Shares in triple-listed Oceana Gold continued their stellar run, gaining 13% in value yesterday to trade up at an almost year-long high of $1.76 on the New Zealand stock exchange.
In mid-June last year Oceana shares were being driven down from an earlier year-high of $2.06 at the time, briefly passing through $1.76 on their way to languishing at 22c by last December.
World gold spot prices have been edging closer to $US1000 ($NZ1543) again this week, trading just below $US990 on Tuesday night, having spiked more than 4% from $US950 a week ago, ABN Amro Craigs broker Chris Timms said yesterday.
At 3.30pm yesterday spot gold prices were at $US985 and Oceana shares were up 13%, or 20c, at $1.76, and closed at $1.75, but on "reasonable" volumes of 130,000 shares traded yesterday, he said.
Mr Timms said Oceana's share decline to last December was driven by uncertainty surrounding its ability to continue with development of a gold/copper mine in the northern Philippines, which had since been mothballed for lack of international funding, and also by institutional and small investors' reluctance to back high-risk companies in the face of the worsening global credit crunch.
However, Mr Timms said, since then Oceana's stellar share price gains have been due to both the recent spike in world spot gold prices and investors increasing their "risk appetite" in more settled markets.
The weakening US dollar has to a large extent been underpinning the resurgent gold price in recent weeks, with investors turning to the historical "safe haven" of gold as the greenback weakened, Mr Timms said.
Earlier this week it was disclosed Oceana Gold chief executive Steve Orr, who resigned from the company a fortnight ago after five years, sold a million ordinary Oceana shares for $NZ1.36 million last week.
Mr Timms said there appeared to have been no market reaction to Mr Orr's share sales, in three tranches.
