Goldminer plans production cut

Australian goldminer OceanaGold has produced a record gold output of 325,732 ounces in 2013 but plans to produce less this year.

It is forecasting production of 275,000 ounces to 305,000 ounces for 2014.

Its announcement of record gold production for 2013 comes after it last week laid off 76 employees at its biggest mine, Macraes in Central Otago.

The company has set out to slash US$100 million ($120.3 million) from its costs in New Zealand where its two biggest goldmines, Globe Progress near Reefton on the West Coast and Macraes, are located.

It has frozen wages, altered mining schedules and laid off staff at the New Zealand operations to make the savings to counter the falling price of gold.

Macraes Open Pit and the nearby Frasers Underground mine now also have shortened lives with Frasers to operate until mid-2015 and Macraes to the end of 2017.

OceanaGold has developed a new goldmine at Didipio in the Philippines where the price for the copper by-product is more than offsetting the costs of mining for gold there and reducing the company's overall costs.

The company said it had exceeded its 2013 gold and copper production guidance at lower-than-planned costs on the back of strong fourth -quarter production in New Zealand and the Philippines.

The company forecast cash costs of US$400 to US$450 an ounce for 2014 compared to US$426 an ounce in 2013.

Managing director Mick Wilkes said he was pleased with the strong finish to 2013.

The company had successfully commissioned the high-grade and low-cost Didipio mine and lowered costs in the New Zealand operations.

In the fourth quarter gold production was 54 per cent higher than the third quarter because the company processed high grade ore in all operations and copper production was 23 per cent higher.

The record 325,732 ounces of gold was slightly ahead of its forecast guidance of 285,000 ounces to 325,000 ounces.

Of that, New Zealand produced just shy of 80 per cent, or 259,455 ounces, and Didipio 66,277 ounces. Didipio also produced 23,059 tonnes of copper, ahead of forecast.

For 2014 OceanaGold is forecasting about a 20 per cent drop in gold production from New Zealand of 190,000 ounces to 210,000 ounces.

It is ramping up gold production at Didipio with a forecast for 2014 of 85,000 ounces to 95,000 ounces compared with just over 66,000 produced in 2013. Copper production there is forecast to be similar to 2013 at 21,000 to 24,000 tonnes.

The company will release its full-year financial results on February 20.

Fairfax Media