Oceana raises funds for expanded exploration

Oceana Gold has raised $A24.2 million ($NZ30 million) in a funding boost designed to expand its exploration programme which could ultimately add three years to the mine life of its Macraes and Reefton operations.

Oceana shares, which were placed on a trading halt on Tuesday at $1.45, resumed trading yesterday and slid 5% to about $1.38 on low volumes.

The $1 price of the new placement represented an 11.1% discount.

Triple-listed Oceana's chief financial officer Marcus Engelbrecht was "very pleased" with the placement, highlighting the exploration underpinned opportunities for Oceana to find and sell unhedged gold (not contracted to sell at a set price) in the future.

"The funds raised will provide the opportunity to immediately mobilise our brownfields exploration programme in the vicinity of our existing mines in New Zealand," he said in a statement yesterday.

The non-underwritten placement for 24.2 million new ASX-listed $1 chess depositary interests, which trade as ordinary shares but are held for investors in a nominee company, represent about 15% of the Oceana shares on issue.

ABN Amro Craigs broker Peter McIntyre said while the placement success was "seamless", and likely taken up by several of Oceana's existing top-five shareholders, the placement would still have a dilutionary effect on the share price.

Oceana had mothballed a gold-copper development mine in the Philippines a year ago, and been unsuccessful in finding new financial backing, but some of the placement money was tagged for a "revised feasibility study".

Mr McIntyre said the the Philippines gold-copper prospect had already been identified as a "high-class mineral depository", and believed more information on what the new feasibility study entailed should be released for investors.

ABN research this week had identified copper, at present trading at about $US2.25 ($NZ3.43) a pound, as having long-term potential to be boosted by increasing demand - having been near $US4 a pound on the spot market a year ago, before nose diving.

Mr McIntyre said while the global recession had constrained copper prices, there remained a lack of large new copper mines due to come on stream during the next four to five years, which could favour Oceana's Philippine feasibility study.