Gold producer OceanaGold has unveiled the results of its Waihi District prefeasibility study (PFS), highlighting the economic and operational prospects for its existing operations and the proposed Wharekirauponga Underground Mine (WUG) in New Zealand.

The PFS projects a 15-year mine life for the Waihi District, encompassing the current Martha Underground Mine (MUG) and WUG. Combined, the mines are expected to produce 1.6-million ounces of payable gold at an average all-in sustaining cost (AISC) of $994/oz. Notably, the WUG operation alone is forecast to achieve an average AISC of $634/oz, demonstrating its potential as a high-margin asset.

The study indicates robust project economics, with an after-tax net present value (NPV) of $621-million at a gold price of $2 400/oz and an internal rate of return (IRR) of 24%. At a more conservative gold price of $1 750/oz, the after-tax NPV is estimated at $138-million, with a 9.2% IRR.

“This PFS is a major milestone for OceanaGold and the Waihi operation,” stated OceanaGold president and CEO Gerard Bond.

“We plan to safely and responsibly develop the WUG, which extends the life of the Waihi operation to at least 2038, while generating strong returns for our shareholders and wider economic benefits for local communities and New Zealand.”

Production from MUG, which has been operational since 2019, is anticipated to continue until 2033, at which point operations will transition to WUG. First ore from WUG is expected in 2032, with commercial production commencing the following year. The company has approved an early-works capital budget of $40-million to $45-million for design and construction activities in 2025, pending permitting approvals.

The WUG initial mineral reserve stands at 4.1-million tonnes at a grade of 9.2 g/t, containing 1.2-million ounces of gold. Combined with MUG, the district’s total mineral reserve is 8.5-million tonnes grading 6.4 g/t gold for a total of 1.7-million ounces of gold.

Additionally, the WUG offers significant exploration upside, with approximately 400 000 oz of inferred resources. Drilling planned for 2025 aims to further delineate the EG Vein Zone, where high-grade mineralisation has been identified 270 m beyond current resource boundaries.

The total non-sustaining capital investment for the district is estimated at $556-million over an eight-year period, funding mine development, process plant expansion, water treatment upgrades, and tailings storage facility construction. Sustainability measures, including the use of two ventilation shafts within the Coromandel Forest Park, have been incorporated into the project’s design.

Located about 140 km south-east of Auckland, the Waihi District has historically produced more than eight-million ounces of gold.