Shares of Melbourne based mining group OceanaGold has risen 9.7 per cent in early NZX trading after announcing its gold production exceeded expectations in 2013.
The company produced 325,732 ounces of gold across its New Zealand and Philippines operations, slightly ahead the top of the range it had forecast of 285,000 to 325,000 ounces. It says its 2013 final quarter was a record, producing 115,219 ounces.
Its New Zealand operations in the three months to Dec 31, were 54 per cent above the previous quarter, producing a total of 87,506 ounces between the Reefton and Macraes mine. In the calendar year of 2013 New Zealand goldfields produced 259,455 ounces, the highest production of gold since 2010.
In the past 12 months the company's share price has dropped 37 per cent as it has battled against falling gold prices. The mining group is in the process of shifting its focus to its Philippines gold and copper operations, signalling its intention to scale down New Zealand operations. It will mothball its Reefton mine mid-next year and expects its Macraes goldfield in Otago to close by the end of 2017.
OceanaGold said it expected its 2014 gold production to range between 275,000 to 305,000 ounces because of its New Zealand wind down.
Gold prices have fallen some 26 per cent in the last year, from US$1685.14 an ounce to US$1240.25. the company.
At the time of its announcement of the New Zealand operations wind-down, the company also announced extra hedging for 208,000 ounces to partially cover production over the next two years at its Otago sites, ensuring it will get at least NZ$1,500 per ounce and no more than NZ$1,600 an ounce, effectively shielding it from further falls in gold prices from current levels.
The additional hedging runs from January this year though to December 2015.