Tender Opens For Minerals Exploration In Central Volcanic Zone

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The governments second competitive minerals tender, New Zealand Epithermal Gold 2013, opened today.

The tender for exploration permits is open to companies interested in exploring for metallic minerals over 8,040.3 square kilometres of the Central Volcanic Zone, located across the Bay of Plenty and Waikato regions of the North Island. The area is known to contain epithermal style gold and silver deposits in both extinct and active geothermal fields.

Land listed as unavailable for mining under Schedule 4 of the Crown Minerals Act is automatically excluded from the tender. It also excludes areas of significance and sensitivity to iwi and hap?, including that around the Rotorua Lakes, Mokoia Island, the Hinehopu, Lake Rotoiti and Lake ?k?taina Scenic Reserve, as well as Rotorua City and Taupo township.

The government wants to manage any interest in minerals exploration, strategically, says David Binnie, General Manager of New Zealand Petroleum & Minerals, a branch of the Ministry of Business, Innovation and Employment.

The competitive tender process is a fair and effective way to do this. It is not a financial bidding process. A bid has to outline how the company proposes to explore the area over the period covered by the permit. Our evaluation ensures that only the most capable operators are granted exploration permits and the opportunity to carry out responsible exploration activities.

Only through the investment of the exploration companies is it possible to identify whether there are economically viable minerals deposits. Exploration is the first step in a long process that eventually may or may not lead to mining activity. However, there are potential benefits for local and regional economies of exploration and mining activities.

The launch of New Zealand Epithermal Gold 2013 follows consultation with 99 affected iwi and hap? and 13 local authorities between 26 March and 19 July 2013. Twenty-two submissions were received by New Zealand Petroleum and Minerals to the proposal, with the feedback helping shape the make-up of the final tender area.

The government is committed to ongoing engagement with iwi and ensuring that wahi tapu are respected, says Mr Binnie. As part of this we encourage information sharing with iwi for the protection of cultural sites. The terms and conditions of the tender also require permit holders to engage with iwi and to report back to NZP&M annually.

Companies interested in exploring for minerals have until January 2014 to submit staged exploration work programme bids. Under the terms of the tender process a company may apply for more than one permit in the tender area, with the size of any one permit limited to 7,500 hectares.

New Zealand Petroleum & Minerals evaluate the bids across a number of criteria including the applicants proposed work programme, technical and financial capability, iwi engagement strategy, risk management and health and safety and environmental practices. NZP&M expects to grant exploration permits, which will be issued under the new Crown Minerals Act, in May 2014 for an initial five-year period.

More information is available at: http://www.nzpam.govt.nz/cms/minerals/competitive-tender/2013/epithermal-gold-2013

Background

A minerals competitive tender involves a number of steps:
1. Iwi and local authority consultation to seek feedback on a tender proposal.

2. The tender when companies provide a work programme based bid to explore in a certain area; companies can put in multiple bids.

3. Evaluation of bids undertaken by New Zealand Petroleum & Minerals, it includes a rigorous assessment of all bids against the criteria, terms and conditions of the tender.

4. Award of exploration permits.

If successful, a company will be awarded an exploration permit for five years but this may be extended for a period up to, but not exceeding, 10 years from the commencement date of the permit.

An exploration permit gives the permit holder the exclusive right to explore minerals over the area specified in the permit only. It does not give the permit holder holder automatic access to the land this must be negotiated with the landholder (who could be a council or private landowner).

Companies must meet strict health and safety obligations and any environmental requirements set by a regional authority under the Resource Management Act consenting process.

Exploration activities typically include land based and aerial surveys, geological mapping, geochemical sampling of rocks, and exploratory drilling. This work helps to build understanding of the geology of the permit area and to identify mineral deposits. Any discoveries are then evaluated for their commercial feasibility. Exploratory drilling would proceed on a small footprint within an exploration permit area.

An exploration permit does not include mining rights any company that wishes to start mining will have to apply for a new permit and meet additional health and safety and environmental requirements. A mining permit is awarded for a much smaller land area than an exploration permit, with the actual mine footprint at any one time is much smaller again.

The minerals sector in New Zealand contributes around $20 million each year in government royalties and over $1.1 billion to the New Zealand economy. This goes towards funding of public services including health, education and roading.

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