VANCOUVER — New Zealand hosts intriguing mineralogy when it comes to epithermal gold–silver systems, and newly minted Antipodes Gold (TSXV: AXG; US-OTC: GELGD) is taking advantage of the near-term production potential of its Wharekirauponga (WKP) joint venture, which is near Newmont Mining’s (TSX: NMC; NYSE: NEM) Waihi gold operations on the North Island.
Antipodes changed its name from Glass Earth Gold and rolled back its shares 10 to one, but kept its eyes fixed on New Zealand’s gold potential.
According to chairman Adrian Fleming — who worked with Underworld Resources when Kinross Gold (TSX: K; NYSE: KGC) snapped up the Yukon-focused junior for US$140 million — Antipodes’ new direction was a necessity.
“We had a number of different projects based in New Zealand, including some placer operations. Those really never made us any money, and the tactic almost caused the company to go broke since they never worked properly,” Fleming says in a phone interview.
“The operation was down in the South Island, and the fine-grained gold and grades were a little lower than you ideally would need to make money. We shut that down and turned over the projects we had in the vehicle other than WKP, which was initially the company’s permit operated under a joint venture with Newmont,” he adds.
Antipodes signed the Hauraki joint venture — named after the project’s location — with Newmont in 2007, which saw the major earn a 65% stake.
In the past six years Newmont has finished 15 diamond drill holes, as well as surface mapping and geophysics. A small, high-grade gold resource has been delineated at the T-Stream vein, which hosts 1.3 million inferred tonnes grading 6.2 grams gold per tonne for 260,000 contained oz., at a 3 gram gold cut-off grade.
To implement its new strategy, Antipodes brought in president and CEO Thomas Rabone, a national New Zealander with 10 years of experience in commercial law and operations management in the region.
Rabone recounts during an interview that he has been involved with the Antipodes group for two years, during which time the outfit earmarked WKP as an asset that could help build the company, assuming a joint venture with Newmont is renegotiated.
“We recently announced the breakthrough in the joint venture. Newmont had previously been quite happy to self-finance the exploration, but that has definitely changed,” Rabone says. “We’re not going to be shy about saying the endgame is supplying mill feed to the Waihi mining operations. We have a great working relationship with Newmont, where we’ll operate as the explorer and they’ll operate as the miner. They will have extra capacity coming up at the plant in the next few years, and we see a clear demand for high-grade ore that we can supply.”
In mid-March the agreement was renegotiated to grant Antipodes management control at WKP, and the right to increase its stake there to 51% by sole-funding exploration and technical programs. Newmont retains the right to reclaim its reduced stake at a cost multiple of three times Antipodes’ expenditures.
Newmont’s mining operations lie 10 km southeast of WKP in the town of Waihi on the east coast of New Zealand’s North Island, 110 km southeast of Auckland.
WKP and other deposits in the region are viewed as low-sulphidation epithermal gold systems characterized by quartz vein, breccia and stockwork mineralization.
“Looking at the long section in regards to drilling, it is interesting to note what Newmont was doing here. WKP is a big system and they’ve done a lot of deep drill holes, and not too many shallow drill holes,” Fleming notes. “I think they were looking to try to define the total size of the resource. It’s unlikely you’d be allowed to develop a big open pit here, and we were a bit puzzled as to why Newmont was not focusing on the high-grade mineralization. The best high grade is in the T-Stream vein, but that only has around a dozen deep holes.”
Newmont is moving away from open-pit mining at Waihi, and recently began underground operations, 200 metres below the town. Both Fleming and Rabone wager the mill will need more feed in the next four to six years.
Newmont has identified broader, disseminated gold mineralization at WKP outside its vein structures, including at the NE vein stockwork, where drills cut 151 metres grading 1.2 grams gold in hole 26. But Antipodes’ focus will be its T-Stream program, along with reinterpreting Newmont’s existing data.
“We see T-Stream as only being the start of the story, but it is enough of a story to represent a potential mine that could be added to the Waihi system. That being said, if you look at WKP as a system itself, it is within a large area of hydrothermal alteration and it’s under explored,” Rabone adds. “The biggest piece of evidence is that every hole that’s been drilled at the project by the joint venture so far has returned either great values, or interesting questions.”
Antipodes will narrow its sights on T-Stream with a proposed US$4-million exploration program that includes a 5,000 diamond-drill program, as well as metallurgical, environmental and economic studies over the next 15 months. Rabone says the company has established the strategy on the project despite “anomalous, high-grade areas of interest on the periphery.”
This includes the Western zone, where drills cut 3.2 metres grading 20.3 grams gold and 18 grams silver from 216 metres depth in hole 29.
Controlled source audio-magnetotelluric surveys have helped exploration across WKP’s 47.5 sq. km property package, highlighting rhyolite host silification and broad gold–silver mineralization. Margins of resistive features have also proven useful in targeting vein-fault interpreted controlling structures resulting in frequent higher-grade gold intercepts.
“The geophysical surveying has been rigorous and highly useful, and proven to have a good correlation with the discoveries,” Rabone says. “We’d like to do some metallurgy, mapping and scoping. Our focus over the next year — aside from the drilling — will be a thorough desktop review from a good mix of geologists so we can ask: ‘Where’s the next ten bagger in the area, and where is the structure that’s responsible for these deposits?’ I think that’s going to be an exciting inquiry.”
Antipodes will be in fundraising mode over the next few months, as it aims to get the drills turning at WKP by June. The company hopes to keep receiving investor support via its Toronto listing, and nurture a good local relationship by including New Zealanders in financing by way of the national stock exchange.
Antipodes shares closed at 3.5¢ at press time and maintains 10.6 million shares outstanding for a $370,000 market capitalization.