BLAYNEY mayor Scott Ferguson is confident a gold mine near Millthorpe will go ahead despite the Perth-based mining company, in charge of the project, announcing plans were on hold.
An announcement to the Australian Stock Exchange by Regis Resources this week said the company would not proceed with a feasibility study for the McPhillamys project at Kings Plains “in the near term”.
The company’s management had previously said it hoped to have the project, which was eight kilometres north-east of Blayney and 35 kilometres south-east of Orange, up and running in 2016 and it would employ around 150 people.
But due to the drop in the gold price, in excess of 20 per cent since 2012, Regis Resources will not progress the project.
Cr Ferguson said he was not disappointed about the announcement , nor was it unexpected.
“I’ve spoken with them and they’ve been very optimistic it will proceed,” he said.
“It just suits them to shelve it for the moment.”
There were “a number” of other projects in the pipeline for Blayney that had the potential to create up to 400 jobs in the near future and the mine was just one of many, Cr Ferguson said. He could not provide details of the projects yet because Blayney Shire Council was still in negotiation with stakeholders.
Regis Resources said the project remained “viable at this time” with the current gold price but the company decided the potential return on investment did not meet its “hurdle rate at this time”.
“The company will however continue to undertake cost effective work on the project with a view to being in the best possible position to expedite development if and when circumstances permit,” it said in a statement.
With the project on hold, council will have an opportunity to re-zone land for residential purposes to account for the influx of future jobs with a hope those employees will call Blayney home, according to Cr Ferguson.