Shares in Oceana Gold have taken a hammering in recent days following release of an investor presentation last Friday which initially buoyed the stock.
Following release of an analyst presentation last Friday morning, Oceana's shares spiked 6% to touch $4.46, but then plunged more than 13%, trading around $3.87 yesterday.
Within the 88-page presentation was 25 pages on its new Haile gold development mine in South Carolina, the second document released this month giving increasing detail of the US project, along with updates on New Zealand and Philippine operations.
Craigs Investment Partners broker Peter McIntyre said following release of the presentation, there was ‘‘heavy trading'' of the stock on the Toronto exchange, which is Oceana's principal listing on three exchanges.
‘‘It [price] then dropped off significantly. There may have been some profit-taking,'' Mr McIntyre said.
Despite the volatility during the past three working days, Mr McIntyre noted the stock was up 36% on six months ago and, year-rolling, was up 71%.
The Wall Street Journal reported yesterday that Canaccord Genuity had lifted its price target for Oceana by 6.1% to $A3.50 per share after a recent site visit to the Haile project revealed the potential for a much larger project than currently envisaged.
‘‘The inclusion of the underground [targets] lifts our project valuation by 31% to $A654 million,'' Canaccord said.
Mr McIntyre said there was ‘‘huge importance'' for Oceana around three separate optimisation reports from Macraes, Haile and Waihi, all due out later in the year.
‘‘Given the share price has run hard [up], some investors may be taking gains now and waiting to see about the reports,'' he said.
He also noted there would be investor concern over Oceana having estimated its calendar 2016 foreign exchange rate at US65c, given the 15-month high so far had been US75c down to US63c, and was trading around US66c-67c in recent weeks.
The presentation noted the Haile project, purchased last year for $996million (scrip only), was expected to get its first ore through the mill by the end of 2016. About 40km of exploration drilling was ongoing, and its mine optimisation study was due to be delivered late in the year.
Haile, with an estimated resource of 4.8million ounces of gold, had an ‘‘extensive'' exploration programme outlined, including underground targets Mustang, Palomino and Horseshoe.
At the Didipio gold and copper mine in the northern Philippines, Oceana outlined it was undertaking underground drilling in the second half of 2016.
Exploration at Macraes in East Otago, was ‘‘ongoing'', and a study into combined gold and tungsten extraction was expected around mid-2016.
While Macraes still delivers the most annual gold production for Oceana, its costs to do so are far beyond that of costs at Didipio, which are offset by the sale of the by-product copper extracted.
At its Waihi mine in the central North Island, Oceana hopes to re-establish road access to the historical Martha pit, following a slump last year, is continuing with 34km of exploration drilling and its mine optimisation study is expected in second half 2016.
