East Otago-based Oceana Gold has, for the second time in a year, upgraded its overall estimated gold reserves, further extending the estimated "life of mine" to eight years.
Despite a declining share price in recent months and dampened global spot gold prices, yesterday trading around $US1364 ($NZ1799), Oceana chief executive Mick Wilkes reiterated the company was intending to spend almost $12 million on exploration around its East Otago open cast and underground mine and at its West Coast open cast Reefton tenement.
"We're spending at least $US9 million this year on exploration in New Zealand and are upbeat about the prospects of continuing to unlock organic value in these operations for our stakeholders," he said in a statement to the market yesterday.
The gold production of 21-year-old Oceana during calendar 2010 was 268,087 ounces, or about 10% below target, following a record year of 300,391 ounces in 2009.
Oceana's waning shares - down more than 33% since a record $5.41 last September - rebounded 7% on yesterday's news to trade around $3.65.
Two years ago, Oceana had a "reported average reserve life" of just three and a-half years, but the boosted estimates now show seven to eight years of mine life for Macraes open cast, with a "respectable amount of reserves" increasing at its Frasers underground operation there, while Reefton had "tremendous blue sky opportunities", Mr Wilkes said.
Oceana's estimate of its "measured and indicated" resources were increased by 22% to 4.61 million ounces of gold yesterday.
Craigs Investment Partners broker Peter McIntyre said the increased estimate was a "vote of confidence" for Oceana's New Zealand operations, at a time it wants to restart its mothballed Philippines gold and copper development.
