East Otago-based gold miner Oceana Gold has posted record
revenue of $US553.6 million ($NZ670.3 million), following a
year of cost cuts targeting savings worth $US100 million.
However, what would have been a $US29.7 million after-tax
profit, up from last year's $US20.6 million profit, was
slashed to a $US47.9 million loss after Oceana had to account
for a decline in the value of its Macraes operations with a
$US77.6 million impairment charge, imposed because the mine
life has been reduced.
Some work at Macraes in East Otago and Reefton on the West
Coast has been deferred or postponed, plus the mines' lives
have been shortened.
As well, more than 100 staff and contractors' jobs have been
lost at Macraes and more than 200 positions at Reefton are
In its calendar full-year report yesterday, triple-listed
Oceana booked a 43.6% increase in revenue to $US553.6 million
and earnings before interest, tax, depreciation and
amortisation of $US262.4 million.
Cash costs to produce gold ounces are crucial for miners,
with Oceana streets ahead of its peers as copper production
from its new Philippine gold-copper mine, Didipio, offsets
gold extraction costs.
Across all mines, the cash cost for 2013 was $US426 per
ounce, including copper credits, while the average gold price
received for the year was $US1382 per ounce.
New Zealand produced the lion's share of gold, but its gold
production costs in isolation were $US740 per ounce.
Craigs Investment Partners broker Peter McIntyre said
investors would look beyond the loss, from the $US77.6
million impairment, or ''one-off accounting charge'' and
instead focus on costs, debt paid of $US64 million and
''They will see beyond that [impairment] and see Oceana for
what it is; a low-cost gold producer,'' Mr McIntyre said.
Oceana Gold chief executive Mick Wilkes he was pleased with
2013, having record gold and strong copper production and
record revenue, despite a ''significantly lower'' average
gold price than in recent years.
''We reduced our debt as planned and made some difficult but
necessary decisions during the year to ensure sustainable and
profitable business units in New Zealand, in this
lower-gold-price environment,'' he said in a statement.
Oceana finished its calendar full year with a flourish with
the fourth-quarter operations giving up a record gold take,
boosting the year tally to 325,732 ounces, a record and just