Gold mineralisation at Macraes occurs as late quartz-carbonate veins within a body of sheared and hydrothermally altered Otago Schist, the Intrashear Schist. The alteration is characterised by the presence of rutile and the absence of epidote and titanite, indicative of an alteration fluid containing >10 mol per cent CO2. In areas of high strain, a fabric of black microshears develops, gradational to mylonitic cataclasite in the high strain zone adjacent to the hanging wall of the duplex shear zone. The microshears contain hydrothermal graphite, inferred to have been deposited from a methane-rich fluid. The mylonitic cataclasite is characterised by abundant pyrite, the absence of albite and extreme grain size reduction. Gold recovery in the CIL processing plant at Macraes can drop to 50 per cent or lower for some unfavourable ore types. Preg-robbing by a component in the ore, possibly graphite, was suspected as the cause. Mylonitic cataclasite was identified as the lithology responsible for the poor recoveries, with the capacity to bind about 30 ppm of gold in the leach tanks. A program of detailed geochemistry and quantitative grain-size measurement using Coulter analysis was undertaken to identify specific mineralogical factors associated with preg-robbing. The results indicate that pyrite, graphite, and extreme grain-size reduction are the factors associated with highly preg-robbing ores at Macraes. The evolution of the mylonitic cataclasite is accompanied by strong potassium enrichment, as muscovite, and depletion in sodium as albite is removed. This suggests that a simple powder XRD ratio of the albite to illite peaks would suffice to distinguish the preg-robbing ore for grade-control purposes.