Nearly a million hectares of Otago farmland are now pegged by gold mining companies, in many cases without landowners knowing about it. NZ Petroleum and Minerals granted 163 new mineral permits nationally in 2025, a record, with gold hovering around NZ$8,600 per ounce. Capital is moving fast, the regulatory machine is scrambling to keep up, and the gap between what the gold sector promises and what it actually delivers to New Zealand remains wide open.
A $6 billion deposit with profit margins most sectors can only dream about
The centrepiece is Santana Minerals’ Bendigo-Ophir deposit in the Dunstan ranges, the biggest gold discovery in New Zealand in four decades with at least 1.24 million extractable ounces. The economics are extraordinary. Santana’s all-in sustaining cost sits at NZ$2,475 per ounce against a gold price of around NZ$8,200, delivering roughly 70% profit margins. Upfront build cost is $256 million with another $297 million to operate it over the mine’s life.
Santana projects the mine will generate $6 billion in revenue and more than $1 billion in taxes and royalties. Its economic impact study forecasts 506 jobs in the first year, an average of 350 per year at a median wage of $140,000, and $360 million annually in GDP. The company has applied for fast-track consenting, and its four proposed open pits include the Rise and Shine pit at 1km long, 800m wide, and 200m deep.
Santana is not alone. Hawkeswood Mining outlined expansion plans near Millers Flat in March, planning to grow from 15 engineers to 50 on-site staff. Owner Andrew Hawkeswood said gold prices, even after recent dips, remain high enough to make lower-grade ground viable. Matakanui Gold holds a 30-year mining permit over 3,265 hectares near Tarras plus exploration permits covering roughly 25,000 hectares of adjoining farmland. The IBISWorld industry report from mid-2025 valued the sector at $1.1 billion, growing at 8.2% annually.
The royalty gap nobody wants to talk about
Here is where the gold rush narrative collides with fiscal reality. Santana projects $448 million in royalties over 14 years. But in November 2024, analysis by The Spinoff found the government collected little more than $100 million in gold mining royalties across the entire 14 years to fiscal 2023/24. OceanaGold, the country’s dominant gold miner, paid no corporate income tax in 2021 or 2023 despite production worth hundreds of millions.
The Crown’s own numbers confirm the pattern. In 2022-23, minerals royalties, fees and levies totalled $235.8 million nationally, but minerals contributed just $21.6 million of that, with petroleum accounting for the rest. Against a billion-dollar industry, that is a thin return.
The government’s draft minerals strategy from May 2024 targets doubling mineral export values from $1 billion to $2 billion by 2035 and growing regional jobs from 5,000 to 7,000. The ambition is fine. The question is whether the royalty and tax architecture will capture any meaningful share of the upside, or whether the OceanaGold playbook simply scales up.
Boom economics have a shelf life
In November 2024, The Spinoff noted that gold prices rose 371% between 2001 and 2011 but fell 7% in the following decade. Lithium lost 90% of its value in two years after its 2022 peak. Commodity cycles are brutal, and building regional economies around extraction without capturing value during the boom years is a well-documented mistake.
Victoria University economist Geoff Bertram warned in late 2024 that “mining will not increase economic welfare – on the contrary, it will often reduce it – if done in the wrong place, or in the wrong way, or without a proper legal and regulatory framework”.
For business owners watching this, the lesson is not that gold mining is bad. A project with 70% margins, 350 jobs, and $360 million in annual GDP is a genuine economic asset for a region that needs one. The lesson is that New Zealand has a pattern of letting extractive industries operate at scale while collecting almost nothing in return. If the government is serious about its minerals strategy, the frameworks need to be in place before the gold leaves the ground, not after the commodity cycle turns and the profits have already flowed offshore.
Josie Vidal, chief executive of the New Zealand Minerals Council, said in March that “people have no need to panic” and that many permit holders are likely hobby miners. She may be right about the scale. But the capital flowing into Central Otago right now is not hobbyist money. It is serious investment chasing serious returns in a country that has not yet proven it knows how to keep its share.
Sources
- Newsroom: Farms pegged out from under owners’ feet in modern day gold rush (2026-02-25)
- The Spinoff: The debate over Central Otago’s enormous, controversial new gold mine, explained (2026-04-23)
- Newsroom: The billion-dollar gold mine under Central Otago (2026-03-04)
- ODT: Concerns aired as miner outlines expansion plans (2026-03-27)
- IBISWorld: Gold Ore Mining in New Zealand Industry Analysis (2025-07)
- The Spinoff: What can we really expect from an expanded mining industry? (2024-11-18)
- NZ Petroleum and Minerals: Annual minerals industry statistics (2024-11-29)