The Macraes deposit is an example of an orogenic style gold deposit. This style of deposit is recognized to be broadly synchronous with deformation, metamorphism, and magmatism during lithospheric-scale continental-margin orogeny (Groves et al., 1998). Most orogenic gold deposits like Macraes occur in greenschist facies rocks. The Macraes deposit falls into the mesozonal category with mineralization having occurred near to the brittle-ductile transition at about 300°C.

The mineralization at Macraes is principally developed within the gently northeast dipping HMSZ, though anomalous grades are also recorded in narrow, steeply dipping quartz veins locally occurring in the hangingwall schists, collectively known as the Eastern Lodes. Mining to date has occurred along a continuous strike length of 6km in numerous staged open pits, three smaller discrete satellite pits immediately to the north, and at Golden Bar, approximately 7km to the south.

Within the shear zone, mineralization is constrained between the Hangingwall Shear and the Footwall Fault. Schists above the Hangingwall Shear and below the Footwall Fault are barren. Economic mineralization is typically restricted to the upper part of the HMSZ. The Hangingwall Shear, which varies from 1m to >30m in thickness contains the most continuous and consistent mineralization. This zone is locally underlain by extensive but low grade stockwork zones which may be developed over a width of up to 100m.

Higher grade zones of mineralization within the shear zone form tabular shoots that may have strike lengths of >300m and extend up to 800m down-dip (i.e. Frasers and Round Hill). These zones are observed to trend towards the north, oblique to the shear zone dip direction. This orientation is interpreted to be due to the interaction of the HMSZ with folds within the host schist units, creating a preferred lineation direction for mineralization.

Mineralization distribution is broadly consistent along the HMSZ but shows considerable variability in grade, width, continuity and geometry at mine-scale. This variability is attributed to the local development of the HMSZ structure during mineralization and the influence of host rock lithology, particularly with respect to competency contrasts.

The following four types of mineralization occur within the HMSZ at Macraes (Mitchell et al., 2006):
• Mineralized schist. This style of mineralizati on involved hydrothermal replacement of schist minerals with disseminated sulphides and microcrystalline quartz. Mineralization was accompanied by only minor deformation.
• Black sheared schist. This type of schist is pervaded by cm to mm scale anastamosing fine graphite and sulphide bearing microshears. This type of mineralization is typically proximal to the Hangingwall Shear. Scheelite mineralization occurs in the silicified cataclastic shears.
• Shear-parallel quartz veins. These veins lie within and/or adjacent to the black sheared schist, and have generally been deformed with the associated shears. The veins locally cross cut the foliation in the host schist at low to moderate angles. Veins are mainly massive quartz, with some internal lamination and localized brecciation. Sulphide minerals are scattered through the quartz, aligned along laminae and stylolitic seams. These veins range from 1cm to >2m. . Scheelite mineralization is associated with quartz veining in some areas.
• Stockworks. These veins occur in localized swarms that are confined to the Intrashear Schist. Individual swarms range from c. 100 to 2000 m2 in area and consist of numerous (10 - 100) subparallel veins. Most of these veins formed subperpendicular to the shallow east dipping shear fabric of the Intrashear Schist. Stockwork veins are typically traceable for 1 5m vertically with most filling fractures that are 5 – 10cm thick, but can be up to 1m thick. Swarms of stockwork veins within the Intrashear Schist were lithologically controlled by the dimensions and locations of more competent pods of Intrashear Schist.

Gold is closely associated with pyrite and arsenopyrite in all of the above styles of mineralization. Rarely free gold up to 300µm occurs in quartz veins, but most gold occurs as 1-10µm scale blebs hosted in and near sulphide grains (Angus, 1993).

Scheelite mineralization is associated with gold mineralization and quartz veining and displays complex crosscutting relationships. McKeag (1987) documented its occurrence in at least three veining generations.

OPEN PIT:
Mining to date at Macraes has come from eleven pits comprising, from north to south, Coronation, Deepdell North, Deepdell South, Golden Point, Northwest Pit, Round Hill, Southern Pit, Innes Mills, Innes Mills West, Frasers, Golden Ridge and Golden Bar. Current operations are in Innes Mills West and FRIM. The Round Hill, Innes Mills and Southern pits were mined to what were considered to be their economic limits. Round Hill and Innes Mills pits were subsequently backfilled, and Southern Pit was used for tailings disposal. Following updated geologic interpretation and economic analysis, as part of its ongoing program to convert Mineral Resources to Reserves at Macraes, the Company added these deposits back to its Mineral Resources and only Round Hill and Southern pit to Reserves.

The bulk of the future open pit tonnage from Macraes will be sourced from the Frasers, Coronation North, Coronation and Round Hill deposits.

Mineralisation has also been outlined to the north at the Nunns/NZGT, Longdale, Mt Highlay and Mareburn deposits, and to the south at the Taylors, Wilsons, Shaws and Ounce deposits. Further drilling programs are required to upgrade these deposits.

Open pit mining at Macraes is carried out by Company personnel using leased mining equipment. Ore concentration is carried out at the Macraes site by Company personnel. A standard refining contract is in place for the transportation and refining of the doré bullion into fine gold.

The current life of mine (“LOM”) plan for the Macraes open pit is three years. Based on the current drilling program, it is possible the Company will extend the LOM plan if additional Mineral Reserves are defined in the interim.

UNDERGROUND:
The Company commissioned the Frasers underground mine in January 2008, and is now mining via a decline from the current open pit operations. The underground operation produces ore at approximately 900,000 tpa.

The underground retreat long-hole open stope (RLHOS) mining operation utilises electric hydraulic development jumbos, diesel load-haul dump units, diesel haul trucks and a production drill rig to extract both waste and ore. The retreat stope voids are not backfilled, instead the mine design utilises yielding pillars between adjacent extracted stopes to gradually deform over a timeframe that permits ore extraction.

The Macraes Process Plant recovers gold by concentrating the metal into a relatively small fraction of flotation concentrate, oxidising the reground concentrate in a pressure oxidation autoclave, washing the oxidised residue and then utilising a carbon-in-leach process to recover gold from the residue.

In detail the plant comprises:
• two single stage jaw crushing circuits, which reduce the ore to a top size of approximately 200mm; the products from these two circuits are directly fed to the two SAG mills and an emergency feeder on the conveyor system feeding the higher capacity circuit provides continuity of feed to the grinding circuit if the jaw crusher feed is interrupted;
• a complex grinding circuit to reduce the particle size of the ore to 80% passing 140 µm; the original, higher capacity crushing circuit feeds a 2,300kW SAG mill and the new crushing circuit feeds a 1,500kW SAG mill; discharge from the two SAG mills are directed to two separate cyclone clusters, the underflow from which is fed to the flash flotation section or two parallel ball mills (2,300kW and 2,500kW); ball mill discharge is directed to the larger of the cyclone clusters;
• the flash flotation circuit, comprising both roughing and cleaning, on the circulating load of the grinding circuit, to recover as much of the sulphide minerals, and consequently the gold, at as coarse a size as possible;
• a main primary flotation circuit comprising tank cells and trough-style cells to maximise gold recovery to flotation concentrate; a cleaner flotation circuit controls to the sulphur grade of the concentrate to optimise the performance of the following pressure oxidation circuit;
• regrinding of the flotation concentrate in a 900kW ball mill to 80% passing 15 µm improves pressure oxidation kinetics; limestone is added to the regrind circuit feed to control net acid generation in the pressure oxidation circuit;
• washing and thickening of the reground flotation concentrate in a high rate thickener to control the level of chloride ion in the liquor fed to the pressure oxidation circuit;
• repulping and treatment of Reefton concentrate through a 450kW IsaMill, generating an 80% passing 20 µm sized product;
• pressure oxidation in a 77 m3 autoclave at 3,150kPa and 225°C to achieve greater than 75% oxidation of the sulphide component of the Macraes concentrate; oxygen is supplied to the autoclaves from a cryogenic plant operated by BOC;
• pressure oxidation through the autoclave of Reefton concentrate at the same operating conditions as for Macraes concentrate, targeting greater than 88% oxidation;
• Macraes and Reefton concentrates treated separately, excess concentrate from either source results in a proportion of Macraes concentrate being sent to CIL unoxidised as direct leach (due to the higher recoveries achievable on unoxidised Macraes concentrate compared to unoxidised Reefton concentrate);
• washing of the oxidised residue from the pressure oxidation (POX) process to separate the acid liquor generated by the oxidation;
• further neutralisation of the acid liquor using flotation tailings and lime;
• leaching of gold from the POX residue using cyanide in a CIL circuit that uses kerosene and high activated carbon concentrations to control preg-robbing by the carbonaceous component in the ore;
• destruction of the cyanide in the CIL tailings using the INCO process, with sodium metabisulphite as a source of sulphur dioxide (SO2); and
• recovery of gold from the loaded carbon using a normal elution and single pass electrowinning circuit, followed by smelting to produce gold bullion.

The POX plant uses technology that minimises formation of gold chloride complexes in the autoclave. Formation of these soluble complexes in the presence of active carbon can result in preg-robbing prior to contact of the oxidised residue with cyanide. Washing the concentrate with water in a thickener controls chloride levels in the flotation concentrate pulp. The acidity of the autoclave pulp is controlled by the addition of limestone to the regrind. The sulphur oxidation was designed to about 97% of the total sulphide present but more recently test work has indicated that reduction in the level of oxidation to greater than 75% has enabled increased gold extractions in CIL to be achieved by increased throughput through the autoclave. The CIL and elution processes recover the gold into a concentrated solution from where the precious metal is recovered through electrowinning, with final smelting of the electrowinning cathodes into gold bullion.