OceanaGold's Haile mine in South Carolina has been valued at A$1.3 billion ($1.34b) with expectations it's on target to pour first gold by December.
So far OceanaGold has spent US$246 million ($336m) on the project, with US$134m to go before formal commissioning early next year and 10m tonne of ore mined to date.
Analysts for Craigs Investment Partners visited the United States site recently, highlighting that the project remained on time and budget for pouring its first gold in December, operational capabilities on site were adding value and recent test drilling success showed "considerable" positives for exploration.
Craigs broker Peter McIntyre said Haile was now valued at A$1.3b, which included an underground mining operation at the mine, which had been pushed out from a five-year mine life to 11 years.
"Oceana has committed to a US$14m, 40,000m drilling programme across South Carolina this year, with the majority spent at Haile. We think this budget could be revised up, given the recent drilling success," McIntyre said.
OceanaGold's share price closed up 1.11 per cent yesterday at $4.55 but McIntyre retained a 12-month target price of $3.90, and a sell recommendation.
"Oceana's share price has run ahead of where the gold spot price is," McIntyre said.
OceanaGold was a high-quality business with growth and improving cash flow as the Haile ramped up toward production, but using Craig's gold price forecasts, the stock was expensive, he said.
OceanaGold chief executive Mick Wilkes was at the annual Denver gold forum this week.
Wilkes said the Macraes mine in East Otago and Waihi in the central North Island both had lives beyond 2020, while Didipio in the northern Philippines and Haile had lives beyond 2030.
OceanaGold was the most profitable gold mine in Canada; with shares trading in Canada, for both calendar 2014 and 2015, Wilkes said.
From 2017-20, Haile is forecast to deliver 150,000 ounces of gold annually, and beyond 2020 that is expected to rise to 250,000 oz.
McIntyre said OceanaGold was using its experience from the Didipio gold-copper mine, where it is mining a pit, but headed underground, to remove risk and optimise construction of the Haile project. Mining had begun in the Mill Zone pit, with up to nine smaller pits planned, but there was also potential for all pits to be joined under a super-pit design, McIntyre said.
A revised technical report was expected from OceanaGold in the middle of next year following an optimisation study to incorporate the planned underground mining operation, he said.