Otago-based Oceana Gold became a $1 billion-plus company yesterday, hitting a record share price high following announcement of its inclusion on two international rating indexes on the Toronto stock exchange.
Shares in triple-listed Oceana gained more than 6% yesterday, from $4.38 to a record $4.65 after announcing international rating agency Standard & Poor's had included New Zealand's largest gold producer on its separate S&P TSX Global Gold Index and S&P TSX Global Mining Index.
Gold, and some non-Australian gold producer stocks, have enjoyed a revival during the past two months, resuming their mantle of safe-haven investments, on growing concerns over European sovereign debt issues in world financial and commodities markets.
Oceana bought back its entire forward-contract hedge book in March for $102 million, following a $119 million capital raising, and now sells 100% of its gold on the daily spot market - potentially adding up to $80 million to its bottom line if spot prices are sustained.
By December 2008, Oceana's shares had spiralled down to languish at 22c, valuing Oceana at $50 million, but at the all-time high of $4.65 yesterday its market capitalisation stood at more than $1 billion, Craigs Investment Partners broker Peter McIntyre said.
"This [share strength and index inclusion] will have exceeded the expectations of everyone, probably including themselves," Mr McIntyre said.
In a brief statement to the markets, Oceana chief executive Paul Bibby said: "This marks another important milestone for Oceana Gold and acknowledges the improved investor recognition and trading volumes as Oceana Gold continues to unlock value across the company".
Mr McIntyre said Oceana's inclusion on the S&P indexes meant it was "now on the radar" of big institutional investors who tracked the larger companies using the index ratings.
"For such a brief statement from Oceana, it's one of its most significant," he said.
The global gold index is an international benchmark on the Toronto exchange, while the global mining index covers mineral companies around the world, including 36 gold producers.
