Canadian Lynx Platinum wins South Island platinum exploration tender

Taranaki oil and gas explorer Tag Oil, of Canada, is expanding into the New Zealand minerals sector through its 49 percent ownership of a listed Canadian explorer, Coronado Resources, which has been awarded New Zealand five mineral exploration permits to hunt for platinum in the South Island.

Coronado subsidiary Lynx Platinum, was the only company awarded metallic minerals exploration licences in the government's New Zealand Platinum Tender 2013.

Of the five exploratory permits awarded, three cover 355 square kilometers east of Murchison, part of the Crown-owned conservation estate, with the remaining two covering a 168 sqkm area north of Invercargill. Each permit lasts for five years and allows the company to explore for metallic minerals. Lynx Platinum was the only company granted permits and will have to reapply for a mining permit if it makes any "economic discovery", minister of energy and resources Simon Bridges said in a statement.

"Lynx will spend around $3 million over the first three years, and this could rise to $7.5 million within five years if the initial work is successful," Bridges said. "It is encouraging to see a new minerals operator enter the New Zealand market, especially when the international price of metallic mineral commodities is low and investors are understandably selective about where in the world they put their money."

New Zealand's mineral sector contributes $1 billion to the economy in gross domestic product, Bridges said.

Coronado also wholly owns Opunake Hydro in Taranaki and is in turn 49 percent owned by Canadian miner TAG Oil, which has had considerable success with commercial onshore oil and gas discoveries in the Taranaki region, and holds oil and gas exploration permits on the East Coast and Canterbury.

The five permits awarded today allow Lynx to explore for gold, silver, copper, and aluminium but the focus is on platinum group metals, as the locations are "highly prospective" for those metals, a Ministry of Business, Innovation and Education spokesperson said. New Zealand hasn't had any mining of platinum before, apart from small scale alluvial production of platinum in the late 19th and early 20th century in Southland, he said.

Lynx Platinum will still need to negotiate access with landholders and in the case of conservation land must meet criteria set out by the Department of Conservation. Depending on the council they may also need to apply for resource consent.

The government has been running competitive block offer tenders since 2012, reserving prospective areas of land for companies to win the right to explore. A 419 sq km area at Grey River on the West Coast, 1700 sq km block east of Nelson and 730 sq km west of Murchison had also been offered in the platinum tender.

The tender ran from March last year in consultation with iwi, the Department of Conservation and local authorities and closed in April.

(BusinessDesk)