Oceana Gold Corporation's (OGC) Frasers underground (FRUG) transitioned into production in early 2008. The mine uses a relatively unique yielding pillars mining method that takes its lessons from empirical coal mining practices more so than hard rock techniques. Being a low-grade, flat-dipping resource hosted in the highly structured relatively weak Otago schist in central South Island in New Zealand, meant a number of iterations were undertaken to find the right mix of mining cost and resource extraction._x000D_
Mining is on the down dip extension of the active Frasers open pit at the Macraes site (that extracts the full shear zone package at a head grade of 1.5 g/t). The challenges for the FRUG feasibility study team was to deliver an net present value (NPV) positive operation that would exist as a coproduct with OGC's other New Zealand operations, allowing it to make use of the high throughput low cost refractory ore treatment facility._x000D_
Key factors in the successful project design were: Net capital costs kept to less than NZ$30 M by realising significant gold revenues from mine development from month four onwards._x000D_
Virtually eliminating waste development by putting all key capital infrastructure in the low-grade ore adjacent to panels and maintaining the option of extracting this resource on retreat from the mine._x000D_
Targeting a specific higher grade halo ore package within the entire mineralised shear zone._x000D_
Applying a mining method that accepted a higher degree of dilution, ore loss and resource loss (in yielding and non-yielding pillars) to the flat-dipping resource. Thus providing an acceptable margin per tonne and resource tonnes mix, as the resource could not support a conventional low-cost caving operation, nor a higher cost room and pillar or open stope and backfill operation._x000D_
2008 has seen increasing tonnes and grade performance with a corresponding decrease in cost per tonne and cost per ounce as the mine has reached nominal capacity and is producing an operating surplus. The challenge will be to maintain and improve.