Miner OceanaGold's profits fall

MICHAEL DALY
Last updated 20:08 26/07/2012

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Gold miner OceanaGold Corporation, which operates mines in the South Island, reported a 5.5 per cent fall in half year revenue compared to a year ago, as sales fell and costs rose.

The Melbourne-based company said it made a net loss of US$3.1 million (NZ$3.9 million) in the half year to June, compared to a net profit of US$18.9 million a year earlier.

Revenue was down to US$175.3m for the latest half year from sales of 105,608 ounces of gold, while ebitda (earnings before interest, tax, depreciation and amortisation) fell 36.5 per cent to US$48.9m.

The fall in revenue was mainly due to a 16.3 per cent fall in gold sales, partly offset by a rise in the price received, the company said today.

Continued pressure on labour and input costs pushed up the cost of mining and processing.

OceanaGold's gold mining activities include an open pit mine near Reefton on the West Coast, and an open pit mine and the Frasers Underground mine in the Macraes Goldfield in Otago.

For just the second quarter, ebitda was US$25.6m, a 10 per cent increase on the previous quarter, as gold production rose 10 per cent over the first quarter to 55,709 ounces.

A second quarter improvement in the operating cash cost per ounce to US$1029, against US$1126 in the first quarter, was due to favourable foreign exchange rate movements and an increase in production.

The company invested US$3.9m on exploration during the quarter, including US$3.5m in this country where results were positive for the Blackwater Underground mine at Reefton, the Macraes Open Pit reserve and the Round Hill deposit at Macraes.

The gold and copper Didipio Project in the Philippines continued to progress with construction 70 per cent complete and on track for commissioning in the fourth quarter 2012.

“The New Zealand operations achieved good production improvement this quarter and remain on track to meet the full year guidance," OceanaGold chief executive Mick Wilkes said.

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