Gold reached record highs in New Zealand dollar terms yesterday, peaking at $1886 per ounce during the day.
Global spot gold prices have rallied since January when the price fell from $US870 to $US820 as Russia sold about a third of its bullion stocks to offset the declining prices in oil.
Globally, spooked investors still uncertain about delivery of the US$2 trillion banking bail-out package, have boosted the gold rally with an almost 10% rise in prices during February as they seek a safe haven from turbulent equity markets.
Gold yesterday rose more than $US10 per ounce to hit $US978.20 on the New York Mercantile Exchange.
Triple-listed East Otago-based Oceana Gold, which is due to report its fourth-quarter results from its principal Toronto stock exchange listing today, is reaping the rewards of the safe haven investment, with its formerly languishing share price having gained 30% in value since the start of February, ABN Amro Craigs broker Peter McIntyre said yesterday.
Its shares on the TSX, NZX and ASX surged a further 5% yesterday to about 85c"Their share price is going from strength to strength, largely because of the lack of mining stocks in this country," Mr McIntyre said.
In early-February Oceana announced an almost 50% increase in gold produced from its East Otago and West Coast mines, but production is slightly down on earlier forecasts. In a brief fourth-quarter production note released to the ASX yesterday, Oceana said the quarter's gold sales were 74,816oz, boosting the total production for the full calendar year 2008 to 264,124oz, an increase of 49% compared with 2007.
Oceana forecast production of 280,000oz to 290,000oz. Mr McIntyre said Oceana expected to come in at the lower end of the scale.
While it was enjoying investor confidence in its share price rally, it was selling directly into the rising spot-gold market.
Mr McIntyre was expecting guidance on Oceana's forward sold contracts, which account for 40% of production and were likely to bruise its bottom-line.
"We will be expecting to see fixed costs down . . . but more news is needed on its Didipio development [gold and copper mine in the northern Philippines]," Mr McIntyre said.
Oceana is still seeking a joint venture partner and cash injection for its mothballed northern Philippines gold and copper development mine, which hit a cost over-run in December, rising from $US160 million to $US320 million.
It was understood to have spent $120 million to date on development, but analysts are becoming increasingly concerned at Oceana's inability to secure further investment of $200 million because of risk-averse investors and the credit crunch.
