For the just second time in 27 years, a mine other than its mainstay Macraes site in East Otago has produced more gold during a quarter. Its northern Philippines Didipio mine contributed 62,748oz while Macraes delivered 38,550oz.
For the quarter, Oceana’s after-tax profit of $US53.7million ($NZ78.09million) was dragged down by legal costs in an El Salvador venture, which attracted a $US17.7million impairment charge, delivering a final after-tax profit of $US36million.
Oceana chief executive Mick Wilkes said it was "another strong quarter" for New Zealand’s largest gold miner, highlighting its strong balance sheet, quality assets, growth opportunities and industry-leading profit margins gained from low production costs.
"We achieved record quarterly gold production on the back of record production at Didipio and the commencement of production at our newest asset Haile [in South Carolina]," Mr Wilkes said in a statement yesterday.
In the Philippines, Oceana had in recent months become embroiled in a round of mine closures and suspensions by the Department of Environment and Natural Resources, but because Oceana immediately appealed that ruling, it was able to continue operating Didipio.
Oceana said yesterday it was awaiting a ruling from the Office of the President, the hard-line Rodrigo Duterte.
In February Philippine Environment Secretary Regina Lopez ordered the permanent closure of 22 mines, for environmental breaches.
The Philippines is the world’s top nickel ore producer.
On Thursday, Ms Lopez said the ban on open-pit mining would not apply to existing mines, but only to undeveloped ones, Reuters reported.
Oceana’s crucial all-in sustaining costs to produce an ounce of gold, from consolidated operations, was $US521, following sales of 114,022oz and 4148 tonnes of copper.
Revenue for the quarter was up 10% on the previous at $US161.8million and earnings before interest, tax, depreciation and amortisation were a record $US101.7million.
Cash in hand stood at $US70.6million, while total debt was $332.8million.Oceana maintained its earlier production guidance for calendar 2017 at 550,000 to 610,000oz, which would be its first year delivering more than half a million ounces.Other company filings yesterday said.
"The focus for 2017 will continue to be on growing the company’s [estimated gold] resource base, leading to mine life extensions".
There are further growth opportunities with expansion at Haile and the Martha open pit mine in Waihi, and the start of mining at the Coronation North prospect at Macraes, in East Otago.
Haile mine had during its commissioning period produced 20,798oz and in March the plant was formally handed over from the construction project team to operation.
Oceana expects the Coronation North project and increased production from Haile will result in second-half gold production "broadly in line" with first-half results, noting expectations of less production from Didipio as its first stage open-pit mining comes to an end before the underground mining starts, at the end of the year.
