3D Resources bought the Adelong mine and begins drilling as gold price hit decade high levels
The new owner of a gold mine on the NSW South-West (New South Wales, Australia) slopes is confident it will become profitable for the first time in more than 70 years.
3D Resources bought the Adelong mine out of receivership in May and began drilling this week.
Attempts to mine at the site have been made several times, most recently by the previous owner in 2016.
Managing director Peter Mitchell said he was confident the mine would be profitable this time.
The beauty of this project is this has actually got development consent to mine, so it is actually essentially an operating mine that is on care and maintenance, he said.
The mine reopens as the gold price reaches highs not seen in almost a decade.
The previous record was post the global financial crisis in 2011, when we saw the gold price hit $1,920 per ounce, resource analyst Gavin Wendt said. But in recent times, it’s been as high as round about $2,050 per ounce.
Mr Wendt said the Adelong acquisition was part of a broader trend.
A lot of the [mines] that are coming to market now are actually old exploration players, perhaps gold mines that were operated in the old days, maybe early 19th century, where there was a lot of high-grade gold mined, he said.
The miners weren’t able to get to it at the time due to their limited technology, or indeed the exploration techniques at the time didn’t allow that gold to be found, he said.
Around 26 tonnes of the metal was found at the Adelong goldfield from its discovery in the 1850s until the last miners left in the 1940s.
Since the 1970s, exploration has been undertaken but no commercial mining has succeeded.
Mr Mitchell said the most recent attempt had not failed due to poor quality or lack of gold, but rather due to issues with mining equipment at the site.
The actual ore itself is very amenable to treatment, but unfortunately the plant [the previous owners] built wasn’t very suitable, he said.
Mr Wendt said geological surveying in the past five years had shown “untapped potential” for gold and copper mining in NSW. There’s obviously been high-grade gold mined there in the past, but the question now needs to be asked: How much gold could potentially be there, and how would it be mined?
I’m not quite sure of how much they’re looking to raise, but [the company] probably need a minimum of $3 million to $4 million to kick the whole process off, he said.
Mr Mitchell said commercial production was some time away and changes to the site and equipment would require regulatory approvals which could take months.
But he said he was “keen to get [the] project on the road again”.
He said, we’ve only had it for two months, but we’ve started with a bang and hopefully we can get things going.