Gold struck at New Zealand's deepest mine could be worth $2b

Gold has just been struck at New Zealand's deepest mine and the operators believe it could be worth $2 billion.

The Snowy River Mine on the West Coast is near a historic mine that was also known for its riches.

Around 850 metres deep into the ground near Ikamatua on the West Coast is an abundance of quartz reef.

"This is the prize at the end of the mine if you like," said Snowy River Mine general manager Lincoln Smith.

A prize - because for each red marking, that's where the gold is.

It's the first time gold has been struck at Snowy River Mine, right on schedule.

"We were pretty confident it was there and we're happy to see it," Smith said.

That's because nearby Blackwater Mine has also produced gold before.

"Gold was discovered there in early 1900s and the mine ran from about 1906 to 1951," Smith said.

Up to 750 ounces of gold was mined back then and the now-abandoned Waiuta township was abuzz.

This time the birthday reef is being mined about 3km beneath the old Blackwater mine workings.

"We're pretty much picking up where the old-timers finished up," Smith said.

And just at the right time, too.

"We're seeing record gold prices, way over $3000 an ounce, which is historically high," Development West Coast CEO Heath Milne said.

"We think we got 700,000 ounces there. Three sevens are 21 - that's $2.1 billion we got there," Smith said.

That value is attracting highly skilled workers to the area.

"They're not just going to dig up the gold and send it away, they're going to process it here, so there's a processing plant that's being consented here," Milne said.

Federation Mining is a major employer on the West Coast and 80 percent of its staff are local.

"We've spent nearly $70 million getting to where we are now, we've got 60 employees on now. That will grow over the next 12 months or so to 150 people on site," Smith said.

With a forecast of 70,000 ounces a year, the darkened path to Snowy River Mine will be glittering for years to come.