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Victoria prepares for a new gold rush
Source: MELBOURNE, July 22 AAP
Published: July 22 2005, 09:43AM

In the 1850s thousands flocked to Victoria's goldfields, fortunes were made overnight and ramshackle settlements were transformed into proud cities.

Now, 150 years later, a new generation of miners are returning to the state's historic goldfields to dig deep for the treasures the old-timers left behind.

The CSIRO estimates there are 5,000 tonnes of gold still in the ground in Victoria, twice what has been extracted to date. advertisement

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At the famous gold rush towns of Ballarat and Bendigo and at sites across the goldfields, mining companies are identifying resources and moving towards production.

Perseverance Corporation recently opened its Fosterville mine, located on a site 20 kilometres east of Bendigo which was mined between 1894 and 1903.

The mine is expected to produce up to 120,000 ounces of gold per year, twice the gold previously mined each year in Victoria, for eight years or more.

And the other two biggest players in the second coming, Ballarat Goldfields NL and Bendigo Mining Ltd, are both moving closer to bringing their historic tenements back into production, digging deep beneath the old mine sites.

Bendigo Mining managing director Doug Buerger says historical data from the intense prospecting carried out during the gold rush has been an invaluable resource for the company in developing its geological model.

"Most of it actually comes from the archives of the (Bendigo) Advertiser, because the paper was started in 1853 and that's when reef mining started," he says.

"Mine managers used to put fairly detailed reports out and investors in the share market used them to make decisions about where they were going to invest their money."

Bendigo Mining and Ballarat Goldfield's geological models show there are potentially gold-bearing quartz reefs repeating at regular intervals below the reefs that have already been mined.

Few mines in the past went deeper than 700 metres, with water flooding in from interconnected shafts one of the main constraints.

But modern pumping techniques can deal with the water and at Bendigo the plan is now to dig down to 1,500 metres.

Paterson Securities resources analyst Hayden Bairstow has been underground at both Bendigo and Ballarat and says their geological models appear sound.

He says there has been a lot of interest in the mines from overseas but a lot more scepticism from Australian investors.

Still, more and more miners are exploring on the old goldfields and Mr Bairstow says if either Ballarat or Bendigo prove it can be done, it will set off a new wave of exploration and development.

"If they can get into production and produce some profit then the unbelievers will probably slowly turn around and that would spark a whole lot of new investment because there is a lot of gold there," he said.

"The potential for it to become a major producing area is, I think, pretty high if they get them all off the ground."

If the next gold rush does materialise it could be a fillip for regional Victorian centres.

Ballarat Goldfields plans to begin producing gold by the end of the year and says it will employ about 200 people when in full production.

Bendigo Mining employs 140 at its mine site and says it expects that to increase to 200 next year and to 550 when it is in full production.

At present 65 per cent of Bendigo's current employees are local.

Local historian James Lurk says people in Bendigo have welcomed the project.

Mr Lurk says the city is very aware of its mining heritage and many people can still trace their lineage back to old miners.

And although the last mine in Bendigo closed in 1954, there are still a few ageing miners around who have formed the Old Miners' Club.

Mr Lurk said they had toured the mine site and were impressed with the advances in technology that had been made since their day.

But as one old miner pointed out, one thing at least will be the same about the new Victorian gold rush.

"No matter what you do underground," he said, "it's still bloody dark down there."

By Alex Wilson