Key Points:

Oceana Gold's cash-cow Macraes mine operation in East Otago is going through "tough times" to rectify a concerning fall in ore tonnage and gold production while its Philippines' copper and gold development comes under increasing scrutiny with a languishing share price.

The market capitalisation of the country's largest gold producer has plummeted 85 per cent from A$668 million to A$97 million ($844 million to $122 million) over 14-months, following restructuring and moving its principal listing to the Toronto Stock Exchange in June 2007 - making it ripe for a takeover play.

Its share price has been decimated, falling from the A$4.15 listing price to last Friday closing trading at A60c.

Oceana Gold chief executive Steve Orr has said Oceana was in negotiations for a partner in the Philippines and looking to raise US$185 million ($262 million). Costs for the Didipio gold and copper mine had blown out and doubled to US$320 million in May, followed by suspension of work in late-June as more funding was sought.

At Macraes, Oceana Gold management and the 500-strong workforce are understood to be at odds over proposed changes to working conditions at the East Otago gold mine, but management have rejected claims by some sources that it could be "crunch time" for the future of the 18-year-old old mine.

Vice-president of New Zealand operations John Kinyon said: "Yes. There have been delays and some tough times on several fronts. But there's no doubt in my mind we'll be here for life-of-mine [forecast till 2013]."

He confirmed staff had been briefed recently on proposed changes to combat the problems.

A senior mine employee, who spoke only on condition of anonymity, said many of the workers had not yet realised the seriousness of their predicament.

- OTAGO DAILY TIMES