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OceanaGold 3Q profit soars

Friday 28 October 2016 10:01 AM

OceanaGold 3Q profit soars as year-earlier Didipio shutdown washes through

By Paul McBeth

Oct. 28 (BusinessDesk) - OceanaGold Corp third-quarter profit soared 345 percent as the gold miner expanded its operations and didn't have a repeat of the previous year's impact from the shutdown of the Didipio mine for maintenance.

Net profit climbed to US$30.7 million in the three months ended Sept. 30 from $US6.9 million a year earlier, the Melbourne-based company said in a statement. Revenue rose 37 percent to US$150 million.

OceanaGold has been benefitting from the acquisition of Canada's Romarco Minerals and the Waihi mine in New Zealand, and gold produced in the year to date is tracking at 314,313 ounces from 297,663 ounces a year earlier, with gold sales of 331,489 ounces compared to 276,104 ounces in 2015. Gold sales were at an average price of US$1,212 per ounce in the nine months ended Sept. 30, and gold's spot price was recently at US$1,268.61/ounce.

The miner expects gold production of 385,000-to-425,000 ounces and copper production of 19,000-to-21,000 tonnes in the calendar year with all-in sustaining costs of US$700-to-US$750 per ounce.

"Our financial performance continued to be strong in the third quarter and we are well on track to achieve our 2016 production and cost guidance," chief executive Mick Wilkes said. "With a strong balance sheet, we are well-placed ahead of 2017 where we expect to generate even stronger cash flows with Haile being added to our stable of strong cash-flow generation operations."

The miner has responded to a Philippino government audit of its operations that threatens to suspend the site and is waiting for an official response from the Department of Environment and Natural Resources. Didipio produced 25,568 ounces of gold, 5,114 tonnes of copper, and 64,016 ounces of silver, in the quarter, and accounted for about 43 percent of the company's revenue.

The New Zealand operations saw 40,182 ounces of gold produced at the Macraes mine in Otago and 23,225 ounces from Waihi. The local operations generated the rest of OceanaGold's revenue in the quarter.

The miner's expansion plans consist of exploration ways to extend the lives of the New Zealand and the Philippines operations, and developing the Haile mine in the US, where commercial production is slated to start in early 2017.

The shares are listed in New Zealand, Australia and Canada, and last traded at $4.34 on the NZX, having gained 54 percent so far this year.

(BusinessDesk)

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