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Tungsten-gold project mooted for Macraes

A possible tungsten-gold mine at the Macraes gold mine in east Otago is being investigated by OceanaGold. BY LINDSAY CLARK.

The mine is targeting the deeper sections of the Round Hill gold deposit where the modern Macraes mine had its beginnings in the 1980s, and is the latest wrinkle in developing the country’s largest gold mine as it moves into the last years of mining the resource.

Mining tungsten would be a new aspect for OceanaGold, but not new for the Macraes area. Historically tungsten in the form of scheelite was mined from underground mines from the Deep Dell hillside into Round Hill near where the current Macraes processing plant is sited.

Professor Dave Craw from the Otago University Geology Department estimates 1000 tons of scheelite was mined at Macraes, mostly during both World Wars and the Korean War in the 1950s. These were the times scheelite was also mined in the Glenorchy area of Lake Wakatipu.

Tungsten has the highest melting point of any metal (3422 degrees centigrade) and has the highest tensile strength. This made tungsten-blend steels tough and heat resistant for many weapons needed in wartime.

When modern era mineral exploration companies like Homestake and BP Minerals began investigating the Macraes deposit in the early 1980s they were focused on the tungsten potential.

But when gold prices suddenly shot up in the mid 1980s, the mining attention turned almost only to gold and it was the West Australian forerunners of OceanaGold that started the Macraes mine in 1990 and turned it into a five million ounce plus mine. Tungsten has since been barely mentioned.

Now OceanaGold is attempting to take advantage of recent higher prices for tungsten.

In 2013 the company began a programme of re-assaying assay pulps derived from the 25 years of drilling at Macraes. This work continued in 2014 and is expected to lead to an updated gold and tungsten resource estimate for Round Hill. A pre-feasibility study on the commercial production of a tungsten concentrate is planned, plus an initial assessment of other prospects with tungsten potential over OceanaGold’s permits covering 35 kilometres of the Hyde-Macraes Shear Zone.

Michael Holmes, the chief operating officer of OceanaGold, told the AusIMM New Zealand mineral conference in August that there is a real opportunity for the company to extract tungsten as a byproduct from Macraes.

He said the resource at depth at Round Hill contains about 1.26 million ounces of gold – though no tungsten resource size has been made public. However the gold and tungsten resource is “sterilised” by the current location of the process plant.

OceanaGold has floated the possibility of building a new, probably smaller processing plant nearby.

Holmes said: “We are looking at the possibility of building a new but relocated three million tonnes a year processing plant at Macraes which would have a tungsten/gold stream and a tungsten oxide (WO3) stream.”

Tungsten has a wide range of uses, mainly as an alloy where it imparts its qualities of hardness and heat resistance. A major use is for tungsten carbide drills and cutting tools for the oil and mining industry.

The metal is also used in military applications and for missile and rocket nozzles, which must resist high temperatures.

Tungsten is also widely used for hard tungsten steel alloys, for light bulb filaments, for electric and electronic contacts. In consumer products it can be found in TV sets, cell phones, the magnetrons used in microwaves, in jewellery – even in the small balls on the ends of ballpoint pens.

As something of a coincidence, Todd Corporation, the Wellington-based investment company of New Zealand’s wealthiest family, has recently made two significant international investments in tungsten projects in Canada and the UK. Todd, which has made much of its money through oil and gas investments in New Zealand, has established a minerals and coal arm operating mainly in the international market from a Sydney office.

Todd is the largest single shareholder in Northcliff’s new tungsten-molybdenum mine in New Brunswick, eastern Canada. The low-cost project is expected to take Canada into second place as a tungsten producer, after dominant supplier China.

Todd has also bought a one third stake in Perth-based Wolf Minerals which is developing the Hemerdon tungsten and tin project in Devon, which Wolf says is one the largest undeveloped tungsten and tin resources in the western world.

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