OceanaGold, which operates the Macraes goldfield in Otago, posted a first-half profit as its Didipio operation in the Philippines helped lift first-quarter earnings to a record, making up for a small loss in the second quarter blamed on higher New Zealand costs and weaker sales.
Net profit was US$56.8 million in the six months ended June 30, from a loss of US$63 million a year-earlier which included some of 2013's US$193.3 million of impairments against its New Zealand assets, the Melbourne-based company said. Sales rose to US$297.8 million from US$226.9 million a year earlier, it said.
The mining company achieved a profit of US$58.9 million in the first three months of the year as production from Didipio came onstream, lifting sales by 78 per cent. In the second quarter, sales fell 2.7 per cent to US$127 million and were eclipsed by cost of sales, depreciation and amortisation, and other expenses amounting to about US$129 million.
OceanaGold attributed the second-quarter loss to "lower revenue from lower overall sales and higher costs in New Zealand due to a higher New Zealand dollar and a drawdown of inventory and gold-in-circuit".
"We had a strong start to the first half of the year with free cash flow generation of US$71 million including US$22 million in the second quarter despite a lower quarter for production," said chief executive Mick Wilkes.
The company was on track to achieve its 2014 guidance, he said.
The company's shares closed down 45c, or 11.5 per cent, yesterday at $3.45 and have surged about 128 per cent this year. In that time the spot price of gold has gained about 16 per cent.
Total production in the first half was 147,399 ounces of gold and 11,185 tonnes of copper including 60,831 ounces of gold and 4706 tonnes of copper in the second quarter.