Nov 18, 2013
After a troubled start to its calendar financial year, East Otago-based Oceana Gold is reaping benefits from cost savings and predicting a “strong finish” to the year, underpinned by better-than-expected copper production from ramping up its Philippines gold-copper mine.
The expected result should boost Oceana’s share price, which has been flagging during the year.
Oceana’s Didipio mine in the northern island of Luzon is far from the devastation left by Typhoon Haiyan in the central Philippines late last week, but the company sent its Didipio emergency response team to assist with recovery and had contributed to the Unicef Children’s Emergency Appeal, chief executive Mick Wilkes said in a market update.
Strong copper production growth at Didipio allowed Oceana to recently increase its guidance for calendar 2013, and the company expected about 2000 tonnes more than previously thought, bringing the total to 20,000 tonnes. Production from all gold operations was predicted at between 285,000 and 325,000 ounces. Copper sales offset the cost of gold production across the company’s operations, which was crucial to maintaining profit margins.
Wilkes said with global spot prices “under pressure” the company was pleased to have initiated a $100 million cost-saving scheme across New Zealand operations which achieved “significant reductions”.
Higher gold grades across all operations were underpinning a “strong quarter” to December, meaning strong cash flows, which would be used to pay debt of US$40 million. Otago Daily Times