A ball mill shell arrives by ferry at Port Irene on Luzon island in the Philippines for transport to Oceana Gold's gold and copper Didipio project, earlier this year. Photo supplied.
Shares in East Otago gold miner Oceana Gold have plunged more
than 15% in the past three weeks, since it raised $114
million in Canada, having sold 30 million shares to a
syndicate of underwriters earlier in the month.
Commissioning of Oceana's Didipio gold and copper mine on the
northern Philippine island of Luzon was unaffected by typhoon
Bopha, which swept through the main southern island of
Mindanao this week, killing more than 700 people and leaving
900 still missing.
Oceana announced the Canadian capital raising on December 4,
but its shares subsequently plunged 16% from $4.10 to trade
around $3.45-$3.50 yesterday.
From a year-low of $2.27 in mid-May, Oceana shares hit a high
of $4.50 in late October, before the start of the slump in
At the time of the Canadian capital raising, Craigs
Investment Partners broker Peter McIntyre had cautioned about
the likelihood of a share dilution and loss of value with the
issuing of 30 million shares about to go to market.
The securities will be offered in each province of Canada by
the purchasing syndicate, with the exception of Quebec, in
short form prospectus, and possibly in Australia, but on a
private placement basis.
Oceana has said the Canadian cash raised would be used to
reduce outstanding debt and provide balance sheet and
Mr McIntyre said yesterday the share dilution, softening of
the global gold price, a weak US dollar, Federal Reserve
fiscal stimulus and profit taking had all combined to
undermine the share price.
Gold prices had waned in the face of some ''relatively good
news'' in recent days on the fiscal cliff being faced by the
United States on January 1, when taxes are legislated to go
up and public sector spending is to be cut.
''Oceana stock has captured attention, not just investors,
but globally as it's now one of the largest producers in
Australasia,'' Mr McIntyre said.
However, that popularity and a rising price meant some
investors during the past year would be taking the
opportunity to take their profit from the rising value.
Oceana has forecast increasing cash flows from its four
operating mines: two at Macraes in East Otago, Reefton on the
West Coast and Didipio in the northern Philippines, which is
being commissioned and is due to produce concentrate by next