Oceana Gold up 9%

Global spot gold prices, around $US1600 ($NZ2028) yesterday, have declined more than 10% in...
Global spot gold prices, around $US1600 ($NZ2028) yesterday, have declined more than 10% in recent weeks; pictured is a 100g fine gold plate produced in Bulgaria. Photo by Reuters.
Shares in East Otago-based Oceana Gold received a welcome new year boost yesterday, rising during the trading session with a 9% gain to reach $3 per share; albeit on low trading volumes.

Fluctuating global spot gold prices, down from $US1800 per ounce in recent weeks to around $US1600 ($NZ2028) an ounce yesterday, were reflected in Oceana's share price which dropped by 20%, from $3.38 in mid-December to $2.68 at the end of the month, before beginning to retrace the losses.

Craigs Investment Partners broker, Paul Valk, said Oceana Gold's share price had mirrored the declining spot gold prices, noting that by noon yesterday just 63,000 Oceana shares had changed hands.

Oceana Gold has not been alone in its share decline, with most major producers taking a hit as investors shied away from the traditional safe haven of gold in times of turmoil, and instead repatriated funds home, which has seen a surge towards the safety of US Treasury bonds.

In mid-June, 22-year-old Oceana announced its overall New Zealand operations were expected to be extended by seven to eight years into 2018-19, and then sought the granting of ongoing resource consents at Macraes to continue its mining operations.

However, Oceana is appealing recent Environment Court-imposed conditions involving provision of a $2 million trust fund for the local community and an earlier proposal to maintain a heritage art park once mining at the East Otago site is finished.

This calendar year, Oceana's forecast production is down slightly to 255,000-270,000 ounces, but combined with its development gold and copper mine at Didipio in the northern Philippines; due to go into production by the end of the year, Oceana is targeting annual gold production of 600,000 ounces by 2016.

simon.hartley@odt.co.nz

 

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