Record revenue for Oceana Gold

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 under threat.

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 Didipio's outlook.

''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 beyond forecasts.

- simon.hartley@odt.co.nz

 

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