Oceana aims for record gold production

Oceana Gold opencast mine near Dunedin. Photo / Grant Bradley

Oceana Gold has tentatively forecast record gold production for the calendar year 2013, underpinned by its gold and copper development mine in the Philippines which is less than a year away from beginning production.

Oceana saw its share price undermined during the past fortnight by the decline in global spot gold prices which went below US$1600 to US$1573 on Friday.

Oceana's share price during the past seven trading days is down more than 18 per cent, having fallen from $3.38 to about $2.76 on Friday, with market capitalisation declining from $887 million to $724 million.

While Oceana has ramped up exploration funding, increased its resource estimates and is portraying confidence in the Didipio development, management is under pressure to deliver results to the market soon.

Oceana chief executive Mick Wilkes last week reiterated expectations of Oceana delivering 230,000-250,000 ounces of gold from New Zealand operations this year, but raised the production bar to 300,000-350,000 ounces for 2013, which would include about 70,000 ounces from the Philippines.

Crucial to operations and profitability, cash costs of production per ounce this calendar year are expected to be US$900-US$980 an ounce.

For 2013, with the Didipio operation under way, Wilkes said operating costs should move below US$500 an ounce. He remained confident Oceana could achieve a target of producing 600,000 ounces a year by 2016 from all operations.

- OTAGO DAILY TIMES