OceanaGold turns profit around

Last updated 11:46 31/07/2014

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Gold and copper miner OceanaGold Corporation has posted a first-half profit of US$56.8 million (NZ$66.9m), a US$120m turnaround from last year's first-half loss.

The company slashed its assets value by US$85.5m in the second half last year and booked a loss of US$63.4m for the six months to June 30, 2013.

The 2014 interim profit was earned from revenue of US$298m, 31 per cent higher than the previous half's US$227m.

The falling price of gold forced last year's writedown of assets on the goldminer, whose main operations are two open-cut goldmines and an underground mine at Macraes in Central Otago and at Reefton on the West Coast, and a gold and copper mine at Didipio in the Philippines.

The US$56.8m 2014 interim profit includes a second-quarter loss of US$2.1m.

OceanaGold said lower production in the second quarter had been signalled because of mine sequencing, where lower-grade ore was being mined and processed at Didipio and in New Zealand.

The company is sticking with its guidance of lower gold production this year - between 275,000 and 305,000 ounces - and 21,000 to 24,000 tonnes of copper.

Last year's record production was 325,732 ounces of gold.

A year ago, the company announced a shorter mine life for its New Zealand operations, driven by the slump in gold prices.

It said then that it would place the Reefton goldmine in "care and maintenance" next year.

The Macraes open pit had a life until 2017 and the Frasers underground mine until mid-2015.

It said today that a revised mine plan at Reefton would result in a "slight increase in the life of the mine".

In the second half of this year, production at Macraes was expected to be similar to the second quarter.

There would be a reduced rate of mining and processing of a higher amount of low-grade stockpile to supplement the mill feed.

A new plan at Macraes would bring forward the mining of Coronation pit.

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