Oceana Gold buys stake in Nevada prospector

Cash-rich Oceana Gold has bought a 14.9% stake in Canadian gold exploration company Gold Standard Ventures Inc which is exploring for gold in northern Nevada.

Oceana took a $12.1 million stake in an El Salvadorean gold and silver exploration company in late 2013, and only last week agreed to buy Newmont Mining Corp's Waihi gold and silver mine for $132.2 million.

Aside from its Macraes open pit and underground operations in East Otago and an open pit at Reefton on the West Coast, Oceana continues increasing production from its Didipio gold and copper mine, on the northern Philippines island of Luzon.

In its quarterly report last week, Oceana reported a drop in after-tax profit, from $US58.9million a year ago to $US24.4million, but paid off a further $US13.4 million debt and retained cash in hand of $US59.6 million.

In a market update, Oceana Gold chief executive Mick Wilkes said the Gold Standard Ventures stake, which cost $C16.24 million ($NZ18.07 million), was an opportunity to gain exposure to another jurisdiction, in one of the most prolific gold belts in the world.

Oceana was acquiring the common shares for investment purposes, but depending on market conditions, it might acquire more shares or other securities of the company, or dispose of them, he said.

Gold Standard Ventures has said that in exploration to date about 385 drill holes have been completed at its Pinion prospect, and in March had released its first gold resource estimates.

Its website states the Railroad-Pinion gold prospect was its flagship project in north-central Nevada, covering about 115sq km. The exploration area is near Newmont's Rain and Emigrant mines, about 47km southwest of the city of Elko.

simon.hartley@odt.co.nz

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