Strong first-quarter result from Oceana Gold

Oceana Gold has posted a strong first-quarter result, underpinned by increasing gold and copper production from its Philippines operations.

Quarterly revenue reached a record $US170.4 million ($NZ199.5 million).

Earnings before interest, tax, depreciation and amortisation (Ebitda) was $US101 million and after-tax profit was $US58.9 million, tafter a $US28.2 million loss the previous quarter.

The 86,568 ounces of gold produced was down 25% from the previous quarter, because of lower production from New Zealand operations.

That was partly offset by increased gold from the Didipio mine in the Philippines.

Oceana's pit at Macraes in East Otago suffered a large slip in mid-April, prompting suspension of operations, but six days later production from the Frasers underground resumed, its portal being in the pit bottom.

Cash costs to produce gold, which includes offsets from selling its copper, were low at $US170 per ounce. While 86,568oz was produced, a total 94,050oz was sold for the quarter.

The average $US1311 per oz return was up 3.8% on the previous quarter.

Oceana's managing director Mick Wilkes said yesterday the company was developing a new mine plan for the open pit and he did not expect the pit wall failure would affect

production guidance for the calendar year of 275,000 to 305,000oz of gold.

''We continued to strengthen our balance sheet through the repayment of $US20 million of debt and build-up of our treasury,'' he said in a statement.

Banking facilities and cash on hand had in total increased to $US92.1 million, including $US42.1 million cash.

The Didipio processing plant was ''well on track'' to increase ore throughput to 3.5 million tonnes per annum by the end of the year and will ''continue generating strong free cash flows''.

''For the remainder of the year, we will continue ... repaying debt to enhance shareholder value and position the company for new value-add opportunities,'' Mr Wilkes said.

The $US101 million Ebitda for the first quarter compared with $96.5 million for the fourth quarter of 2013.

''The increase is attributed to higher gold and copper sales from the Philippines, higher average gold price received and lower costs, partly offset by lower gold sales from New Zealand and lower copper price received,'' Oceana said yesterday.

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