Oceanagold NZ gold production beats forecast

Last updated 15:36 22/01/2013

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OceanaGold Corporation kept production costs below its target last year by squeezing slightly more gold from its Kiwi mines than forecast.

The company's only gold production is from its New Zealand mines, but it also is commissioning a mine in the Philippines.

Macraes Flat mine in Otago - the country's largest gold producer - produced 58,872 ounces in the three months ended December 31, a 60 per cent increase on the third quarter due to higher grades and improved gold recovery, the company said in its fourth quarter report.

The Reefton gold field on the West Coast produced 17,872 ounces for the quarter, up 42 per cent.

The publicly listed goldminer made US$119 million ($142 million) in the fourth quarter from selling 69,761 ounces of gold at an average price of US$1705.

Cash costs for the quarter were US$638 per ounce, the report said.

The miner dug up 232,909 ounces of gold for the year - down 7 per cent from the previous year.

It produced 230,119 of those ounces at an average cash cost of US$940 an ounce, below the expected costs of between US$1000 and US$1050 an ounce.

OceanaGold managing director Mick Wilkes said the strong finish to last year's production allowed the company to meet its forecast.

"As expected both Macraes and Reefton delivered higher grades to the mill during the fourth quarter and thus production was up 55 per cent on the previous quarter," he said.

The company's report said that earlier this month, production was halted for four days after heavy rain caused "major movement" in an area of the the Macraes Open Pit that had seen frequent movement over the past 16 years.

"The monitoring system in place gave ample warning of the higher movement allowing all personnel and equipment to be evacuated from the pit and underground without harm," the report said.

"Access to the underground was re-established and normal operations recommenced there after four days."

OceanaGold spent US$4.1m on exploration during the year, most of it at the historic Blackwater mine as well as to the north and south of the site. Results of the third drill at Blackwater are expected by March.

Wilkes said the Philippine Didipio project was running ahead of schedule and was now producing copper-gold concentrate.

However, some operational problems meant the processing plant had stopped for a few weeks.

A "minor incident" had also highlighted problems that would affect the plant's long-term reliability when cranked up to the targeted annual throughput of 3.5 million tonnes year.

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OceanaGold's full financial results will be released on February 14.

- BusinessDay.co.nz

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