Oceana Gold's share price remains volatile as it re-enters a
partial forward hedging programme covering some gold
production during the next two years.
Oceana shares, the worst performing on the New Zealand stock
exchange last year, hit a peak of $3.45 last April before
slumping to $1.34 in late June, and have since spiked and
fallen several times to trade around $1.96 on Monday.
Following statements yesterday on record production in 2013
and lower-than-expected cash costs, Oceana's shares were up
about 9% at $2.13, but remained almost 40% down on the year
Craigs Investment Partners broker Peter McIntyre said gold
producers' share prices had been ''extremely volatile''
during the past year, mirroring the gold price and reflecting
massive redundancies and work deferral around the sector in
general, but Oceana's price had held up better than some of
the major Australian companies.
Oceana sold off its hedging programme several years ago when
the spot price of gold took off, culminating in a high of
$US1921 ($NZ2308) in September 2011; it has since softened to
trade around just over $US1200 ($NZ1442).
Oceana has resumed some forward contract gold price hedging,
because of the softening gold price, partially covering
208,000oz over two years, with a floor price of $US1230 and
ceiling at $US1312.
Oceana chief executive Mick Wilkes said the company would get
$US1230 per ounce, even if the spot price fell below that
level, and conversely, if it was above $US1312 per ounce,
would only get that price.
Mr McIntyre said: ''Oceana is trying to maximise and protect
against down-side forces and put in place hedging to cope
with the lower-end gold price.''