Shares in Oceana, having had a stellar run during the past 11 months in which the price rose from around 20c to $2.70 before easing, yesterday were trading down 3.5% at $2.46 after the announcement.
Craigs Investment Partners broker Peter McIntyre said investors might be considering the potential for increased production costs, slight easing in New Zealand production during 2010 and the long-awaited review of Oceana's mothballed Philippines' development mine.
"The Philippines report will be eagerly anticipated by investors; just what Oceana intends on doing with it," Mr McIntyre said.
In the company's fourth-quarter production report, Oceana corporate and investor relations vice-president Darren Klinck said the majority of $1.9 million spent in exploration during the quarter was at existing brownfields sites.
There were six drill rigs at Macraes and one at Reefton, on the West Coast.
"This programme is part of an ongoing commitment to replace and expand the resource base at our New Zealand operations," he said.
Mr McIntyre said third-quarter cash costs were reported at $US473 an ounce.
Oceana had forecast increases for 2010 in the range of $US455 to $US495 per ounce.
The cost was likely to be confirmed in the full-year report in a few weeks, alongside overall 2009 production costs.
Earlier this week, for the second time since December, Oceana upgraded its estimated mineral reserve figures by a further 495,000 ounces to a total of 754,000 ounces, following more geologic analysis at its Macraes site, potentially extending its mine life to 2016.
Total estimated gold reserves stood at 1.94 million oz while total estimated gold resources were 3.78 million, Mr Klinck said yesterday.
In late 2006, in a cashless merger with Sydney-based Climax, Oceana took over development of the northern Philippines Didipio gold and copper prospect, but by June 2008 had spent about $US120 million ($NZ163.2 million) on development before its estimated cost had doubled to $US350 million, prompting mothballing of the operation.
Mr Klinck said this week Oceana was completing a technical re-optimisation study to look at both the capital-to-complete requirements and scope of the Didipio project.
"Field sampling was conducted on six Didipio regional exploration permits with assay results expected during the first quarter of 2010," Mr Klinck said yesterday.
Mr Klinck said the production guidance for calendar year 2010 was 270,000oz to 290,000oz, down slightly on the record as lower grade ore was expected to be processed at Macraes.
• Oceana's full-year financial and operational results are scheduled for release on February on February 18.
