Major gold find in Nelson points to a potential yield worth up to $12 billion

According to ASX filings, gold at the Sams Creek prospect in the Takaka region of Nelson may yield at least 1 million ounces.

At today's market values, that is almost NZ$2 billion.

Sams Creek is 25 kilometres from Takaka in the Cobb Valley, and is on conservation land outside the Kahurangi National Park. It has been known as New Zealand's biggest undeveloped gold project.

MOD Resources has confirmed that their latest exploratory drilling program has confirmed at least 1.024 million ounces, an increase of one third of previously proven reserves.

However, there is likely to by considerably more gold than this.

The Sams Creek project area has been divided into a number of exploration prospects, including Riordans, Western Outcrops, Doyles, South Eastern Traverse, Main Zone and Anvil.

To date, only the Main Zone prospect has been systematically explored - and this covers only 800m section of the total prospect, which is less than 15% of the known strike length.

If gold was confirmed at the same rate over the whole prospect, it could be worth in excess of NZ$12 billion at current prices on a yield of about 193 tonnes.

The Sams Creek permit covers more than 30km² and is owned by OceanaGold Corporation.  Oceana holds a current resource consent and access arrangement for Sams Creek. However it has given MOD Resources an 80% share in return for their prospecting work.

The Sams Creek exploration program marks a return to the New Zealand gold scene for MOD Chairman Miles Kennedy, more than two decades after the Perth mining entrepreneur founded Macraes Mining.  The assets of Macraes Mining now form part of OceanaGold, which is New Zealand’s largest gold mining company.

New Zealand Minerals Industry Association chief executive Doug Gordon said the announcement represented the transformation of a mineral potential into an actual known resource reserve.

"This is exactly what the industry foresaw as part of our country's mineral potential prior to the Government's mineral stock take in 2010 – and it's not on Schedule 4 lands. So from that political perspective, one of many to be considered, the resource is mineable."

The local Forest and Bird Society spokesperson was not enthusiastic about the mining prospect, emphasising that it would be "incredibly hard" to extract, according to a report by Stuff.co.nz.

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