Partner for Heritage

Press, 19 July 1989, Page 35

Partner for Heritage

PA Wellington The listed gold miner, Heritage Mining, is stepping up its activity on the Coromandel Peninsula by bringing in the West Australian mining company, Forsayth, as a partner.

The two companies have finalised a $2.75 million joint venture, which Heritage hopes will see it become an active miner in the area. A director of Heritage, Ms Peta Semmens, said yesterday it was hoped the joint venture would find a “feasible” mine, earnings from which would lift the company into the black. Although Heritage controls most of Coromandel’s former major producing mines and is the largest holder of prospecting licences in the region, it has not yet produced any gold. In its three years of operation, the company has spent S3M on exploration. As an explorer only, Heritage has not generated any income, posting a $93,194 loss for its first seven months of operation, and following that with a $246,545 loss for the year ended March 31, 1988. Its annual result in the latest March year is also expected to be a loss.

Under the agreement with the subsidiary company, Forsayth New -Zealand, Forsayth will fund all the joint venture’s exploration and evaluation in the Coromandel Peninsula for at least two years. Heritage, which is also listed on the Australian Stock Exchange, will manage the joint venture during exploration wh.de Forsayth will act as manager during the mining. The chairman of Heritage, Mr Peter Atkinson, said in a statement the agreement was a - major step towards the company’s aim of becoming an active gold miner in that area. It was subject to statutory consent and covered all Heri.tage’s licences and interests in the Coromandel. The state of New Zealand’s economy, a lack of business confidence and uncertainty over the Government’s policies had meant the company could not raise capital in New Zealand, he said. . “Attracting investment is always a difficult problem for a company of our size and it was impossible to generate any interest within New Zealand,” Mr Atkinson said. Forsayth is based in Perth and holds major stakes in a number of Australian mining companies operating successful mines. It manages and controls 50 per

cent of a gold mine at Mount Gibson, in Western Australia. The milling capacity at Mount Gibson has been estimated at I.IM tonnes a year, with reserves of 5M tonnes. Exploration over the IOOOsq km holding resulted in the discovery of a further mine, Midway North, hailed as one of 1987’s most significant West Australian finds. Forsayth had been drawn to invest in New Zealand by “the enormous potential and relatively unexplored nature of the Coromandel,” the chairman, Mr John Morris, said in a statement announcing the joint venture. The company viewed its investment in New Zealand as significant, he said. Forsayth’s decision had also been influenced by Heritage’s technical expertise and exploration licences, and also the results of its three years of exploration. The. Australian company will pay Heritage $750,000 as partial repayment for exploration work already completed and has also agreed to spend at least SIM towards exploration costs on the Coromandel. The companies said Forsayth will also fund all exploration and evaluation of the joint venture area until a mining licence is lodged with the Energy Ministry. Once permission to mine has been granted, expenses and earnings will be shared by the companies. A recent quarterly report from Heritage showed it spent $322,514 on exploration in the three months ended March 31 and expected to spend $450,000 during the June quarter. Ms Semmens said exploration cost the company SIM last year. While most of that was spent on Coromandel licences, two in joint ventures, Heritage also had interests in Central Otago and Nelson. A diamond drilling programme had been completed at Heritage’s Kapanga project just out of Coromandel township, she said. Several new mineralised zones had been discovered during drilling and the results had confirmed individual zones were up to 30m thick, the statement said.