An Australian exploration company says it has found the beginnings of what could be a one million ounce gold deposit in the hills west of Dunedin, and it has put a headline figure of about $4 billion on the metal it believes is sitting in the ground.
New Age Exploration, which trades on the Australian Securities Exchange under the code NAE, told investors this week that drilling at its Bella prospect had turned up shear-hosted gold for the first time at its Lammerlaw project, roughly 70km west of Dunedin near Lake Mahinerangi. In a statement to the market, the company said the mineralisation had “all the hallmarks of a Macraes-type system”, a reference to the Macraes operation in East Otago, which is the largest gold mine in the country.
The standout drill hole, labelled LAMRC015, returned 24 metres grading 1.66 grams of gold per tonne from 54 metres down the hole, according to the company’s announcement reported by RNZ. That was part of a 15-hole programme totalling just over 1,050 metres of reverse circulation and diamond drilling. Chief executive Kirby Johnson said the company was still “only a few drill holes in”, but early indications suggested the deposit could run more than five kilometres along strike and be up to 100 metres thick.
Mr Johnson told the Otago Daily Times that hitting thick intercepts of good grade gold strengthened the comparison with Macraes. “Because we’ve hit good grades of gold, high-grade gold, and thick intercepts, then that makes the analogy even stronger to Macraes,” he said. He described the geology as mirroring the Macraes system but dipping the opposite way, in effect a repeat of the same structure on the southern side of a major fault.
The $4 billion number needs to be read with care. It is what miners call an in-ground metal value, worked out by multiplying a target of one million ounces by a gold price now sitting around US$4000 an ounce. It is not a measure of profit, and it is not the same as gold that can actually be dug up and sold. A large share of any deposit is left in the ground or lost in processing, and the cost of building and running a mine can run to hundreds of millions of dollars before a single ounce is poured. The million ounce figure is a target the company is chasing, not a resource it has proven. Assay results from the current drilling are still coming back through the middle of the year.
What makes Lammerlaw more than a simple gold story is the mix of metals in the rock. Alongside gold, the ground carries antimony, tungsten and arsenic. Antimony in particular has become a metal governments pay close attention to, because it is used in ammunition, flame retardants and some battery and solar technology, and because China controls most of the world’s supply and has tightened exports. That puts a small Otago exploration permit into the same conversation the New Zealand government has been having about critical minerals, after it recently backed two West Coast processing plants aimed at reducing reliance on Chinese supply. The company has named one of its four prospects Antimony, sitting alongside Bella, Fulton’s and Bucks.
The project is a long way from becoming a mine. New Age Exploration holds an exploration permit rather than a mining permit, and Mr Johnson has said the company is several years away from even applying to dig. More drilling is planned for the coming summer to test how far the trend extends. On its own reckoning the company is around four to five years behind Santana Minerals, the other Australian outfit chasing a much larger Central Otago gold deposit at Bendigo-Ophir, which is now working through the government’s fast-track approvals process with a decision expected later in the year.
New Age Exploration has signalled it would probably use the same fast-track route if its find lives up to the early promise, and it says it favours an underground mine with a smaller surface footprint rather than the sprawling open pits proposed elsewhere. The company points out the land around Lammerlaw is marginal farm country with no houses, wineries or tourism operators nearby, which it argues makes it a less contentious place to dig than the vineyards and lifestyle blocks closer to Queenstown, where Santana’s open-cast plan has drawn strong opposition from residents and public figures.
For Otago, the discovery lands on a region with a long mining memory. The Bella prospect sits next to a historic gold mine worked more than a century ago, during the gold rushes that first drew people to Central Otago and the Dunedin hinterland. Whether this modern chapter turns into jobs and royalties, or joins the long list of promising drill results that never became mines, will depend on many more holes, firm resource numbers and a permitting path that could take the rest of the decade.
For now, investors reacted to the news and locals inland from Dunedin have a new name to get used to. The gold, if it is really there in the quantities the company hopes, has waited a few hundred million years already. It can wait a little longer while the drill rigs do their work.
What do you make of another Australian company chasing gold in Otago, and does the antimony angle change how you see it? Have your say in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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