Miner plans stake in N.Z.

Press, 11 June 1987, Page 27

Miner plans stake in N.Z.

Western Gulf Oil and Mining, Ltd, the Mel-bourne-based listed miner, has announced it will invest $500,000 in gold production in New Zealand.

The company’s managing director, Dr Len Walker, said that Western Gulf had agreed to buy a number of licences and licence applications near Cromwell, in Central Otago. The agreement required approval from the Overseas Investment Commission. Western Gulf had also bought an alluvial plant, which is recovering gold from one of the leases for $385,000 subject to the agreement. The plant was designed to handle about 150 cu m of gravel an hour.

The company would take over running the plant and expected to establish a cash flow within a short period.

From information available gold production of 5000 oz a year was expected. Western Gulf was com-

mitted to spending at least $200,000 in exploring in the first year on the 2100 ha licence area.

Given the past and present mining history of Central Otago and after analysing the results of previous exploration work, the company was confident of large scale alluvial operations based on a potential resource exceeding 100 million tonnes, Dr Walker said.

The agreement with the current licencees, required Western Gulf to pay $300,000 on the granting of the transfers, plus $150,000 when mining reached IM cu m a year, or after three years, whichever occurred earlier.

A programme of sampling and,, laboratory studies, pilot plant testing and full scale testing using the purchased plant, would start immediately. Cash should come from existing trading within two months, and expansion on to other lease areas would be made as quickly as possible, Dr Walker said.