An international mining company is pushing to reopen a disused gold mine in the Queensland town of Gympie as it believes there is still a fortune lying in the ground.
Aurum Pacific, which controls multiple mining projects across Australia and the Pacific, bought the lease on the Eldorado gold mine from mining giant BHP seven years ago.
Chairman Michael Dodd said geological research suggested there was “still quite a large deposit [of gold] left in the Gympie mine”.
“There could still be a couple of million ounces,” Dodd said.
When BHP sold its shares to Aurum Pacific, Dodd said gold was trading at $300 an ounce.
The gold price has soared during the pandemic and was now valued at more than $2,000 an ounce.
Dodd said it cost around $800 to $1000 an ounce to mine gold, which was why the Eldorado mine could be hugely profitable.
“With the larger scope of the mine, we think it could be a 2–3 million ounce mine,” he said.
“And it would create up to 500 jobs the locals will be able to get into and they would be high-paying jobs.”
Local support needed
The mining company would first need the support of the Gympie Regional Council before it could go the State Government for consideration.
Gympie Mayor Glen Hartwig, who himself was once involved in mining, indicated support for the proposal.
“It would great for the mine to reopen,” Hartwig said.
“People need to understand, gold mining has been occurring in Gympie since Adam was a boy or James Nash rode through on a horse.
“It’s part of our culture and heritage.”
The town that saved Queensland
Gympie Gold Mining and Historical Museum historian, Allan Blackman, said Gympie became known as the “town that saved Queensland” after prospector James Nash found gold near the site of the current town hall.
Nash’s finding sparked the beginning of a gold rush that saved Queensland from bankruptcy.
Mr Blackman said the Eldorado mine was several kilometres south of town and was started about 100 years ago and then it was closed about a decade ago when gold mining was no longer profitable.
“Since the gold price has gone up, there has been a lot more interest in it,” he said.
Blackman was supportive of the mine reopening as it would create many jobs.
“The locals would like it,” he said.
“It used to employ 180 people, if it came back it could employ more.”
However, he said it would be difficult because the State Government had restricted mining close to a town
“This one is right on the edge of Gympie city, although has operated for many years without a problem,” Mr Blackman said.
No mining near towns?
The Queensland Government introduced the Resources Legislation Amendment Bill in August 2011 to create “urban restricted areas” which would prevent applications for mining and gas within two kilometres of urban areas, unless the local government gave consent.
Dodd said Gympie Regional Council had not applied for consent at the time, which was why the mining company was first seeking council support for its proposal.
“We need the support of the council to say to the State Government that the restriction should be removed,” Dodd said.
Hartwig said the proposal would need to go through a “raft of environmental approvals” before it got the final tick.
However, he said “mining in the 1980s was very different to 2020”.
“There have been massive advancements in mining,” Hartwig said.
“And Gympie has very stable ground.”
Dodd said the mining firm did a presentation with Gympie Regional Council staff about three weeks ago.
“The mayor and the CEO were willing to see me and discuss what the plans are to get the council on board to back the reopening of the mine,” he said.
Dodd understood the proposal would be discussed at the next council meeting.
“The council and community need to understand what we are going to do,” he said.
“It’s not open cut mining.”
The ABC has contacted the Department of Natural Resources, Energy and Mines for comment.
– ABC / Kathy Sundstrom and Rob Blackmore