But that’s effectively what Vantage Goldfield's Mike McChesney did when he launched the emerging producer’s initial public offering this month, saying his company would be the first to use Australian-style decline techniques in a South African gold mine.

Vantage is an emerging gold producer and mineral explorer with interests in mineral rights covering more than 16,000 hectares in the Barberton Greenstone Belt of South Africa.

The company’s flagship Lily Project, which has mineral resources of 2.03 million ounces (22.3 million tonnes at 2.82 grams per tonne) including ore reserves of 480,000oz (4.8Mt at 3.09 grams per tonne), is a shallow operating underground mine.

It has produced, on average, just over 10,000 ounces of gold per annum over the past five years, and Vantage is seeking the funds to deepen the underground mine.

McChesney told MiningNews.net that the mine, when it’s built, won’t be a traditional South African shaft mine. The greenstone geology at Lily means the company has imported Australian expertise and intends to build a mechanised bulk mining operation modelled on Western Australian gold mines.

“South African gold mining has been dominated by mines in the Witwatersrand Basin, which has been mined for over 100 years – and while I wouldn’t say it’s mined out, it’s now very expensive to mine there,” he said.

Witwatersrand Basin reefs are mined through deep shafts, some nearly 4km below the surface.

“Our mines, by contrast, are in a greenstone belt much as you have in Western Australia,” he said.

Lily started as an open pit, which exhausted its economic viability at 140m, and Vantage now intends to extend the current shallow decline to a fully fledged underground bulk mining operation.

The deposit extends at least 2000m along strike and 500m at depth. Inferred resources to at least 700m below surface are considered to be economically mineable, according to Vantage, which completed a bankable feasibility study in 2008, with updates in August 2009 and early this year.

Vantage anticipates ramping up to full production of 35,000 ounces per annum from 2011, if it is able to close its current $30 million IPO to fund the expansion of its operations.

McChesney said the planned mine at Lily is something of a departure for the South African mining sector, with even its near greenstone neighbours using older shaft designs.

“Our neighbours, Pan African Resources, have old mines that have been mining continuously for more than 100 years. They’re designed the old-fashioned way with vertical shafts that are down around 1500 metres – we’ll only go down 500 metres in the next 13 years,” he said.

“So they’re limited in the tonnage they can extract from the shaft mines, similar to the shaft mines in the Witwatersrand system.”

McChesney told MNN that only two other mining operations are considering Australian-style declines, even in the greenstone belt, with the rest of the sector still opting for traditional shaft designs.

He said Vantage expects that to change, however, when the benefits of bulk mining declines become more widely apparent in South Africa.

“We’ll have a workforce of around a quarter of neighbouring mines, with around 300 people. We’ll be doing a similar tonnage to them when we’re at full production, but they have about 1600 people working their mines.”

And that means production costs should be lower, with costs projected to be around $US480/oz (assuming an exchange rate of $US1:8 ZAR).

And what do other South African miners think of Vantage’s plans to shift to an Australian-style operation?

“It’s interesting. We’ve had no derogatory comments, which we were sort of expecting, nobody telling us that we’re idiots and we’ve got it all wrong,” he said.

“I don’t know what they’re secretly thinking, but I suspect that many of them are envious, because they don’t have the opportunity that we have to make a shallow, bulk-minable mine.

“And I think we’ll see a lot more of these type of mines in the greenstone belt in South Africa in years to come.”

The IPO

The company launched its IPO early in April, seeking to issue 75 million shares at 40c to raise $30 million to fund its expansion plans.

If the offer is fully subscribed, Vantage will have 223.5 million shares on issue, valuing the company at around $89.4 million when it begins trading on the Australian Securities Exchange in May.

Vantage currently owns 85% of the Lily project, which will eventually be diluted down to 74% under South African laws which force companies to take on black economic empowerment corporations as partners in their operations.

The company also has a number of other assets, including the Barbrook project, another existing shallow underground mine (closed in 2006 by its previous owners).

Barbrook has “extensive surface and underground infrastructure”, according to Vantage, and mineral resources of 2Moz (11.2 million tonnes at 5.56 grams per tonne), and Vantage has begun a bankable feasibility study to consider reopening the mine.

The offer opened in early April and closes on May 8, with Vantage expected to begin trading on the ASX by May 19.