Credit facility for Oceana Gold

Oceana Gold has clinched a multibank three-year $US220 million ($NZ276.5 million) credit facility, largely for repayment of $A167.8 million ($NZ218.1 million) in convertible bonds during the next 18 months.

In a market update on the banking facility, and construction work on its gold and copper mine at Didipio in the northern Philippines, Oceana managing director Mick Wilkes said Didipio's costs had risen almost 20%, from $US185 million to $US220 million.

"The main contributors to the increased capital costs are associated with increases in engineering design and procurement services, TSF [tailings storage facility] and infrastructure construction, and site support costs," he said in the statement.

At June 30, Oceana had spent a total $US161 million at Didipio, which is more than 70% complete and fully financed through to commercial production, Mr Wilkes said. A further $US24 million was committed in contracts and cash in hand stood at $US73 million.

He said Oceana's current cash position, cashflows from New Zealand operations this calendar year and the $US220 million credit facility meant the company was well positioned to meet its "medium term growth objectives".

Of the $US220 million available in banking facilities, $A57.8 million could be used to pay for maturing convertible bonds in December this year, a further $A110 million maturing in December next year and the balance of $US50 million could go towards a general working capital facility.

Oceana said in a separate statement yesterday a Didipio worker had been killed, following a recent severe storm which had hit the site.

The employee was a Filipino national, one of more than 1600 on site, and worked for the mining contractor to Oceana. An investigation into the incident had begun.

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