Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


OceanaGold to scale back at Macraes, may take charge

OceanaGold to scale back Macraes mine operation, cut staff in face of falling gold price

By Paul McBeth

Jan. 8 (BusinessDesk) - OceanaGold Corp, the Melbourne-based mining group, plans to scale back its operations and shed staff at the Macraes goldfield in Otago in response to a falling gold price, and has flagged smaller production and an impairment charge in 2014.

The mining group’s board has signed off on a plan to cut costs at Macraes, which has been operating for 23 years, to reduce gold output and cut headcount over the next two years, it said in a statement. That plan will see a smaller cutback at the Frasers 6 open pit, scheduled to begin in the second half of the year, and will likely see the asset reviewed for an impairment charge in the end of year results.

OceanaGold has been scaling back its New Zealand gold mining production, including the mothballing of its Reefton mine from the middle of next year, in the face of falling gold prices. The price of gold was recently at US$1,230.71 an ounce, down 27 percent from the start of 2013. At the current price the Macraes open pit has a mine life until the end of 2017 and the Frasers underground mine has a life until the middle of next year.

“The continuing lower gold price has necessitated the need to make changes to our business to ensure a sustainable operation at Macraes,” managing director Mick Wilkes said. “Unfortunately these changes will also have an impact on some of our workforce and contractors, who I wish to thank and acknowledge for their contribution to OceanaGold.”

The company expects total gold production of between 275,000 and 305,000 ounces in the 2014 year, down from between 285,000 and 325,000 in the current year, and copper production of between 21,000 and 24,000 tonnes, up from 18,000 to 20,000 tonnes.

OceanaGold flagged total company cash costs of between US$400 and US$450 an ounce for 2014, compared to US$550 and US$650 an ounce in 2013, and all-in sustaining costs of US$750 to US$850 an ounce, down from US$900 and US$1,000 an ounce in the current year.

Wilkes said the company anticipates cutting its debt from increased production at its Didipio mine and its cost cutting measures in New Zealand.

“We will strive to look for further efficiencies and initiatives such as advancing the power grid connection in the Philippines,” he said.

In October, the company said it would buy the 80 percent of Pacific Rim Mining Corp it didn’t already own for C$10.2 million to gain access to Pacific Rim’s El Dorado gold-silver deposit in El Salvador.

OceanaGold forecasts total capital expenditure of between US$80 million and US$100 million in 2014, and exploration expenditure of between US$5 million and US$10 million in the Philippines and El Salvador.

The company also announced extra hedging for 208,000 ounces to partially cover production at the Otago site, ensuring it will get at least NZ$1,500 per ounce and no more than NZ$1,600 an ounce. The programme runs from January this year though to December 2015.

The triple-listed shares fell 3.3 percent to $1.75 on the NZX yesterday, and slumped by 50 percent last year.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Media: Fairfax Moves To Create Modern Newsroom

Fairfax Media New Zealand continues its newsroom transformation this week, with a proposal to further organise its editorial operations into focused, local teams and specialist national topic areas. More>>

ALSO:

Dairy: Fonterra Forecast For 2015/16 Season

Fonterra Co-operative Group Limited has today reduced its forecast Farmgate Milk Price for the 2014/15 season to $4.40 per kgMS. Along with its previously announced forecast dividend range of 20-30 cents per share, the change amounts to a forecast ... More>>

ALSO:

BusinessDesk: SkyCity Lifts Minimum Convention Centre Investment To $430M

SkyCity Entertainment Group, the casino operator, has lifted the minimum it will invest in the Auckland International Convention Centre to $430 million and said total costs including land may be $450 million to $470 million. More>>

Statistics: Drop In Dairy Prices Leads Fall In Exports

Total goods exports fell $240 million (5.5 percent) to $4.2 billion in April 2015 compared with April 2014, Statistics New Zealand said today. More>>

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>


BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>

Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>

BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news