Asset writedown for OceanaGold

Last updated 10:17 26/07/2013
OGC 2.840 0.04 1.43%

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South Island goldminer OceanaGold has written down the value of its assets by US$85.5 million because of the significant fall in the price of gold and plans to cut the level of mining at Reefton on the West Coast.

OceanaGold reported operating profits (ebitda) of US$42.5m and a net loss of US$70.5m for the June quarter.

The net loss reflected a pre-tax, non-cash impairment charge of $85.5m, which was mainly because of the significant decline in the gold price and resultant reduction in mining at Reefton, the company said

OceanaGold produced 68,353 ounces of gold in the June quarter and 5710 tonnes of copper.

Gold production was higher compared with the first quarter because of increased production from Didipio, in the Philippines, and Reefton. That brought in revenues of US$131.2 million for the three months.

Total gold sales in the period were 70,706 ounces at a cash cost of US$682 an ounce, net of byproduct credits.

The company's Didipio gold and copper mine came into effective production in April.

Didipio has ramped up to commercial production rates in just over three months after the first ore went through the mills in December 2012.

During the quarter, Didipio produced 13,676 ounces of gold and 5710 tonnes of copper, and in the first half of the year the mine has produced 20,553 ounces of gold and 9373 tonnes of copper.

Production was higher quarter on quarter at Reefton because of the extra tonnage mined, higher grade ore processed and better recoveries.

At Macraes in Otago, second-quarter production was lower than in the previous quarter, as expected, because of the adjustments made to the mine schedule after pit-wall movement reported in January.

The mine had severe rain and snow in mid-June that hampered mining operations.

The company expects production in New Zealand to progressively increase over the remainder of the year, with the fourth quarter being the strongest quarter in 2013.

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