It was more than 150 years ago when New Zealand's first gold nuggets were discovered - in a sifting pan on the banks of Coromandel's Kapanga Creek. The year was 1852, and at the time New Zealand was experiencing its first major influx of European settlers.

It was the discovery of gold in the South Island that led to a series of gold rushes and the establishment of what soon became a major industry. The 1860s saw several true gold rushes to Central Otago, Marlborough and the West Coast. New Zealand's population doubled as immigrant prospectors came from China, Asia, Great Britain and Australia. Recorded gold production in 1866 reached 735,000 ounces (more than 22 tonnes), a level that has not been exceeded since then.

The early miners used primitive equipment, gold pans and sluice boxes with the gold-bearing gravel being shovelled by hand. Hydraulic methods using high-pressure water were developed to work elevated terrace deposits and water races were built over long distances, often through rough terrain, to convey water to the mine sites. As the more accessible, near-surface deposits were worked, attention turned to the largegravel deposits along the main rivers, particularly the Clutha River in Otago.

After numerous unsuccessful attempts, the first steam powered dredges started work on the Clutha River in 1881. The world's first commercially successful gold dredge was the Dunedin, which continued to operate in the Clutha River until 1901 by which time it had recovered 17,000 ounces (528 kg) of gold.

Hard rock gold mining took longer to get established, requiring capital and expertise beyond the capacity of the alluvial miners. Gold production from quartz vein deposits commenced in the early 1860s with rock crushing batteries being set up to crush the gold-bearing rocks to enable the gold to be recovered.