus on its existing Namibian permit applications.

Castle says the acquisition and development of these new projects would be easier if CRP was listed on a more recognised and liquid overseas stock exchange.

After considering various options, the company has identified that the reverse takeover of a listed stock on the Toronto stock exchange is the “most logical” step forward, as Toronto is a leading exchange for mining stocks and also has a major fertiliser component.

One of CRP’s significant shareholders, Aorere Resources Limited has signed a sale and purchase agreement with Toronto Venture Stock Exchange listed Antipodes Gold (AXG) to acquire its core assets. Antipodes Gold is also dual listed on the NZAX. Included as a condition in this sale and purchase agreement is that, subject to the fulfilment of a number of prior conditions, AXG make a share based takeover offer for Chatham under

Jo Bailey

The Environmental Protection Authority has declined CRP’s original proposal to mine phosphate from the Chatham Rise, 450km off the Canterbury coast. the Takeovers Code which will, when completed, result in CRP being owned 100% by AXG, with CRP shareholders owning approximately 92.5% of the merged entity.

“This process is underway, and as long as certain conditions are met and 70 percent of CRP shareholders agree to the takeover, we expect the process to be completed sometime in August.

“The company will then be renamed and we will be able to go back to the Canadian market with a revised business plan” Castle says CRP is unlikely to abandon its Chatham Rise phosphate project and is focused on its progression. “We have had some quite productive meetings and full and frank discussions with the Environmental Protection Authority at various levels to seek clarity on the interpretation

of the EEZ legislation and the EPA’s policies for managing the consent process. We are also making submissions detailing what we think the changes to the law need to be.”

Administrative or legislation changes are critical to the progression of the project, he says.

“Within 12 months we hope a lot of our questions will be answered and we will know what we need to do to resubmit. In the meantime we are looking at how we could communicate better, as it’s obvious the decision making committee did not understand some of the evidence.”

If the legal and/or administrative landscapes do not evolve to the extent that Chatham can logically re-submit, the company will at least have other initiatives underway to keep it alive and to protect the investment made to date, he says.

“....we are looking at how we could communicate better, as it’s obvious the decision making committee did not understand some of the evidence.”

The Department of Conservation is undertaking feasibility studies on proposals made by the Pike River Families to create a tourist experience at the Pike River mine site, including a ‘Great Walk’ connecting the mine site to Punakaiki.

The study will investigate the tourism potential and design challenges of the proposal, including the cost to construct the track and hut facilities, Pike River Families spokesperson Bernie Monk says the proposed 20km, two-day Great Walk is one of two options for walking and biking tracks the group has put to the government.

“We have also proposed the development of a shorter historic mining trail, which would link up with the Croesus Track and Moonlight Track, and pass through the old Rurunui coal mine workings before ending up at the Brunner memorial.”

Monk says the families also want to see some of the “very modern” buildings at the mine site used as a visitors centre, function centre and training facility; and the mine site and surrounding areas incorporated into the Paparoa National Park.

“We’d like to keep the control room as is, and the existing lamp room focused on the 29 men.

Other plans include resurrecting a bath house somewhere down the track, and having some form of museum in the visitors centre that showcases the history of the mine and mine disaster and could also include some personal memorabilia.”

The families expect to be updated on preliminary findings of the economic viability of their proposals at a meeting in early June.

Monk says these initiatives would provide an enduring memorial to the victims of the disaster as well as an economic benefit to local communities.

In January Environment Minister Dr Nick Smith showed support for the proposal to incorporate the mine site into the Paparoa National Park, saying the initiative would ensure the site where the 29 men lost their lives was properly respected.

Meanwhile Monk says the families are still considering pursuing private prosecutions against former mine boss Peter Whittall and other individuals or organisations.

“We have employed Nicholas Davison QC who has applied to the High Court for all the archived information to be made available to us.

“Once this is released and reviewed, we will put our findings to Crown Law, which will make the final decision about whether private prosecutions can take place.”

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News »

Concerns over impact of changes Jo Bailey The progressive introduction of new competencies required for mine and quarry managers has been challenging for some in the industry says mine engineer, John Taylor.

“The changes are affecting people working in any business of an extractive nature, right down to small alluvial operations, people extracting gravel from a creek bed, or even managing a pile of gravel with a screen on a construction site.”

To meet the new requirements set out in the Health And Safety in Employment (Mining Operations and Quarrying Operations) Regulations 2013, all Certificate of Competence (CoC) holders are required to gain additional unit standards by January 1, 2016 for their certificates and existing mining qualifications to remain valid.

Taylor says there is a risk that many older, experienced mine and quarry operators in the twilight of their careers may choose to leave the industry rather than complete the unit standards required to update their lifetime Certificates of Competence.

“I know of several people in this position. It would be a great shame to lose their knowledge and expertise.”

Taylor leads training courses in incidence investigation and regulatory requirements which are taught as part of the new unit standards and says the “scramble” is on to meet the deadline.

“I normally take one course a month, but already have almost ten booked in over the next couple of months all over the country.”

Retired career miner Gary Bainbridge likes to keep a toe in the industry doing part time maintenance work at the Banbury tourist mine on the Denniston Plateau.

He is not interested in doing the unit standards required to maintain his underviewer’s ticket, so was pleased to learn that because of a “loophole”, he was able to keep his small job without doing so.

“I was able to get away with it because the mine is a tourist venture and not an operating mine,” says Bainbridge.

“However there are a lot of older miners who like me won’t renew their tickets because they’re past studying and doing papers.

“Some of us are fourth generation miners and

it’s all we’ve ever done. It would be a shame to see that collective knowledge go to waste.”

Richard Banks and his partner Margaret run a small opencast coal mine at Burkes Creek near Reefton, where his father Richard senior is mine manager.

“It’s fallen on my shoulders to do the units required to operate the mine as Dad doesn’t want to do the extra credits to maintain his lifetime tickets.”

He says the new laws “aren’t a bad thing” as they motivate people to achieve an acceptable level of competence and improve attitudes towards health and safety.

“It is definitely what the industry needs. What I struggle with is the amount of change and new regulations we’re having to deal with in such a short period of time. There are other difficulties for small businesses too, as we can’t immediately access advice from consultants and other technical people like the big companies can.”

He says the new compliance issues combined with the industry downturn saw him seriously consider shutting the mine down around 18 months ago. However a lifetime’s work in the industry proved too hard to let go of.

“We’ve accepted this is the way forward and have stepped up our commitment to tick all the boxes when it comes to compliance. It’s about taking small, regular steps and not thinking about the big picture too much.”

West Coast mining consultant Robin Hughes thinks it is a “good move” that people are required to do the additional unit standards to maintain their statutory certificates.

“I’ve held my First Class Mine Managers certificate since 1979. In those days it was issued for life which is a nonsense.

“In this industry if you don’t use it, you lose it, so I think the regulations have struck the right balance to ensure qualifications remain current.”

Hughes - the former New Zealand Chief Inspector Coal Mines from 1993-98 - says he is not concerned about having to do some extra study to gain the additional unit standards.

“It’s not particularly onerous as the papers are based around safety and risk management rather than technical mining topics.”

“Most people seem to have recognised the need for new regulations and are not against the idea of updating their certificates on a regular basis.”

Foundation stone set for Tunnellers’ Memorial Karen Phelps A foundation stone that was recently blessed in Waihi during a ceremony attended by international guests and a representative of the Queen marked the next step in the development of a special memorial area dedicated to the miners of Waihi.

The Miners’ Reflective Area in Gilmour Park is a project, which has been spearheaded by Waihi Heritage Vision. The foundation stone, from Martha Mine, forms part of a memorial dedicated to the World War One New Zealand Tunnelling Company.

According to Waihi Heritage Vision chairman Kit Wilson the foundation stone is not merely a rock – culturally and spiritually it connects the miners of the past with the miners of the present.

“We have direct descendants today in Waihi of these miners from the New Zealand Tunnelling Company and this is a way we can make sure that everyone is aware of their story,” Wilson says.

It wasn’t very long ago that nobody had even heard of the New Zealand Tunnelling Company.

It was only research by Wilson’s partner Sue Baker Wilson that uncovered the miners’ story and brought their contribution to the war effort to light.

The New Zealand Tunnelling Company miners were part of an Engineers Tunnelling Coy that the Imperial Government asked New Zealand to raise in 1915. The men formed one of 25 British and seven

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Exploration programme management Geological mapping and 3D modelling Resource evaluation and certification Mine drainage consulting, research, sampling and testing - Gas content testing of coal

6 Mining NZ » Issue 1 2015

Members of the Auckland Cook Island community with the Mayor of Arras Frédéric Leturque at the dedication of the foundation stone for the Tunnellers’ memorial in Waihi.

(Photo courtesy of Stuart Whittaker, Waihi Leader) Dominion Tunnelling Companies totalling 25,000 men that would serve in France by late 1916. The Tunnellers were a uniquely New Zealand-wide unit.

Most who enlisted were quarrymen, gold miners from Waihi or labourers from the Railways and Public Works departments.

Tunnellers dug long shafts under the enemy trench system before carving out a bigger cave at the end of the tunnel. Around 3000 pounds of explosives was then packed in the end cave before the miner beat a hasty retreat and detonated it.

Wilson says the tunnellers worked in conditions, which included being shot at, shelled, gassed from above and below as they fought in the war effort.

The development of underground shelters for attacking troops to the extent carried out at Arras,

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France, by the New Zealand Tunnelling Company is believed to be unique in military history.

Apart from Auckland, the greatest number of miners in the Tunnelling Company hailed from Waihi. As the ceremony to dedicate the foundation stone took place about 200 people watched and burst into spontaneous applause as the stone was symbolically joined with a flint rock from Arras and a Cook Islands stone gifted by the family of Solomon Isaacs, one of the three men from that nation who served with the New Zealand Pioneer Battalion attached to the Tunnelling Company.

Among those present at the ceremony was the Queen’s Representative to the Cook Islands, Tom Marsters, Auckland based Cook Island consulate General Roseline Blake, Tunnelling Company kuia

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Raina Davies, Isabelle Pilarowski of the Wellington Quarry Museum in Arras, Arras Mayor Frédéric Leturque and Hauraki District Mayor John Tregidga.

Wilson says the Miners’ Reflective Area is about telling the special story of these men, honouring their contribution, bravery and skills during the war and also moving towards peace and healing.

The foundation stone, which rests on the path that will eventually lead to a memorial, was unveiled

by Tunnelling Company descendants Desley and Tim Flack and blessed by kaumatua Tewi Nicholls and Monsignor Trevor Murray.

The Miners’ Reflective Area also contains 29 kowhai trees, which were gifted to Newmont Waihi Gold shortly after the Pike River tragedy, one to represent each of the men who lost their lives .

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News »

MWC going back to the future Solid Energy makes cuts at Stockton

Jo Bailey The upcoming Minerals West Coast Forum on July 22-23 at Shantytown will celebrate ‘150 years of Mining’ in line with other 150th anniversary celebrations taking place on the West Coast.

Peter O’Sullivan, manager of Minerals West Coast, which organises the forum in conjunction with Straterra, says delegates can look forward to a packed programme, with a range of “interesting and informative” speakers and topics lined up.

“A number of keynote speakers are already confirmed, including Kit Wilson of Newmont who will discuss the importance of mining heritage; Chief Inspector of Mines Tony Forster; Chris Baker of Straterra; and Energy and Resources Minister Simon Bridges.”

Representatives of the major mining companies on the West Coast will provide an update on their current operations and how they are shaping up for the next 12 months, which is always an interesting session, says O’Sullivan.

Regular forum topics such as regulatory reform, health and safety, people, training, economics and the environment will also be covered.

“Heritage is a common theme running through the forum, which is why we’ve asked speakers to break their presentations into three sections covering the way it was; the way it is now; and where we are going in the future”, he says.

An industry focused trade exhibition will kick off the event on the evening of Wednesday, July 22.

A free open session will also be held during the evening, with sponsored refreshments, an AustMine speed dating exercise; and the annual general meetings of Minerals West Coast and the West Coast Gold Miners’ Association.

“These sessions are very popular with smaller mining operators, exploration companies and related service providers, as it gives them a

Hugh de Lacy

This year’s Minerals West Coast Forum will celebrate ‘150 years of Mining’ in line with other 150th anniversary celebrations taking place in the region. The small Totara Mine had its last year. great opportunity to mix with some of the larger companies, meet representatives from various industry organisations, and have a look at the products and services on offer from the exhibitors.”

The forum proper gets underway on Thursday July 23.

One of the highlights of the event will be the Minerals West Coast Environmental Awards recognising the strongest overall demonstration of environmental management by a New Zealand minerals sector organisation or project.

The winners will be announced at an awards dinner at the conclusion of the forum.

“We are calling for entries for this year’s environmental awards that relate to mining heritage

and legacy mine sites in keeping with the forum theme. We are expecting some great entries as there are some amazing projects underway right throughout New Zealand either preserving mining history, or cleaning up legacy mine sites.”

It is 10 years since Minerals West Coast first gathered a small group of West Coast minerals companies together for a day to discuss the issues affecting the future of mining in this country..

The event has growth from strength to strength, with 222 delegates from New Zealand’s leading minerals sector companies and organisations attending in 2014.

“We’ve had fantastic numbers at the last two forums and hope to achieve the same this year.”

It could have been worse: Solid Energy could have closed its key open-cast export coking coalmine at Stockton, north of Westport, but instead the state-owned collier is hanging in there, albeit at the sacrifice of a quarter of its work force of 400.

The continuing fall in the global price of coking coal has forced Solid Energy to take further retrenchment steps at Stockton or face problems meeting loan repayments due in September this year. Still burdened with $300 million worth of debt, and having seen the price of coking coal fall from around $US120/tonne ($NZ160/t) when it last restructured at Stockton a year ago to barely $US80/t ($NZ105/t) today, the company in May announced it was cutting annual production from 1.4 million tonnes to 1m/t.

That will cost 113 miners their jobs, on top of the 134 redundancies that following last year’s restructuring at the mine. The measures are aimed at saving $36m in annual costs.

Chief executive Dan Clifford said that the cost-cutting of last year had worked better than expected, but it did little to counter the continued slump in the coal price, which is expected to stay at its current low levels for at least another year.

“After the efforts that have been made at Stockton to find more efficiencies [the new measures] will not be welcome, but in this market we simply have to pare back the operation to a size that minimises those losses while still allowing us to maintain relevance in the international market.”

• Outlook gloomy - page 17

Plenty on offer at AIMEX 2015 mining exhibition

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Dunedin Invercargill

8 Mining NZ » Issue 1 2015

Mining regions throughout the world are facing increasing challenges to their ability to conduct profitable and successful operations due to global economic volatility, reductions in commodity prices, restricted budgets and fewer personnel.

Despite these challenging conditions, the Australian mining industry is forecast to generate $233.7 billion in revenue, including a profit of $90.7 billion, from over 5,826 enterprises.

As the world’s largest mining exhibition in 2015, AIMEX will provide mining professionals with the innovations they require to meet these challenges, with a 35 year history of delivering the largest concentration of METS suppliers to AsiaPacific’s mining industries.

Beyond the extensive number of product and service launches from exhibiting suppliers at AIMEX, attendees will also have the opportunity to participate in various speaker sessions and panel discussions focused on strategy development, knowledgesharing and innovation updates, as well as networking functions including the AIMEX Industry Dinner.

The METS suppliers that will feature at AIMEX will be showcasing a range of products, technology and services that provide crucial operational efficiencies and cost-savings.

Over 300 suppliers have already been confirmed for AIMEX this year, including major global suppliers BASF, Caltex, Cummins, Davey Bickford, Eaton Industries,

Falk Australia, Flexco, Hexagon Mining (Devex Mining, Leica Geosystems Mining, MineSight & SAFEmine), Hitachi, Kal Tire, Mobile Conveying Services, NHP Electrical Engineering Products and the Sew-Eurodrive Group.

Neville Judd, communications director of Hexagon Mining, says AIMEX 2015 will provide a unique business opportunity for both attendees and exhibiting suppliers.

“There is no substitute for face-toface business. AIMEX delivers a valuable opportunity for Hexagon Mining to make a lasting impression on key industry players with innovative products and a mission to shape smart change.”

The world’s largest mobile conveyor, the Putzmeister Telebelt TB200, is also set to feature at AIMEX, with Mobile Conveying Services identifying AIMEX as providing an innovation platform to industry professionals.

Graeme Cooney, director of Mobile Conveying Services says “while the physical size of our TB200 will get immediate attention, AIMEX provides us with an opportunity to showcase our products and services in an environment where there is a concentration of key industry people in one location, all looking for something new or different that can assist their operations to better manage current and future challenges and opportunities”.

AIMEX will be held from September 1-4, 2015 at the Sydney Showground, Olympic Park, NSW. For more information visit www. aimex.com.au

News »

AusIMM gearing up for Dunedin “The theme is New

Jo Bailey Planning is well underway for this year’s AusIMM NZ Branch conference, to be held in Dunedin from August 30 to September 2, says Rene Sterk, chairperson of the organising committee.

“It’s been 14 years since the conference was last held in Dunedin and we’re excited to be offering delegates high quality presentations on important industry matters, exciting field trips, and a wide range of social activities for delegates and their partners.”

Full details of the conference programme will be announced in late June.

However some of its highlights have already been confirmed, he says.

“The theme is New Standards, and amidst the usual technical talks and updates we will be devoting special attention to a number of changes that have recently been introduced to the industry.”

These include changes introduced by the 2013 regulations, codes and guidelines issued during 2013 and 2015, the introduction of the new Health and Safety Act during 2015, planned changes to the extractive industry qualifications, announced changes to the certificate of competency requirements, and the revised JORC code.

With the mining and exploration sectors going through tough times, Sterk says conference organisers have introduced some additional speakers to the first part of the programme to “drill down” to some of the challenges.

“Tony Haworth will provide his annual overview of the New Zealand mining industry; followed in the same session by Alan Broome who will compare some aspects alongside the current state of the Australian mining industry. He will also provide an analysis of commodity prices.”

Another speaker in the first session is Matt Freeman, who will cover ‘company specific’ activities for the year and broaden this to include industrial minerals and aggregate companies in New Zealand.

Most of the big miners will provide their annual

Standards .... and we will be devoting special attention to a number of changes that have recently been introduced to the industry.” updates on activities at the conference, with the regular students’ and iwi sessions, and panel discussions back on the agenda.

“This year’s panel session will be led by Straterra’s Chris Baker with the topic, ‘the enabling regulator’. It will address important events in recent regulatory decision making, and is likely to create a lively debate,” says Sterk.

The conference will be held in the historic Dunedin Town Hall, a “beautiful” building with modern conference facilities and plenty of room to accommodate trade displays and big crowds.

Social activities include a Welcome Function (Sunday evening) and Student and Industry Function (Monday evening) both at the Town Hall; with a Networking Function (Tuesday evening) at the Toitu Otago Settlers Museum; and Conference Dinner (Wednesday evening) at Larnach Castle.

“One of the changes we’ve made to this year’s programme is to have both the Minister Simon Bridge’s address and the conference dinner on the last day. Larnach Castle is a fantastic venue, and we expect the dinner to be a great closing session.”

A pre-conference field trip on Saturday August 26 to the eastern Southland lignites will see attendees visit accessible seam exposures in the Gore Lignite Measures, as well as the briquetting plant at Mataura and the New Vale operation.

“The trip is intended to provide an overview and update on the potential of New Zealand’s largest onshore energy resource.”

There will a range of informative speakers at the 2015 AusIMM NZ Branch conference.

There is already huge interest in a one-day postconference field trip to OceanaGold’s Macraes open pit, underground operations and processing plant, says Sterk.

“People have started to contact us about booking this field trip before registrations have even opened.”

A post-conference two-day round trip of the Central Otago goldfields led by the University of Otago is also expected to be popular.

“The trip will look at the regional geology and its relationships to both orogenic and placer gold, visiting a broad range of geological features and localities.”

A visit to coal deposits and a special students’ trip has also been planned, and organisers are putting the finishing touches to an “exciting” partners programme. Delegates can stay at the nearby Southern Cross Hotel, which has been completely renovated and is offering special rates.

Although the programme is filling up fast, there may be a few spots still available for presentations if people wish to submit, says Sterk.

“We are very happy with how the conference is coming together and have already had an overwhelming response. This is heartening given the current state of the industry and the fact everyone is watching their bottom line.”

New Zealand Branch

The AusIMM conference dinner will be held at Larnach Castle.

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Issue 1 2015 » Mining NZ 9

Gold » OceanaGold

Macraes outlook remains positive Jo Bailey Although the Didipio Mine in the Philippines is OceanaGold’s star performer, recent forecasts released by the NZX-listed miner show its New Zealand operations are also in good heart.

The company expects steady gold production from its Macraes mine in 2015, and intends to step up exploration at Macraes Flat in Otago over the next two years.

Managing director and CEO Mick Wilkes said in a recent press release the lower fuel price and exchange rate had improved the outlook at Macraes, where the company has already had exploration success, both at surface and underground.

“The underground is higher grade and that exploration will continue for another year.

“On surface we’re looking for more resources, albeit low grade, between the pits we’ve mined over the last 24 years. We’ll be mining at Macraes for three to five years at 150,000 ounces per year from the open pit and underground, which is a similar production level to today.”

Wilkes says Macraes could also be “reinvented” as a gold/tungsten project, as there is a significant amount of tungsten at the site.

“We’re well advanced on the flow sheet and will be conducting a scoping study shortly. This initiative could see Macraes go for an additional 10 to 12 years after the current plant closes down. We are encouraged by discussions we’re having with several tungsten off-takers. It’s exciting.”

Including the Fraser mine and new Coronation pit, the company has 500 permanent workers at Macraes including contractors.

The company’s Reefton operation will go into care and maintenance at the end of this year.

However there is enough exploration potential at the site for OceanaGold to keep its plant in working order.

A successful scoping study was completed at the nearby Blackwater mine last year, with different mining options to be evaluated to reduce project risk.

“It is a project that could be brought into production at a relatively low cost.”

The high grade, low cost Didipio gold and copper operation continues to go from strength to strength.

“It’s been a huge success for the company and continues to perform very well. We expect to connect the mine to the grid in the third quarter of this year, reducing costs by US$8-10m a year.”

Development of an underground portal has commenced at Didipio.

OceanaGold’s Didipio gold and copper operation continues to go from strength to strength.

“The underground has always been part of our mining plans.

“Last year we ran geotechnical and resource drilling and engineering studies to get a better understanding of the ore body and developed an optimal mine plan.

“Now that we understand the ore body much better, we know the new plan will add considerable value.”

Wilkes says that there is significant exploration potential at the Didipio project and in the Philippines generally.

“Very shortly we will commence the geophysical survey of our Paco exploration tenements in the Philippines and plan on drilling there later this year.

“We will also continue drilling within the Didipio Mine area where we’ve recently had some success.”

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10 Mining NZ » Issue 1 2015

“This initiative could see Macraes go for an additional 10 to 12 years after the current plant closes down.”

Latest figures released by OceanaGold show a record year-end profit of $111.5 million on record revenue of $563.3 million.

The company exceeded its production guidance range for 2014 and was able to pay a dividend of US4c per common share.

Its balance sheet has been strengthened through the repayment of nearly US$150m in debt from operating cashflow while increasing its cash position.

Wilkes says the company’s strategy hasn’t changed for the last four years, as it sets out to

• • • • •

build a mid tier multinational company, with robust assets, high margins, strong production values and significant returns for shareholders.

“Our primary recent goals have been to develop Didipio and pay down debt and we have successfully done both.

“We have a very robust business that we feel confident about.

“Most importantly we have demonstrated to the market that maintaining discipline across our business including growth will enhance shareholder value and we will continue to do this.”

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Gold » Newmont Waihi Gold

OceanaGold eyes up Waihi Mine Karen Phelps Newmont is set to sell its Waihi mining operations to OceanaGold Corporation.

The company has entered into a non-binding letter of intent with OceanaGold, which intends to acquire the business by purchasing Waihi Gold Mining Company Limited, the New Zealand holding company for Newmont’s Waihi operations.

Omar Jabara, group executive corporate communications for Newmont Mining Corporation in Denver, says that OceanaGold Corporation approached Newmont with an interest in acquiring Waihi.

“The company [OceanaGold Corporation] has 24 years’ experience in New Zealand. It has a reputation for developing and maintaining strong positive relationships with communities. We believe it will be a good fit for Waihi.”

Mick Wilkes, OceanaGold Corporation managing director and CEO says that the company has long believed that Waihi has strong strategic synergies with OceanaGold.

“We are excited about the prospect of acquiring it and welcoming its experienced workforce to our team. Waihi represents a unique opportunity for us to acquire a high-quality asset that has demonstrated the propensity to extend mine life for more than two decades in what is still a very prospective, high-quality goldfield.”

OceanaGold Corporation has indicated that other factors which influenced the company to purchase the Waihi mining operations include the fact that the proposed acquisition is accretive to shareholders, grows OceanaGold Corporation’s production profile and will further reduce the company’s All-In Sustaining Costs.

There are also synergies with OceanaGold Corporation’s existing operations in New Zealand including the recent announcement of a mine life extension to the Frasers Underground Mine which combined with a weaker New Zealand dollar and lower fuel prices has enhanced the value of the company’s Macraes operations.

“We are investing in exploration along strike and underground at Macraes and believe there is good potential to underpin three to five years of steady operations producing around 150,000 ounces of gold per annum while generating material free cash flow,” says Wilkes.

“This combined with the proposed Waihi transaction creates an attractive and profitable gold business in New Zealand that we believe will generate strong returns for years to come.”

Randy Engel, Newmont’s executive vice president for strategic development says that the agreement with OceanaGold represents another step in Newmont’s strategy to further strengthen its balance sheet by selling select assets for cash at fair value.

WAIHI MINE OPERATIONS OVERVIEW LOCATION:

HISTORY:

Waihi, New Zealand (approximately 150 kilometers southeast of Auckland).

Open pit mine since 1988, and underground operations since 2005.

CURRENT OPERATIONS: Correnso Underground Mine.

PROCESSING:

RESERVES:

Conventional SAG mill, ball mill and CIP circuit, with plant capacity of up to 1.3 million tonnes per annum.

2 Mt grading 5.52 g/t containing approximately 360 koz gold.

1.3 Million

TON

PRODUCTION: ALL-INSUSTAINING Expected to produce on average 100,000 ounces COSTS: per annum through to 2018 from Correnso Underground Mine.

Expected to be US$760-820 per ounce.

GEOLOGY:

EMPLOYEES:

COMMUNITY:

low-sulphidation epithermal gold and silver deposits hosted in quartz veins.

340 person workforce.

Long history of community engagement and support for community development.

OceanaGold says Waihi has “strong strategic synergies” with its own operations in New Zealand.

Newmont Waihi Gold general manager Glen Grindlay says the aim is to make the transition as smooth as possible and that Newmont Waihi Gold employees will continue to be employed by the same company, Waihi Gold Company Ltd, but with new owners.

All of the company’s current existing New Zealand contracts will be transferred directly to the new owners of the company.

This includes the smaller contracts Newmont has with local businesses and the large contracts it has with companies such as Macmahon, Leighton and Boart Longyear.

Grindlay has also stated that all consent

conditions will remain the same and that closure bonds and conditions set by local regulators will remain in place.

“Operating consent conditions for the Martha open pit, the Correnso underground, and the site will remain unchanged.

“This includes vibration and noise limits, and hours of work.

“All other consent conditions will remain the same; for example, the Investment Review Panel (IRP) and Waihi Community Forum (WCF) funding, and Amenity Effects Programme (AEP) payments,” he says.

The chief executive of industry lobby group

“Waihi represents a unique opportunity for us to acquire a high-quality asset that has demonstrated the propensity to extend mine life for more than two decades in what is still a very prospective, high-quality goldfield.”

Straterra, Chris Baker, believes that the proposed sale is good for New Zealand.

“It increases the mining company’s flexibility in exploration and mine planning, including environmental management,” says Baker.

“This could extend the life of gold mining operations in New Zealand potentially by many years.

“Gold is New Zealand’s second most important export to our biggest trading partner, Australia, so the flow-on effect to the New Zealand economy is expected to be significant over time.”

The sale is expected to take place for cash proceeds of US$101m at closing, a US$5 million contingent payment and a one percent Net Smelter Royalty on a recent discovery north of Waihi’s current operations.

OceanaGold will fund the purchase price from cash and undrawn facilities.

The sale will be subject to approval under the Overseas Investment Act 2005, which is expected to take between 60 and 90 days.

Once that approval is obtained, completion of the sale will occur soon after, most likely in July 2015.

Issue 1 2015 » Mining NZ 11

Gold » Titan Resources

Titan - ticking over on the Coast Jo Bailey Riley Perkins literally grew up with an alluvial gold mine in his back yard, so it’s hardly surprising he chose to forge a career in the industry.

As co-director of Titan Resources along with his mother Glenys Perkins, (a West Coast identity with a range of mining interests) he continues to work the very same mine on family land at Bell Hill.

“I started operating machinery at a young age and got hooked. Gold is the bonus that pays for it all.”

Riley’s parents, Glenys and the late John found evidence of historic gold mine workings on the farm back in the mid 1970’s and went mining for themselves in the 1980’s.

“You hear a lot about boom and bust in this industry, so for a small mine to be still running 30 years later with the second generation taking it over is pretty good.”

Riley Perkins has been a partner in the mine since 2004.

Around two years ago Titan Resources employed four people.

However the operation has been scaled back to two following the dip in gold price, and the company running out of access to mineable ground.

Titan’s permit area includes 80 percent Crown Land, which has been under Department of Conservation control since it was converted from a Timberlands production forest to an ecological area around 10 years ago.

The company applied to DOC for access over four years ago and is still waiting for it to be granted.

“We’ve got a large permit area which gives us the potential to be quite a big mine.

However we have only been able to get into small pockets over the last five years.”

At the moment, Riley and his sister Bronwyn are working the mine, which continues to be a consistent producer.

To improve efficiencies and cut the need for extra manpower, they are currently trialling a new screen feeder system, which takes the human element out of feeding the gold plant, he says.

“The system is popular for bigger mines but not usually with smaller ones. But as far as I’m concerned it’s working brilliantly.

“The cost is still cheaper than paying a man’s wages and buying another excavator and the machine cuts a three-man operation down to one.

The drop in diesel price has made it even more economic.”

The gold produced at the mine is sold to a local broker, who sells it on to Australia.

“It’s great we don’t have to go out and market the product ourselves as we deal in a variety of gold, from quite large specimens down to flour; and raw gold that can be sold as jewellery pieces.”

Glenys Perkins has a busy career outside the mine as manager of Taylor Coal.

She is also on the board of the Coal Association of New Zealand; and is a trustee of West Coast Minerals.

Last year she was inducted into the Worldwide Who’s Who for Excellence in Mining.

“Glenys is really busy, but is fully involved in the mine, and usually comes once a week for a site visit. She likes to see what we’re pulling out and to check things aren’t going pear shaped.”

Although the operation has been scaled back, Riley is hopeful they will be able to expand once DOC access is granted and the gold price picks up again.

“We’re very confident of what lies ahead with a fair idea of what’s in the ground and how long it will last. Hopefully we can ramp up again when we get the piece of paper we need to do it. In the meantime we’ll just keep picking away at the smaller areas.”

Increasing efficiency When Titan Resources was seeking a solution to consistently feed material to a gold screen the company’s goal was to increase efficiency and reduce costs.

Equip2 managed to achieve both these things for the client by selecting from its range of products then formulating a solution to specifically suit the client’s needs, says Bert Hart from Equip2 processing solutions.

“Typically the process is for an excavator with an operator to feed the system. Titan Resources wanted a system that could be consistently fed with an adjustable speed option,” he explains.

Equip2 offers a range of screening and crushing solutions to the mining and quarrying industries but the company’s unique point of difference is in how it applies its products to form a solution specifically to solve the client’s problem, says Hart.

In the case of the project for Titan Resources the company formed a new solution, which eliminated the need for a dedicated excavator and driver thereby freeing up this equipment and personnel for other jobs in the mine. The new system is also more cost-effective to operate using around five litres per hour of fuel compared with the approximately 30 litres per hour an excavator might require to get the job done.

Because the feed process is now automated it has resulted in a consistent feed with a more precise water to material ratio – all factors essential for capturing the maximum

12 Mining NZ » Issue 1 2015

amount of gold during the process, says Hart.

Equip2 is part of HG Group Limited.

Established as HireMax in 2003 HG Group’s equipment hire business has progressively grown and it now has ventures in new areas such as excavator attachments and screening and crushing equipment.

Hart says the Equip2 product range offers a great deal of flexibility enabling items to be added or subtracted to result in a truly customised solution.

“Speedy delivery and reliable solutions are important to the mining and quarrying industries. We only offer the most reliable models of tried and tested machines and specialise in fast delivery to site.

“That’s why after sales service is another priority for us so we can get equipment back up and running, and, in the unlikely event that parts are required, ensure the customer has the right part on time at the right place.

“We also supply experienced technical support, to steer our customers in the right direction.

‘The solution we came up with for Titan Resources really demonstrates that we are not just about providing products – we are focused on finding out what the customer needs then finding solutions to help them take their business forward.”

Equip2, 1 Norman Avenue, Masterton, 0800 872 254, sales@equip2.co.nz, www.equip2.co.nz

Titan Resources is trialling a new screen feeder system at its West Coast operation.

Gold » Waikaia Gold

Pleased with progress at Waikaia Jo Bailey Sam March says “continuity” is one of the reasons the Waikaia Gold project on the Waikaia River flood-plain in Northern Southland is one of the most exciting of his long mining career.

“Not many alluvial resources have a seven-year plus life. It’s a big project and is really significant for the local area.”

The mine produced around 20,000 fine ounces of gold over the last year, which was “pleasing” and in line with the company’s resource evaluation drilling, he says.

“We always envisaged the project as a 16,000 to 20,000 ounce a year resource so it’s panning out pretty much as we thought. Hopefully it will continue to produce at the same levels.”

With an estimated resource of around 145,000 ounces, the mine is a significant alluvial gold producer by New Zealand standards.

March says Waikaia Gold’s bespoke floating recovery plant is operating well. It works on deposits in previously unworked ground at between 15 and 19 metres deep in the old river courses, enabling it to reach deposits that early goldminers in the region didn’t have the technology to access.

“The mine produces high-grade gold but we do get periods of lower grade as well.

“This is typical of the river system we’re mining.

You get lag areas in the river and high grade dropoff zones as well. It’s very much a mixture.”

The gold price was a “bit depressed” when the mine went into production in late 2013. However the company is comfortable with a gold price of around NZ$1500-1600 an ounce, he says.

Waikaia Gold’s rehabilitation programme is “right up to date” behind the mining operation, with farmers already grazing stock on the re-grassed area at the southern end of the mine site.

“The property is starting to look very good behind us.”

Waikaia Gold employs 37 people, which includes a team from West Coast firm Rosco Contracting.

“The mine is a big thing for the district and we employ a great team of local men.

“Millions of dollars is flowing into the economy because of the mine and we also support of lot of local organisations and sports clubs by way of sponsorship.”

March says Waikaia Gold enjoys “tremendous support” from the Waikaia community.

“We haven’t had one detractor, which is pretty unusual for this sort of project.”

Sam March, his brother Buzz, and managing director Warren Batt are among the company’s five directors, who spent four years gaining land access, completing feasibility studies, applying

Waikaia Gold’s floating recovery plant works on deposits in unworked ground at between 15-19 metres deep in the old river courses. for resource consents and raising a significant amount of private equity from a diverse range of shareholders and investors, to get the project off the ground.

Now the mine is fully operational, Sam March takes care of its day-to-day management, with Batt spending less time on site.

“Although Warren has taken a step back he still retains a significant role on the technical and business side of things.”

The current operation has about five years left to run, with some potential to expand, he says.

“If the gold price went up significantly it could allow us to bring in lower grades on the extremities of the resource.

“There is also an area in the northern part of our license that hasn’t been resource consented. If we explored it and it proved up following a drilling programme, we would definitely look at consenting it too.”

“We always envisaged the project as a 16,000 to 20,000 ounce a year resource so it’s panning out pretty much as we thought....”

S C O O R CONTRACTORS L LTD TD REEFTON

MINING SPECIALISTS

M 027 431 0211 P 03 732 7033 F 03 732 7035 E admin@rosco.net.nz Issue 1 2015 » Mining NZ 13

Industry Focus »

Improving the rules of engagement Maori expectations around engagement from minerals exploration and mining companies are on the rise, reports Straterra’s Bernie Napp.

With tight commodity prices spurring rationalisation of the New Zealand mining industry, a revolution of a different sort is underway - Maori influence in natural resource management. Over time this will have significant consequences for the way our sector operates in New Zealand.

The roll out of the Government’s “Treaty settlement” programme, relevant Waitangi Tribunal reports, and Maori lobbying of Government are all contributing to Maori wielding more economic and political clout over natural resources, and their management.

Minerals exploration and mining companies will be increasingly dealing with Maori as land owners; or co-managers of resources (e.g., freshwater), and the environment; or holders of guardianship rights to, and interests in resources, including mineral resources.

These developments are no great cause for alarm, however, they do raise the ante for industry when engaging with Maori.

Straterra is taking a keen interest in this debate, and was consulted on government initiatives aimed at better quality engagement between industry and Maori. A key driver for that was the Petrobras fiasco of 2012. The Brazilian petroleum giant got a vigorous reaction from East Coast Maori and others to its seismic surveying programme off East Cape.

Officials had sent written notification to Maori tribes (iwi), and subtribes (hapu) of this permitted activity, and local Maori did not consider that method to be adequate.

Recall that Maori consider themselves to be “Treaty partners”, of equal status to government on local matters, and not among the run of the mill of stakeholders.

What that means in practice is often a murky subject for companies and Maori, where each party’s rights and expectations are unclear. That is what Government has sought to resolve.

Last year New Zealand Petroleum & Minerals commissioned Ngati Ruanui, a Taranaki iwi with petroleum sector experience, to prepare bestpractice guidance on industry engagement with Maori.

Ongoing development: the ante has been raised for the mining industry when engaging with Maori.

“Minerals exploration and mining companies will be increasingly dealing with Maori as land owners; or comanagers of resources.”

Publicised by NZP&M at the AusIMM NZ Branch conference in Hamilton in 2014 this document is now available on http://www.ruanui.co.nz/ environmental.aspx Its purpose is to “establish a voluntary approach to engagement with Maori, provide industry with tools to successfully engagement with Maori, and provide for dialogue between industry and iwi to address opportunities and issues”.

That is exactly what is needed in light of the new Minerals Programme 2013 requirements, for Tier 1 minerals permit holders to report annually on any “engagement with iwi and hapu whose rohe [tribal

A cautionary tale....

I know of one instance of where a representative of a Maori group sent an email to an exploration company, seeking basic information on its activities, and did not get a reply. This followed the announcement of the Northland minerals tender in 2013, subsequent media publicity, and protests in opposition.

After an hour spent on the phone to the enquirer explaining what minerals exploration is, and, what it is not, he was less aggrieved, but only slightly, and fair enough.

I later met one of the company’s representatives, an Australian, at a conference in Kalgoorlie, who said he did not respond at the time because he had nothing to say.

Two beers later with this laconic Aussie geo, we agreed it might have been useful to have been more forthcoming.

Sometimes that is all that is required, e.g., in relation to a few drill holes in a paddock on private land. On other occasions, a lot more effort will be needed.

DO OUR READERS KNOW YOU EXIST? Put yourself in front of potential clients.

Phone: 03 983 5500 Fax: 03 983 5552

www.waterfordpress.co.nz 14 Mining NZ » Issue 1 2015

area] includes some or all of the permit area or who otherwise may be directly affected by the permit”.

The wording of Section 2.13 (1) of the MPM is deliberate. While companies are not legally required to engage – because that would turn iwi into consent authorities – it is a very good idea to do so.

Typical subjects for discussion are: a high-level relationship; explanation of any project; the impacts on Maori and the environment of the project, including cultural impacts; and ways in which the company and Maori can work together on topics of interest. That could include Maori employment, participation in monitoring environmental impacts, community development.

For its part, the Crown is obliged to consult Maori on some matters, and that will raise the base level of understanding of our sector among Maori, a positive development.

Turning to where things are currently headed: With Maori awarded 20 percent of commercial fisheries quota, and aquaculture space, the spotlight has moved to Maori “rights and interests” in other resources.

The media this year has reported a debate between Maori and Government on who owns freshwater, with the latter declaring that it belongs to no one. For Maori, the debate is not over.

In March 2015 the statutory Maori advisory committee to the Environmental Protection Authority on Shell Todd Oil Services’ reconsenting of its Maui

gas operation concluded that local iwi have “an interest in the petroleum resource”, which could be recognised via “resource revenue sharing”, i.e.

STOS shares its income from Maui with local iwi.

Asked by the EPA’s Decision-Making Committee to advise on the Nga Kaihautu Tikanga Taiao report, Buddle Finlay said the issue of revenue sharing falls “within the policy realm of central government and is beyond the EPA’s decision-making function under the EEZ Act”.

The University of Auckland is organising a symposium on June 12 on minerals industry-Maori engagement matters, including “benefit sharing”, with reference to international trends.

I have been invited to speak, and will likely paint a distinction between the rule of law as practised in New Zealand, and the relative lack thereof in other jurisdictions, to create a context for debate.

Also of interest to the minerals and mining industry is increasing iwi and hapu statutory involvement in resource management planning, and consenting of projects, in their areas or interest (rohe). The signs of this have been materialising for some years now.

The co-management arrangement for the Waikato River; Hawke’s Bay Regional Council joint planning committee for catchment management; ownership of Te Urewera National Park by Tuhoe, to be managed with the Department of Conservation; are recent examples.

The take-home message for explorers and miners is that they will be increasingly engaging with Maori in more substantial, even “holistic” ways. If that leads to more durable and worthwhile outcomes for companies and Maori, that can only be a good thing.

Bernie Napp is policy manager of Straterra

Industry Focus »

Govt must step up to the plate A new report by the New Zealand Initiative says New Zealand’s resource legislation is in desperate need of an overhaul.

Jo Bailey reports.

More input from central government is essential for New Zealand to reverse its anti-development mindset, tap into its abundant mineral resources, and improve ecological outcomes in the mining sector, says a new report released by think tank, The New Zealand Initiative.

Key recommendations of From Red Tape to Green Gold, authored by research fellow Jason Krupp, were that central government should share royalties with local communities; fulfil its obligations to set national policy direction, and modernise the ageing Resource Management Act in order to “unblock the regulatory logjam that has stalled minerals development”.

“It was very obvious when I climbed into the research that the government was the missing link, particularly when compared to countries like Australia, Canada and the US, where regulators are actively involved and regulations are more black and white. New Zealand’s central government has abdicated its responsibilities on this front for the last 24 years,” Krupp says.

Although there have been efforts to reform the RMA, Krupp says these have come to nothing because it is such a “divisive piece” of legislation.

“There seems to be an appetite to encourage resource activity. However the process is fraught with risk and is politically uncomfortable.

“If the government was to provide this kind of guidance it would have go through a democratic process and submissions and face the risk that by tinkering with the legislation, the resource estate could be locked down further, or even reduced to absolutely nothing.

“It’s not an entirely irrational response from the government to say the current consent process is difficult, but at least some projects are getting through.”

Challenges aside, Krupp says central government needs to fulfil its RMA obligations in the medium term by developing national policy statements and national environmental standards for mining, landscapes of national significance and ecological offsets.

“Long term change is also needed to modernise resource legislation in New Zealand to bring it up to the standards of regulatory best practice, specifically in shifting to a risk management approach.”

The adoption of a whole-of-government approach to resource permitting, consenting and land access arrangements is a major requirement of any reforms, he says.

A former business journalist, Krupp joined The New Zealand Initiative as a Research Fellow 18 months ago, and spent eight months writing two reports on New Zealand’s minerals sector.

The first Poverty of Wealth: Why Minerals Need

Total Hose & Fitting Service

Jason Krupp: “The industry needs to build awareness that mining can be a positive contributor to the economy....”

“There seems to be an appetite to encourage resource activity. However the process is fraught with risk and is politically uncomfortable.”

to be Part of the Rural Economy highlighted how the current regulatory framework, high cost, overly complex process and uncertainty of outcome made even the most desirable project a risky prospect.

“This is particularly concerning for mining ventures as these capital intensive projects are inherently risky even before a high degree of regulatory uncertainty is added to the process.”

The “painful” consent process Bathurst Resources went through for its Escarpment Mine on the West Coast sent a bad message to developers of other new projects, he says.

“Without the proper framework in place, more projects could end up in a costly and lengthy courtroom battle between lawyers and planners instead of being worked through by scientists, engineers and policy makers.

“There is no altruism here. People go into these ventures to make a profit, and rely on capital from investors who need some confidence in the decision making process.”

The report also identified how the loss of existing or potential minerals projects was “choking

a much-needed source of lifeblood for rural communities caught in a cycle of economic and population decline” which was not the outcome envisaged by policy makers who drafted the RMA in 1991, he says.

“All the things you would hope to see in the implementation of legislation such as standardisation, sharing of ideas and consolidation are missing.

“There is incredible fragmentation between regions in New Zealand, with no sharing of information, meaning every local government authority or industry starts from scratch with the same problems. Central government needs to become the glue that sticks everything together.”

During his research Krupp worked closely with local governments throughout New Zealand, which he says need more support through the consenting process.

“There seems to be a perception in Wellington that things get a bit hairy when you go to the edges of the government network.

“However I was surprised at the levels of

competence and openness to development at a local government level. I believe it could be transformative if ways could be found for central government to lower the regulatory burden on local government, and resource them with the tools to enable them to make faster decisions based on evidence, science, and black and white rules.”

Krupp says the mining sector also needs to be “less bashful and start owning it” when it comes to their environmental policies and remediation efforts following mine closures.

“The industry needs to build awareness that mining can be a positive contributor to the economy without producing an environmental millstone.”

As a market-oriented thinktank The New Zealand Initiative (formed in 2012 from the merger of the New Zealand Business Roundtable and the New Zealand Institute) is not directly involved in lobbying for legislative change.

However it’s “good, credible, evidence based research and macro analysis” provide powerful tools for miners and lobby groups such as Straterra.

Given the strong views within New Zealand on the subject of mining, Krupp says he was expecting more of a backlash to the findings of his reports.

“However, if anything there appears to be general consensus.

“Broadly speaking New Zealanders are fine with the compromise of having more mining as long as environmental protections are high and the activities will make a positive economic impact.”

call 0800 4 ENZED or visit www.enzed.co.nz Issue 1 2015 » Mining NZ 15

Coal » Bathurst Resources

Bathurst confident despite slump Jo Bailey Bathurst Resources’ new chief executive is confident the company has a secure future despite current global market conditions.

“We have a steady cashflow from our domestic coal operations, are addressing overheads so we can increase our cash balance, and are actively seeking ways to decrease debt so we are in a good position when things improve,” says Richard Tacon, who has led the company since March following the resignation of former managing director and chief executive, Hamish Bohannan.

The industry veteran was formerly Bathurst’s chief operating officer, and had been one of four executives set to depart the company after a business efficiency review highlighted the need to substantially decrease corporate overheads.

However Bohannan decided he would move on himself “to seek a fresh challenge,” when it became apparent Bathurst’s export Escarpment project would not be progressing in the short term.

“It’s been well reported that the coal price doesn’t look like improving over the next 12 months so we’ve made the decision to concentrate on our profitable domestic business instead,” says Tacon.

Bathurst’s management team has been significantly reduced over the last year or so, and it has also laid off people in Westport as part of its “realignment” into a leaner operation.

“We still have our office in Wellington. However its size is also decreasing as people leave.”

As an operations man, Tacon says his focus is on the company’s current position, rather than where it could be when its export business comes on stream.

“My goal is to maximise recovery and improve efficiencies at our sites to enable the company to survive through the downturn.

“We want to build our cash balance over the next few months so that when the market improves we have the money in the bank to move the Escarpment project straight into its next phase.”

He says the company’s Takitimu operation is performing well and has recovered from the dry summer that hit the east coast of the South Island.

“This operation has a good future.

“We have opened up the mine at Coaldale

16 Mining NZ » Issue 1 2015

which replaced the Takitimu pit within the complex giving us another two or three years at our existing level of production.

“We are already planning for the next extension at the site which combined with our new New Brighton permit, should give us a further 10 years at existing rates.”

Bathurst’s small Canterbury Mine west of Christchurch is back in production with strong demand for its coal. There are plans to expand this operation in the future, says Tacon.

The company has considerably cut operating costs at its Cascade operation on the West Coast by mining overburden and exposing only the amounts of coal it needs for its markets.

“We did some big cut-backs at the site to access this block which is paying dividends now.”

Some of the people and equipment from Cascade are being utilised at Escarpment where a small amount of coal is being produced for the domestic market.

Richard Tacon is yet another Kiwi who returned “home” to join Bathurst after a long stint in Australia.

Since his career began at Greymouth’s Liverpool State Mine in the 1970s, Tacon has worked in almost every role in the coal mining industry.

He joined Bathurst as its chief operating officer in 2012, after 32 years living and working in Australia where he held senior leadership roles.

Following his return to New Zealand Tacon has been part of a working party involved in the development of new industry regulations particularly around health and safety.

“It was a really good process with excellent collaboration and industry input taken on board.”

He says the company is well positioned to implement the new regulations.

“We already place a lot of emphasis on safety and training our people.

“All our supervisors have attended risk management courses, with their feedback and knowledge helping us make our mines even safer and more efficient.”

The company will continue to operate under a “constant state of review” in the current market conditions, he says.

“I can’t say this is the end of the review process, because we don’t know what the end looks like. However we will continue to match the business to meet the market, and at the present time believe we have it at the right scale.”

Richard Tacon: “My goal is to maximise recovery and improve efficiencies at our sites to enable the company to survive through the downturn.”

Coal » Industry News

Gloomy outlook for Solid Energy Hugh de Lacy Solid Energy seems to be teetering on the edge of oblivion following the resignation in February of chairperson Pip Dunphy, who had been in the job barely a year, apparently over her disagreement with Finance Minister Bill English as to whether the state-owned collier has a future.

E-mails released in Parliament by MP Clayton Cosgrove appear to show that Dunphy could not reconcile her own belief that Solid Energy should be wound up with the minister’s determination to save it.

Salvation seems far away, however, with global hard coking coal prices sagging below $US110/ tonne ($NZ146/t) for delivery in the current quarter – 6% down on the first quarter - and most pundits predicting that the prices still have further to fall yet.

English said in March that the Government was “doing everything we can to secure the continuity of the company,” but ruled out further loans, guarantees or cash to ease Solid Energy’s $395m debt burden.

Acting chairman Andy Coupe signalled this month that further job losses at the company were inevitable, and that talks were ongoing with major lenders.

This would seem to suggest the lenders may have to agree to a further debt write-off on top of the $75m they relinquished in late 2013.

Two earlier rounds of cost-cutting and job losses have failed to have much impact on the company’s health since the collapse of metallurgical coal prices from a peak of $US300/t ($NZ400/t) in 2011.

The latest outlook for coking coal, a key element in steelmaking, became gloomier when Australian producer BHP Billiton settled on a

About half of Solid Energy’s annual production of about four million tonnes is coking coal for export, with the rest being thermal coal for local industries.

trend-setting second quarter supply price to Nippon Steel of $US109.50/t ($NZ145/t), 7% above the spot price at the time.

About half of Solid Energy’s annual production of about four million tonnes is coking coal for

Fire protection crucial for expensive mine equipment Protecting mining equipment from fire could save companies millions of dollars, says Steve Benseman from Fire Suppression Systems.

“If companies have a complete burn-out of one of their key pieces of equipment, it could be out of action for up to a year which would cost them an awful lot of money.”

Benseman says the lead time to replace highly specialised mining and construction equipment is currently around 50 weeks from when an order is placed to when it arrives in New Zealand.

“That’s why it is imperative companies protect their existing machinery as the combination of large amounts of fuel, hydraulic oil, extremely hot surfaces and electrical components create an operating environment with an inherently high fire risk.”

Benseman has 13 years experience in advising, installing and maintaining fire suppression systems at New Zealand mine sites.

He says it is important companies deal with a specialist such as Fire Suppression Systems to ensure their systems meet the testing and certified standards required of the industry.

“Some of our competitors dabble in fire suppression work outside their core business, but I believe we’re the only company in New Zealand to focus solely on mobile equipment fire suppression.”

Fire Suppression Systems offers a full range of systems for the mining, construction, drilling, forestry and mobile equipment industries.

Benseman is based in Auckland and employs three mobile technicians who operate from other parts of the country.

Between them they visit clients’ often remote sites in fully set-up vehicles that enable them to provide complete equipment install, maintenance and servicing on-site.

We pride ourselves

export, with the rest being thermal coal for local industries.

The main downward drivers of the coking coal market are China’s falling import volumes, down 17.3% and 13.8% in 2013 and 2014 respectively,

while leading exporter Australia continues to increase production at its Queensland mines.

Most other exporters are either cutting production or mothballing mines while trying to ride out the slump by minimising their losses.

A full range of fire suppression systems for the following surface and underground applications:

• Mining / Resource Industries • Construction • Drilling • Forestry • Mobile Equipment

on delivering reliable, proven products that give our customers peace of mind ....”

The expert team can also provide clients with advice on preventative measures and maintenance practices they can undertake to further reduce fire risk.

Benseman is the New Zealand agent for foam fire suppression system Sandvik NFP 1000. Around 18,000 Sandvik systems are now being used worldwide, he says.

The system is fully compliant with the new Australian standard AS5062.

A key feature is that it is completely selfcontained so even if there is no electricity or person to operate the system it will still activate in the event of an emergency.

Benseman says Fire Suppression Systems recently installed fire suppression systems to 115 machines for the Downer/Solid Energy Stockton Alliance on the West Coast, its biggest single install to date.

“We continue to look after every other major mine in the country.

“We pride ourselves on delivering reliable, proven products that give our customers peace of mind that their equipment and staff will be protected should a fire incident occur.”

Fire Suppresion Systems P.O. Box 334081 Sunnynook, Auckland Steve Benseman Ph: 021 918 900, E-mail: sbenseman@clear.net.nz

Issue 1 2015 » Mining NZ 17

Industry News » Gold

Strategic to target Pioneer Shoot Jo Bailey The utilisation of “vast amounts” of historical information combined with targeted fieldwork has enabled ASX-listed company Strategic Elements (ASX:SOR) to identify a high-grade gold target beneath the Aorangi Mine in Golden Bay’s historic Golden Blocks goldfields.

Director Charles Murphy says the Western Australian company deliberately pursued this exploration strategy following the discovery of lost documents on the forgotten Golden Blocks goldfield within New Zealand archives.

“The historic documents contained a wealth of valuable information regarding the nature of mines, their reef systems and the high-grade shoots that were previously mined.

“It made total sense for to bring all this data together with the results of our field programmes before deciding where to focus our first drill program.”

Taking this approach has saved the company substantial amounts of capital and time, he says.

“We’re very pleased with our progress,” says Murphy.

“We try to be as systematic as we can about everything while being careful with shareholder funds.”

Within the next few weeks Strategic Elements plans to start applying for the licenses and approvals required to conduct a drilling programme that will target the potential continuation of the historic workings known as Pioneer Shoot.

This was the area being worked in 1914 when the mine closed due to water, gas and labour shortages.

Through its sampling and mapping programmes and field trips, Strategic Elements is confident higher grade gold in any continuation of Pioneer Shoot would be contained within a shale unit named the Mine Bed. “Confirming the importance of the Mine Bed has been a key outcome of our work to date and we are extremely confident that if the high grade gold continues at depth, it will be in the Mine Bed. This gives us a very clear target to drill at.”

The last exploration tilt at the mine drove into a shoot and hit 663.8 g/t over 0.75m - so the team has a clear goal ahead of them, he says.

“With the average head grade of primary ore to the battery estimated to be 46.9 g/t2 gold, free milling and easily recoverable, the combination of exceptional grade and simple recovery is a significant potential feature of the project.”

Whilst licenses and approvals are being sought, the company will continue exploring to complete a 3D Mine Model and position intended drill holes.

Strategic Elements will soon start applying for the licenses and approvals required to conduct a drilling programme that will target the potential continuation of the historic workings known as Pioneer Shoot.

“The historic documents contained a wealth of valuable information regarding the nature of mines, their reef systems and the high-grade shoots that were previously mined. “ The 3D model is also expected to accurately depict the orientation and dip of the Mine Bed, which will facilitate future surface and underground exploration within and around the Aorangi Mine.

“The development of a robust conceptual mineralisation model will greatly enhance the effectiveness of drill hole targeting and help to maximise the returns from any planned drilling budget.”

Strategic Elements has contracted wellregarded Mine Engineer John Taylor to conduct

Gold price bottoming out After a sharp slump towards the end of the first quarter to less than $US1200/ounce ($NZ1600/oz), gold looks to be on the verge of bottoming out over the next two quarters before regaining its current levels in the fourth.

The yellow metal was at $US1192/oz ($NZ1589) towards the end of April with most commentators, including banker JP Morgan, predicting further softness in the market dragging it to around $US1150/oz ($NZ1533/oz) in the third quarter before a mild recovery which would take the full year’s average to $US1188/oz ($NZ1584/oz) – about what it is now.

That lift is likely to be temporary though, with a further 2 percent decline predicted in 2016.

This relative stability, which comes after three years of fairly rapid price erosion from

18 Mining NZ » Issue 1 2015

a peak of around $US1700/oz ($NZ2265/ oz) in 2012, is put down to an expected start to the United States Federal Reserve Bank’s raising of interest rates as the world continues its slow recovery from the 20072008 Global Financial Crisis.

The outlook is helped by Asian gold sales expected to recover the from Chinadriven slump of last year, less selling of the commodity by Western investors, and a reduction in new gold supplies.

Goldmines last year produced a record 4349 tonnes, but this is expected to fall by around 15t this year.

The important Chinese and Indian jewellery markets are expected to firm by around 3 percent this year, although that will be offset to some degree by another drop in central bank purchases, down to around 520t this year from just under 590t in 2014.

the survey work and generate the 3D model.

“John and his team are exceptionally qualified for the work and we are very lucky to have them,” said Murphy.

Surface exploration will also continue on “exciting” targets along strike from the Aorangi Mine and at other locations outlined by prior fieldwork and structural studies.

With approvals and permits to be applied for and gained, Murphy says that it is impossible to put a timeframe on when drilling might commence.

However he is not overly concerned about any potential risks of the consent process in New Zealand.

“Mining projects face risk in any country, whether it is political, a risk over tenements or tenure, or environmental approval. It’s just something that has to be managed wherever you are.

“As long as everyone works through the process in good faith there should be a good result.

“We’ve had a positive experience with this project so far, and hope that continues.”

Strategic Elements has also assessed several other potential projects in New Zealand.

“We’ve looked at a few other potential projects, but when it comes to where we want to put our current funding, there is no more compelling target than the Pioneer Shoot.”

New Talisman stays confident Hugh de Lacy Buoyed by a Waikato Regional Council report that said local water quality would be largely unaffected

by New Talisman Gold Mining’s plans to mine at its historic Bay of Plenty site, the company is heading into a court challenge later this year by environmental lobby group Protect Karangahake (PK).

New Talisman was last year granted a resource consent by the regional council to resume underground mining in the rich veins of the Karangahake Gorge, near Waihi.

However, PK is taking both the council and the company to court to challenge the consent’s legality.

That prompted the regional council to commission a report by minerals expert Dr James Pope into the effect of New Talisman’s plans on water in the adjacent Karangahake River.

Pope’s report noted that the company plans to recirculate the water it will use in its mining

operation, and it would have little if any effect on waterways.

New Talisman is cited as a co-defendant with the regional council in the PK action.

The company’s chief executive, Matt Hill, told Mining NZ he was buoyed by Pope’s report, and was confident PK’s challenge to the regional council’s non-notified resource consent process would be unsuccessful.

“It’s a closed water system and there will be no discharge,” Hill said.

PK’s concerns about water contamination were based on an affidavit by caves expert Dr Chris Hendy that mining would release acids and heavy metals into the waterways, but at the time Hendy was unaware that New Talisman would be operating a closed water system.

Hill said Hendy and Pope had since met and reconciled what had seemed to be their differences.

As a result, New Talisman was “absolutely confident” the PK challenge would fail, and the company would be able to complete bulk sampling and start mining in the second half of this year.

Industry News »

NZ Drillers set for 40th anniversary Jo Bailey Identities from the drilling industry will gather to celebrate the 40th anniversary of the New Zealand Drilling Federation at the DRILL2015 conference to be held in Greymouth from August 20-23.

“We are delighted to have foundation members aged in their 90’s coming along and also hope to get a good response from the federation’s 10 life members,” says Judi Mears of Westmere Drilling, who is organising the event with husband Ken. She says DRILL2015 presents a great opportunity for delegates to learn about new compliance requirements, ideas, trends and innovative products; network; and “listen and learn from the legends”.

“It’s even more important to come together when times are a bit tougher as these sorts of events can provide practical positive advice, and also help to reignite enthusiasm for the industry,” says Judi.

They are putting together a packed programme for the event, which will include workshops, demonstrations, industry presentations, a Trade Show, field trips, the NZDF AGM, and plenty of time for delegates to enjoy some famous West Coast hospitality.

Generous early bird specials are being offered to delegates and trade exhibitors until May 31.

“We encourage people to register as soon as possible to take advantage of the cost savings and have the first choice of field trips.

“As conference organisers it is also helpful if we know numbers well in advance, as we have

to bring buses in from Christchurch to transport delegates to the various activities, and between the conference venue and accommodation,” says Judi.

The event starts on Thursday August 20, with a TranzAlpine train journey to Greymouth, followed by registration and official opening function at Monteiths Brewery.

Friday 21st is the ‘Big Day Out’, with a choice of field trips to rigs, open cast mines and alluvial mines, with an entertaining partner programme included.

Following the AGM at Tai Poutini Polytechnic is a commemoration dinner, celebrating the federation’s first 40 years, which will include photographic presentations and tales from some of the “drilling legends”.

A Trade Show will also get underway at Shantytown on the Friday.

“We’re lucky to have had a great response from Australia, with at least one and possibly two new high-tech drilling rigs on display, as well as the latest safety equipment from Western Australia.”

An extensive range of exhibits will also include NZDF memorabilia, says Judi.

The workshops and presentations get underway on Saturday August 22.

These include Chief Inspector Mines Tony Forster discussing how the new health and safety regulations will impact on the drilling industry; the Motor Industries Training Organisation providing an insight into new New Zealand drilling qualifications; and a roll out of the new Driller’s Registration System.

The West Coast will play host to this year’s NZDF conference.

Issue 1 2015 » Mining NZ 19

Environment »

Restored Wangaloa sitting pretty South Otago’s Wangaloa Mine is a great example of what can be done to restore an old mine site.

Jo Bailey reports on the mine’s reincarnation.

The dedicated work of a small group of Kaitangata locals combined with some significant funding from Solid Energy has transformed the old Wangaloa Mine site in South Otago into a stunning recreational and wildlife reserve.

An open weekend was held at the site in mid-April, when visitors were able to explore the appealing natural environment, with its abundant birdlife, restored mine lakes, native bush, and newly established trees.

“The weekend went really well, especially on the Sunday afternoon when car after car was coming in,” says Lenny Greene, an ex-miner who was part of the group of five local enthusiasts who completed much of the rehabilitation work at the site.

Wangaloa was an open cast mine that operated from 1945 to 1989, producing around 750,000 tonnes of coal, supplied mainly to a single customer, Dunedin Hospital.

When the hospital started to move away from coal as a fuel source the mine closed down.

Solid Energy eventually took over the site from State Coal, and in around 2002 decided to rehabilitate the mine, with the aim of creating a biologically diverse, self-sustaining area.

Mine engineer John Taylor (who was working for Solid Energy at the time) was tasked with the job of finding the mine and then reporting back on its condition.

“The mine had been abandoned for a few years by the time I knocked on the neighbouring farmer’s doors and said I was from Solid Energy.

“She said, ‘that’s interesting - the last person we saw was from State Coal. He said he would be back soon and that was 10 or 15 years ago’.”

Taylor says the old mine site had some “issues”.

“It was really difficult to get any vegetation to grow on the quartz gravel overburden, so Solid Energy carted in huge amounts of topsoil and replanted the entire site with around 70,000 seedlings.

“They could have planted the whole thing out in pine trees as required by the mining license and forgotten about it but to their credit they decided to really improve the site.”

The company put up to $100,000 into the project for earthworks, planting, weed and pest control, and predator fencing.

Aside from the earthworks and planting most of this work was done by the local team, a spin-off from the Kaitangata Black Gold community group, says Lenny Greene.

The Kaitangata crew: from left, Graeme Storer, Lenny Greene, Joy Greene, Fred Uren, and Allan Thomson did much of the Wangaloa rehabilitation work.

“They could have planted the whole thing out in pine trees as required by the mining license .... but to their credit they decided to really improve the site.”

“I first got involved with the project 8 to 10 years ago, but it only really got off the ground about three years ago when Jean Proctor of the community group encouraged a wee group of us interested in the mine to get on board.

“Solid Energy gave us some money and we went for it.”

The men spent hours clearing gorse to uncover the existing tracks at the site. They also established a loop track for walkers, put up predator fencing, and built toilets at the site.

Their current project is cutting tracks through native bush on the steep banks alongside the

ponds at the site, as well as carrying out ongoing maintenance and spraying work.

“We still meet every month or so depending on what’s going on,” says Lenny.

People can access the site at any time, either by making the 300-metre walk from the gate on foot, or by getting a key from one of the custodians to enable them to drove onto the site for recreation or to freedom camp.

“We were originally going to completely open the site to the public but thought that might lead to too much vandalism.”

John Taylor happened to be in Invercargill the

same time as the open weekend, so decided to stop by and check out how far the site had come since he rediscovered it for Solid Energy more than a decade ago.

“I was amazed at the interest in the open weekend, with people there from all over the lower South Island,” says Taylor.

“The big mine lake is still there with beautiful vegetation growing around it, there are some nice walkways, and even more impressive is the huge coal seam sticking out of one of the mine walls,” he says.

“This is a great example of what can be done to restore an old mine site. The team who worked on this project have done a fantastic job.”

After spending so much time rehabilitating the site, Lenny Greene is keen to see it preserved for future generations.

“I’ve never owned anything bigger than a quarter acre section in my life, so it’s great to be one of the stewards for this special site.”

People can access the site at any time, either by making the 300-metre walk from the gate on foot, or by getting a key from one of the custodians to enable them to drove onto the site.

20 Mining NZ » Issue 1 2015

Environment »

The Wangaloa Mine rehabilitation has created a biologically diverse, self-sustaining area. The mine lake is now surrounded with regenerating vegetation.

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Issue 1 2015 » Mining NZ 21

Quarrying » Industry News

Plenty to cover at annual conference “It’s an opportunity for

Karen Phelps Around 450 delegates, partners, sponsors and distributors are expected to attend this years QuarryNZ conference in Hamilton.

Chairman of the conference committee and chairman of the Waikato/Bay of Plenty Institute of Quarrying, Allan McDonald, says the focus on the conference - being held at Claudelands from July 15-17 - will be on the future of the industry as the region gears up for several significant projects including the Hamilton bypass to be awarded later this year.

McDonald says the conference will help industry to prepare in terms of machinery and labour to meet the work load ahead. “We have at least four to seven years of work coming up in the Waikato-Bay of Plenty region. It will go through a similar growth spurt to that which Christchurch has experienced.

The conference will help assist businesses with future planning,” explains McDonald.

At the conference a representative from NZ Transport Agency will speak on the organisation’s plans for the future while the Waikato District Council will give an indication to industry of local government plans.

While larger roading contracts will inevitably go to the more significant industry players smaller companies can still benefit from a number of topics which will be covered at the conference including speakers on health and safety and training.

A representative from WorkSafe New Zealand will speak and Les McCracken, CEO of MinEx will cover MinEx’s shift of focus in 2015 from those sectors covered by the changes to the New Zealand Mining legislation arising out of the Pike River Royal Commission to regulations to the quarry and alluvial gold sectors who will face similar issues with the introduction of a new Health and Safety act which is risk-based.

everyone to learn about what’s happening in the industry so they can return to their businesses with new ideas and information.”

All things quarrying will be up for discussion at this year’s conference.

There will also be a number of talks on general industry topics including appearances by guest speakers from overseas such as Paul Sutton, general manager of the Institute of Quarrying Australia.

Other speakers include Iain Simmons, construction director on the Auckland Waterview Tunnel project, Tony Forster, who is engaged in the

Pike River mine recovery proposals, and Parviz Namjou, who has over 15 years work experience in hydrogeology, groundwater modelling and assessment of quarry groundwater effects, who will speak on the effects of quarry dewatering in fractured rocks on groundwater and stream flows.

Professional engineer for more than 15 years, Gerhard van Blerk, will speak on the research taking

place in the area of road aggregates and how the findings can be translated into practice, specifically changes that have been made to the specifications for sealing chip and base course aggregate.

The conference will also include the Aggregate and Quarry Association of NZ and the Institute of Quarrying NZ annual general meetings on the 15th, a field trip to Stevensons Resources’ Rotowaro Quarry and an industry awards night.

Around 75 exhibitors will showcase the latest industry products in a tradeshow while the conference is taking place.

McDonald says that the conference is an opportunity for all those involved in the quarrying industry to interact and exchange ideas, take the opportunity to hear the experiences of guest speakers and to socialise with old friends and colleagues as well as make new contacts.

“It’s an opportunity for everyone to learn about what’s happening in the industry so they can return to their businesses with new ideas and information.”

More information about the QuarryNZ conference as well as a programme of events and speakers can be found at www.quarrynz.com

loadsense weighing in New arrival in the New Zealand market weigh technologies business loadsense is continuing to experience positive growth due to support from the industry, says loadsense general manager of sales and marketing Matthew White.

He says the company’s objective and approach has been to continue to establish and develop high value working relationships with both OEM’s and end user customers. The company is already attracting a number of high profile clients including Ravensdown Co-Operative.

“Ravensdown Co-Operative made the switch to loadsense by establishing commonality from an operational point of view, with a diverse fleet of older and new equipment being interchanged,” says Kevin Gettins, Ravensdown General Manager for Mobile Plant.

“Loadsense came up with a value proposition to provide us with replacement remedies for competitively branded scale systems and take that pain away of throwing dollars at something that may end up being hardly optimised. They provide transparency with possible solutions for us to work out the best fiscal fit for each unit.”

and anticipation of what he can bring to the table from the global technologies platform,” says White.

Loadsense distributes a range of precision weigh equipment. The scope in this range covers both conventional and wireless scale solutions. The systems can be fitted onto vehicles with air, hydraulic and mixed suspensions. A control unit is directly installed in the driver’s cab and displays the weight loaded on-board in real time.

“Loadsense products use a variety of digital sensors positioned on the vehicle’s suspensions and displays all data on an easy to read display, without having to push any keys. In addition weight data can be printed by on-board mini-printer. It can also connect to any satellite service provider.

“The system pays for itself immediately because knowing the weight of the load when you travel means optimizing transport times and economic yield in complete safety,” says White.

Based in Mt Maunganui, loadsense is owned by industry icon Roberto Stevens who brings his valuable expertise to loadsense clients.

White says this has helped loadsense to grow rapidly.

He says that the company has already established a reputation of developing strong relationships within the quarry and mining sector.

As a solution-based company White says that loadsense focuses on offering customers a turn key approach. The company offers in-house nationwide installation and specialist expertise to develop customised solution.

“The market remembers and associates well with Roberto’s specialist experience and there is a renewed level of excitement

Visit the loadsense stand at the QuarryNZ Conference in July. For more information www.loadsense.co.nz

22 Mining NZ » Issue 1 2015

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Quarrying » Wiri Quarry

Quarry plays key role in Waterview Karen Phelps While most of the focus is on the Waterview Tunnel’s impressive tunnel boring machine – Alice it is the work at Wiri Quarry, which is quietly taking place in the background, that is playing a pivotal role in the project.

While 14 trucks have been arriving at the quarry per hour with spoil from the project’s second tunnel this figure is soon expected to rise to 21 trucks per hour during the day and 15 per hour at night when Alice begins her main drive towards Owairaka.

“We aim to place about 90% of the stockpile around the quarry before Alice’s main drive in the second tunnel,” says Wiri Project Engineer, Nick Fu. “The stockpile is spoil from the first tunnel which has been drying over summer.”

Alice has already excavated more than 200 metres of the second tunnel and will soon finish the second – northbound – tunnel with an expected completion date of spring 2015.

When complete the Waterview Connection tunnels will be New Zealand’s longest and deepest road tunnels. Each will carry three lanes of motorway traffic.

All material from the NZ Transport Agency’s Waterview Connection project is first emptied into the spoil handling building at Waterview before being transported to Wiri Quarry.

When it arrives it has the consistency of toothpaste and is spread across the quarry floor by a fleet of bulldozers, dumpers and excavators to form a 200mm thick layer. Mounted heavy duty disk harrows are then run over the layer to churn the material up to facilitate the drying process.

Fu says that depending on the weather and moisture content of the spoil, it typically takes 7-8 days for fresh material to dry.

• to page 24

Big job: loading out of the main stockpile from Tunnel 1 - the spoil has been drying over summer.

Issue 1 2015 » Mining NZ 23

Quarrying » Wiri Quarry

Wiri Quarry plays key role in Waterview Connection • from page 23

“Material arrives at

Once dry a compactor is rolled over the spoil in four passes.

Independent tests are then carried out every 20 metres over the entire 27ha site for compaction, soil density and moisture content.

Then the whole process begins all over again.

Fu says the major challenging facing the team is the weather.

He says that the 2014/15 summer has been ideal weather for compaction.

“Material arrives at around 40% moisture content and this needs to be reduced to 10%. When the weather plays up we stockpile the spoil or lay it out in wind rows so the wind can help with the drying process,” explains Fu. He says the process being carried out at the Wiri Quarry has generated international interest.

A small part of the quarry was also used for processing the basalt rock, which was drilled and blasted as part of the project.

around 40% moisture content and this needs to be reduced to 10%.”

Fu says that this was reprocessed into separate grades to be reused in the tunnel project.

The Wiri Quarry is owned by Winstones and is being leased for the duration of the project by the Well-Connected Alliance comprising the New Zealand Transport Agency (NZTA), Fletcher Construction, McConnell Dowell, Parsons Brinckerhoff, Beca Infrastructure, Tonkin & Taylor and Japanese construction company Obayashi Corporation.

Work at the Wiri Quarry is expected to be complete by October 2016 with land set aside for commercial redevelopment.

Waterview Connection: Fast Facts • The $1.4 billion Waterview Connection project is the largest roading project ever undertaken in New Zealand and is on track to open to traffic in early 2017.

• The 2.4km bored twin tunnels are being constructed by the 10th largest diameter (14.4m) tunnel boring machine in the world.

• The completed tunnels will be the longest road tunnels in New Zealand. Lyttelton, at 1.94km, had previously held the record since that tunnel opened in 1964.

When the spoil arrives it is spread across the quarry floor by a fleet of bulldozers, dumpers and excavators to form a 200mm thick layer.

• 800,000 cubic metres of spoil excavated from the tunnels will be disposed of on the 27ha Wiri Quarry site.

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24 Mining NZ » Issue 1 2015

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Work at the Wiri Quarry is expected to be complete by October 2016 with land set aside for commercial redevelopment.

Issue 1 2015 Âť Mining NZ 25

Quarrying » Blackhead Quarries

Blackhead - quarrying by example Peter Owens Blackhead Quarries Limited is not just a joint venture for a specific project, but also a joint venture project between Palmer and Son Limited and Fulton Hogan Limited.

Palmer and Son Limited is an old-established Dunedin business and the current general manager of Blackhead Quarries Limited is Tony Hunter, who is the fifth generation of his family to be involved with the company.

Both companies are family businesses and had operated some sections of their enterprises as a joint venture since 1986. The principal purpose of this joint venture was the quarrying of rock located at Blackhead on the seaward side of Green Island near Dunedin.

However in 2002, the drilling operations of both companies were transferred to the joint venture company. This involved the transfer of the Palmer and Sons quarry and plant at Logan Point and Fulton Hogan Limited, transferred its sand plant at Walton Park near Fairfield, Balclutha Quarries and a mobile crushing facility.

Tony Hunter, who joined Palmer and Son Limited in 1986 with a BSc. from the now nonexistent Otago School of Mines was appointed general manager in 2002 and he continues in that role, located at the Logan Point Quarry, which overlooks the spectacular and controversial Forsyth Barr Stadium.

This has led to an upgrade of the plant at Blackhead and a general upgrade of the plant at every facility. However, Blackhead Quarries Limited has stuck to its last—it still concentrates on providing high grade aggregate to local authorities and contractors in the South.

Quarrying started at Blackhead in the 1950’s and is now producing around 120,000 tonnes per year.

Products range from general AP materials to high quality M4 roadbases, concrete aggregate, blasting sand, sealing chips and railway ballast.

Blackhead is a promontory of black basalt situated on the coast approximately 5km south east of Dunedin City’s St Clair Beach.

Composed of volcanic basalt it was formed about 10 million years ago during the third eruptive phase of the Dunedin volcanic complex.

Columnar jointing on the basalt was formed during this cooling and this produced regular sided columns helping the crushing process.

The high quality resource is used to produce top end products i.e. M4 roadbase, concrete aggregates and sealing chips. To assure anything produced at the Blackhead Quarry meets specification there is an onsite laboratory. The entire operation is externally audited for quality assurance to ISO 9001-2000.

Blackhead Quarry has a covenant; put in place in 1990, to protect unique rock formations at sea level. Blackhead has 0.7 hectares of settling ponds for water treatment. Dust is controlled throughout the plant by the use of water sprays and dust deposited at the boundary is monitored monthly.

The Logan Point Quarry near Dunedin - with mobile crusher operating.

The quarry was the winner of the 1995 Nissan Diesel Environmental Award and the 1996 winner of the Winstone Safety Award. Rock is won by drill and blast with a pattern of 2.7m x 3.3m x 10m bench heights.

A 30-tonne excavator is used to load a 10 cubic metre rock truck to transport rock to the primary crusher. A 20-tonne loader is also used on the face for general tidy up, road maintenance and load out duties.

Quarried rock is tipped into a 70 tonne hopper and fed to a Nordberg 40 x 30 single toggle jaw crusher which feeds to a 6000 tonne surge pile.

An Allis H4000 cone crusher then crushes the rock to 65mm with a screen taking out roadbases; the oversize then feeds a No. I Kumbee for railway ballast production. Any overrun goes to a surge pile to feed a Barmac 9600 duopactor used to produce sealing chips, concrete aggregates and sand.

The plant is highly mechanised with video monitoring from the weighbridge. A 20 tonne front end loader handles sales from the stock pile with everything sold over a 13m computerised weighbridge.

The company employs 37 people at its four major plants and a surprising number of them have membership in the company’s 25-Year club

and five of the staff followed their fathers into positions with Palmer and Son Limited. Indeed some members of staff are in the third generation of a family that has worked for the company.

Tony Hunter says the company has survived and flourished because it sticks to what it knows.

It also ensures it knows what is happening in the industry in the terms of politics and in new types of plant.

While he acknowledges that while most machines in the quarrying industry still are engaged in the same tasks in which they have always been involved, much of the new technology is bigger and more efficient.

To this end Hunter is a very active and interested board member of the Aggregate and Quarry Association of New Zealand.

He believes that through this position he keeps his own company informed of what is happening at the sharp end of the industry.

Unlike some companies in the quarrying and mining industry in New Zealand, Blackhead Quarries Limited has welcomed legislation relating to health and safety on its sites.

Hunter says his company has always seen this as a major concern in the industry. He says the staff are well-informed on health and safety issues.

Indeed, the company has delegated the formulation and promulgation of such issue s to the staff members out there in the quarry.

He points out that they are the people who would be injured or killed in an accident. They know where the risks lie and formulate health and safety rules to safeguard everyone.

Another area where Blackhead Quarries Limited is different is in its attitude to the provisions of the Resource Management Act. Hunter says the company believes quarrying and mining and environmental issues are irrevocably entwined.

He says the days of strip mining are long gone and that quarrying and mining companies must realise this and harmonise their operations with the environment.

This attitude of Blackhead Quarries is wellknown in Dunedin. It was a major factor in the granting of a resource consent extension for Logan Point Quarry which is situated not far from the heart of Dunedin and close to many residential properties.

Indeed, Tony Hunter chairs the board of a 350ha eco-sanctuary near Waitati. In this sanctuary there are 50 New Zealand Saddlebacks—the only ones currently found in the South Island.

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