Martha poised for expansion

Waihi, New Zealand — Tourists passing through this scenic community on the North Island are told that the most popular attraction is the Martha mine, a historic gold producer once known as Martha Hill. But the mine is so well disguised that most people can’t find it and end up driving around in circles until they are humbled enough to ask for directions to the small footpath and overlook that allows a bird’s-eye view of the open-pit operation.

Operator Waihi Gold Mining, a joint venture controlled 67.06% by Normandy Mining (NDY-T) and 32.94% by Otter Gold Mines, is justifiably proud of its showcase mine, which operates to the highest of environmental standards at the edge of town.

Since 1987, Martha has produced some 700,000 oz. gold and 4 million oz.

silver from an epithermal vein system. The higher-grade veins were previously worked by underground methods from 1880 to 1952 to a depth of 600 metres. During this period, production totalled 5 million oz. gold and 30 million oz. silver, respectable numbers by any standard.

“Martha Hill was the biggest mine in the Cormandel region, which is a world-class gold province,” said Keith Hay, mine geologist, during a recent site visit by The Northern Miner.

Hay went on to explain that gold mines in the Cormandel region were the first to use cyanide for processing. Cyanide was first used on a commercial scale in 1889 at the Crown battery at Karangahake, 12 km west of Waihi.

“That’s what made the mines in this area economic.”

Today, Martha is mining ore the old-timers would have discarded as waste.

While the current pit design remains focused on remnants and extensions of the Martha and Welcome veins previously mined by underground methods, it also encompasses stopefill material containing low-grade and spilled ore and low-grade ore (generally thin, sub-parallel veining) that was not economic to extract in the early days.

Mining is carried out by contract miners, with backhoe excavators and haul trucks, working from 2.5-metre benches. Because of the operation’s proximity to the town, mining takes place between 7 a.m. and 7 p.m. weekdays, and between 7 a.m. and 12 noon on Saturday. Before mining takes place, short holes are drilled on every other bench to probe for old workings. “We have maps, so we know where most of the old workings are,” Hay said.

Since the gold and silver mineralization is fine-grained and rarely visible, company geologists first do mapping and sampling for grade control within the pit. This is achieved by assays from 1-metre channel sampling along grid lines spaced 7.5 metres apart, with work focused on the Martha and Welcome veins (and intervening stockwork) together with their numerous branch veins.

The veins consist of bands of chalcedony interbanded with fine-grained crystalline quartz. Although generally oxidized, sulphides are present locally as very fine-grained pyrite with minor acanthite and electrum.

Contract miners employ relatively light blasting, so as to limit vibration effects. The old workings below the pit floor are dewatered by means of pumps that are housed in an old shaft. The miners then feed batches of ore and waste (from stripping) to a crushing and conveying system. The ore is transported by conveyor over 1.6 km to the treatment plant, while the waste is conveyed a further 0.7 km to a load-out station where it is used to build the tailings embankment.

.SExtension to 2007

The remaining reserves for the licensed pit design of 3.4 million tonnes at 3.2 grams gold and 33 grams silver per tonne are scheduled to be mined out by the year 2001. But during a tour of the mine, Resident Manager Tim Gosling said Martha still has plenty of life left. These days, his efforts are focused on getting approvals for an expansion program aimed at extending the mine life to the year 2007.

Martha currently produces about 82,000 oz. gold annually; the expansion is expected to boost annual production to 120,000 oz. Cash costs reported by Normandy for the year ended June 30 were A$273 per oz. (one Australian dollar is equivalent to US$1.34). Normandy’s profits at Martha (and at its other global operations) were enhanced by the benefits of an aggressive hedging program.

“We are looking at this extension as more of the same,'” Gosling said. “But the permitting process has been exhaustive, with little recognition of the standards already achieved in protecting the environment.”

The effort has nonetheless proved worthwhile, he added, as support for the mine has skyrocketed, compared with the low levels of acceptance when mining began. “In the early days, less than 30% of local residents were for the mine. Today, it is more like 70% in favor, with only a small number opposed.

That’s encouraging.”

The decision to expand operations was based on the fact that, during the first four years, production consistently exceeded the ore reserve prediction by as much as 50%. By 1995, resources were upgraded and technical investigations had progressed to the stage where a full feasibility study could be undertaken.

During the site visit, Hay said the continuity of the known mineralization is well-established. “It continues below the currently licensed pit design some 400 metres to the bottom of the old underground workings and beyond,” he explained. “It also extends to both the east and west along strike.”

.SDeeper pit

Recent work has identified a further economic resource of about 7.5 million tonnes grading 3.4 grams gold and 26 grams silver per tonne, access to which can be achieved by deepening the current open pit along the Martha vein. The pit was originally designed to reach a final depth of 150 metres; the proposed extension would deepen the pit to 210 metres. The stripping ratio would, in the early years of the expansion, increase from the present rate of less than 1-to-1.

Waihi Gold has also expressed an interest in acquiring exploration lands adjacent to the mine, as these may contain extensions of the known veins.

The ground is currently held by another company.

The proposed extension has three main components: a larger pit perimeter; construction of a second tailings storage dam; and increased capacity for water treatment.

In order to expand the pit, the crusher will have to be relocated to the east, and this, in turn, will require construction of an earthern noise barrier next to a distributor road. A second tailings storage facility is already licensed as part of the current project. However, because the facility will have to be made a bit larger than originally envisioned, approvals are required before construction can begin.

Gosling expects the approvals will be in hand by year-end and he remains optimstic that a positive decision will be made, based on the mine’s proven track record and widespread community support, particularly in light of the loss of jobs at the neighboring Golden Cross mine. “This support is based on a record of compliance and keeping the operation open to scrutiny.” The expansion, which has yet to be approved by the district and regional councils and the Ministry of Commerce, will also entail upgrading the ore treatment plant. Currently, the plant is capable of processing 930,000 tonnes per year for recoveries of 93% gold and 72% silver. Milling reduces 80% of the ore to 65 microns or smaller before being treated in a conventional carbon-in-pulp process.

Before capacity can be boosted to 1.25 million tonnes annually, some modifications are necessary, including: an improved classification circuit: installation of a pre-leach thickener; increased leach tank capacity; and increased power and electrowinning capacity to cope with higher silver production.

Waihi Gold Mining also has informed the local community and permitting authorities of its rehabilitation plans. Once mining ends, the pit will be filled with water to form a lake. A public park at one end will allow public access for recreational activities. The waste storage area will be returned to grass and native vegetation, with two wetland areas on top of the tailings storages.

The Martha mine directly employs 135 peop
le and, for each person directly employed, three more are employed indirectly in occupations servicing the mining industry and in downstream businesses. Of this total, 70% are local residents while 95% are New Zealanders. About NZ$4 million is spent at Waihi businesses, while around NZ$35 million per year is spent in the general region on goods and services.

Martha also is a popular tourist attraction. Every year, some 38,000 people visit the information centre built by Waihi Gold, and about half this number take guided tours through the open pit.

Within the community, Waihi Gold participates in special educational programs such as the Habitat Enhancement and Landscape Partnership (HELP).

The program introduces school-age children and community volunteers to the concept that rehabilitation work is an ongoing process and that mining is a temporary use of the land.