Ron Cunneen1 & Ian Levy2
Australia was built on gold and from 1850 until 1950, most of the gold came from reef orebodies in the historic goldfields of Eastern Australia. The old timers did not mine out all of the gold; why then are most of these goldfields lying dormant?
Huge quantities of gold remain unmined and largely unexplored because exploring and reopening historical goldfields is a business activity that generally does not suit today’s capital market requirements.
If we discover gold in these historic goldfields, it is often nuggetty and difficult to quantify prior to actual mining. This added uncertainty makes fund-raising for exploration in old goldfields very difficult.
Life and labour was cheap when the historical goldfields were being mined. Consequently, mining was labour-intensive and focussed on narrow-vein, high-grade orebodies. Modern mining is focussed on ore types that are conducive to mechanised mining and in general, the mining of -vein orebodies are unsuited to mechanisation. This technology-shift has also added to the difficulties of fund-raising for redevelopment of old goldfields.
The Gympie Goldfield was the first profitable redevelopment of an eastern Australian historical goldfield and reasons for its success include:
1. The entire goldfield and surrounding prospective
ground was owned by one company, Gympie Eldorado Gold Pty Ltd, a wholly-owned
subsidiary of public listed Gympie Gold Limited.
2. The city of Gympie and surrounding Cooloola Shire is proud of its gold mining heritage and is strongly pro-development.
3. Major gold companies Freeport and BHP invested the high-risk funds for the initial exploration from 1980 until 1991.
4. Major gold company BHP Gold invested the risk funds for the initial reopening of part of the goldfield and then departed the field in 1991.
5. Small-medium gold company, Gympie Gold Limited reassessed the historic data and the modern data and concluded that a viable gold mining business could be created by a careful investment of time and limited money:
· Investing a modest amount of capital to commence production;
· Investing in geological knowledge to enhance discovery rates over time;
· Reinvesting cashflows to build the business by discovery and development. The Gympie operation became a self-funding exploration play.
· Developing an integrated exploration continuum from mine exploration through to regional exploration. Exploration must have no demarcation between mine and non-mine activities.
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