Copper and gold concentrate from Oceana Gold's Didipio project, in the Philippines. Photo supplied.
The wide guidance provided yesterday by Oceana Gold
disappointed the market, which continued to grapple with the
gold and copper miner's cash cost and production.
Craigs Investment Partners broker Peter McIntyre said the
miner, which operated the Macraes and Reefton projects in New
Zealand, had lost 30% of its market capitalisation as the
share price slipped in the past month from $4.38 to $3.30.
''It mirrors what is happening with other Australasian
miners. The spot gold price has slipped 5% but gold miners
are retracing much faster than the price of spot gold,'' he
Guidance for 2013 from Oceana Gold came in at a total company
production of 285,000 ounces to 325,000 ounces at a cash cost
of $US650 to $US800 ($NZ775 to $NZ954) an ounce.
In New Zealand, production was estimated at 235,000 ounces to
255,000 ounces at $US880 to $US950 an ounce, down from this
year's $US1000 an ounce.
Didipio gold production, which had just started in the
Philippines, was estimated to be 50,000 ounces to 70,000
ounces next year, and copper production was set at 15 tonnes
to 18 tonnes. Mr McIntyre said the 40,000-ounce spread for
total production was wide and last year the company had come
in at the low end of its guidance.
''I can see the rationale for that. Oceana has a new project
they are settling in. They are likely to get better ore
quality from Macraes in the next 12 months and will have the
opportunity to surprise on the upside rather than the
downside. Even so, the guidance could have been a bit
tighter,'' he said.
Oceana Gold managing director Mick Wilkes said in the past
week, the company had successfully commissioned the flotation
cells and filter to produce saleable copper-gold concentrate
The process plant was now running in a steady state and the
remainder of the commissioning activities this year would
focus on increasing throughput and improving recoveries and
''We have had a strong finish to the year as expected, with
production from New Zealand on track to meet the revised
guidance. We expect strong production next year in New
Zealand and with Didipio coming on stream as planned. We are
in a great position heading into 2013.''