New alluvial gold mine likely to be partly running in Millers Flat by October

Another mining company is going for gold in Central Otago, with hopes an alluvial gold mine will be a boon for the business and local communities.

The appeal process for the Millers Flat mine lapsed earlier this month and Hawkeswood Mining expected to have the mine partly running by the end of next month.

But it has been far from smooth sailing - it took more than two years to get consents and an abatement notice was issued when they started mining before the consents were approved.

On the banks of the Clutha River, over the iconic blue bridge, sits the small Millers Flat community that is home to less than 200 people and a now newly consented alluvial gold mine.

Peter MacDougall, who moved to Millers Flat in the 1970s, said the town stagnated for years under the threat of flooding from a dam proposed nearby.

"Noone wanted to build here because you didn't know what the future was, but that's gone and there's been some subdivisions and new housing here," MacDougall said.

He believed the new mine would be great for the community, bringing more jobs and families to town.

"Hawkeswood, they've come into the community, they've sponsored different events, and that's good," he said.

"It's a family business. You're dealing with New Zealand family that are gold mining. You can go and talk to the owner. You can go and talk to the foreman.

"You're not dealing with an overseas company that's hiding behind a PR firm based out of Auckland."

He was happy with the work that had been done to mitigate the mine's impacts on its neighbours.

"We've got a stock water bore within 250 metres of the boundary of the mine, and I don't think that when they dewater when they're down there mining that it will affect our bore at all."

Millers Flat resident Graeme Young said he would not have moved here six years ago if he had known a mine would be built just over the road, and was concerned what it might mean for property prices and any ability to sell.

He was worried how close the mine was to the river and the town's water supply.

"I'm not certain that the water investigations have been robust and I'm not entirely satisfied that it won't have an impact on our river and I'm hoping it won't impact our community bore," Young said.

He wanted the country to be focusing on reducing our emissions, not building more gold mines.

He was concerned about the state of the Clutha River before mining was on the cards.

"I think that our environment has got quite enough to deal with without any potential discharge from an open cast mine," he said.

"We know by the number of waterways that are flipping in New Zealand that our system and particularly the (Resource Management Act) has failed in its duty of care to protect our water. I'm not confident that the system is foolproof."

Hawkeswood Mining operations manager Simon Johnstone said they had no chemical processes and none of their mine pit water would be discharged into the Clutha River.

Instead it would go into settling ponds to be cleaned before going back to the ground.

"There's literally no chance of us putting anything back into the Clutha River whatsoever. I can't reiterate that enough. There is not a chance that we're going to affect any of the water bores for the township," he said.

He hoped to have some staff trained and the dredge running within six weeks.

Ideally, most of the roughly 25 workers would be local.

"If we can't employ majority locals then, we would like to employ families that can move to the area whilst we operate here and bring their children to the local schools, help out with the communities, play rugby for the rugby teams. I see this as a really fantastic opportunity to boost Millers Flat up a wee bit," he said.

It is unclear what the mine will mean for the local economy - in its resource consent submissions, the company predicted it would add roughly $28 million in wages and royalty payments over the life of the mine.

The commissioners found no evidence to substantiate that figure, but said there would be flow on effects.

He expected minimal disruptions to the community from noise, dust or lights.

"We've managed to put magnificent systems in place that will prevent any actual impact on anyone in the area. We believe we've done a really, really fantastic job with the help of all our experts designing the systems to prevent any issues in town," Johnstone.

As for concerns about lowering property prices, he believed the company had likely increased values after purchasing properties nearby.

Their doors were open if anyone had any concerns, he said.

The company planned to put up a viewing platform for people to be able to safely view the mine, he said.

Teviot Valley Community Board deputy chair Mark Jessop hoped to see new families in the community and a more vibrant town.

"That will be good for the school, because the school is ... they're fine at the moment, but if they lose more than about three or four more children then they go below the threshold and they lose a teacher, which would be disastrous. So potentially this could be good," he said.

He knew of at least one household who had chosen to sell rather than live near the mine.

In Ettrick, Benger Garden Cafe & Chalets owner Leandro Massariolo believed the mine would be good for the area.

"I think going to bring some new people to the area. They're going to be for some time. I heard (they've) got a few good projects where they're going to give back to the community so I think we're all going to get some benefits from it," he said.

Simon Johnstone said they were looking forward to being a part of the community and he had not ruled out trying to extend the project in the future.

They are not expecting to find any gold nuggets.

"A large teaspoon of gold is an ounce of fine gold and that is what we're recovering here is nothing more than just fine flakes, almost smaller than a quarter of a grain of rice probably. Tiny, tiny wee flakes," he said.

How it works

On the site, a large dredge sits over a mine pit that looks like a small lake.

The dredge operated in the bottom few metres of wash gravel, with a large bucket scooping gravel into a hopper that feeds the gravel across a vibrating platform with 36 millimetre holes.

The holes mean anything larger moves straight over the back of the belt and the other material goes onto another platform which filters out larger material.

That leftover slurry made up of gold, sand, minerals and fine gravel falls into a bin at the bottom before being pumped up to the roof of the dredge and into a cyclone that removes most of the water, splitting the remainder onto 12 jigs.

The gold and black sands are separated from the light sands with water being pumped into the base to push larger stones and lighter sands into a waste chute.

This separation process happened twice before the reconcentrated slurry was pumped up to a last splitter and onto three streaming down, gold tables that have a special mats to capture the gold.

If any gold slips past, it is then captured in a high speed centrifuge.

What is left is a slurry of gold and black sand and other heavy minerals, which is taken away off site, processed and poured into bars before being sold off.