OceanaGold 3Q profit drops 59% on Didipio shutdown

Friday 30th October 2015

OceanaGold, which operates gold mines in Otago and Waihi, reported a 59 percent drop in third-quarter profit as planned maintenance reduced copper production at its Didipio mine in the Philippines, weighing on revenue.

Net profit fell to US$6.9 million in the three months ended Sept. 30 from US$16.9 million a year earlier, with an 11 percent decline in revenue to US$109.6 million, and US$4.5 million of costs associated with recent acquisitions weighing on the bottom line, the Melbourne-based company said in a statement. Earnings before interest, tax, depreciation and amortisation fell 19 percent to US$35.1 million.

OceanaGold has been expanding its gold mining footprint with this year's acquisitions of Canada's Romarco Minerals and the Waihi mine in New Zealand, while also investigating ways to extend the life of the Macraes goldfield in Otago.

"With the addition of the Haile and Waihi assets, we have further strengthened and transformed the company into a leading mid-tier gold producer with low-cost production growth, significant cash flow generation and a solid pipeline of organic growth opportunities," managing director Mick Wilkes said. "Over the course of the next 12 months, we will advance comprehensive exploration programmes across our portfolio to unlock value at each site while optimising our existing operations."

The company produced 87,667 ounces of gold in the quarter, selling 78,639 ounces at an average price of US$1,090 an ounce. It produced 5,219 tonnes of copper, with sales of 5,484 tonnes at an average price of US$2.34 per pound.

The miner affirmed guidance to produce between 380,000 and 410,000 ounces of gold in the calendar year and between 22,000 and 23,500 tonnes of copper, with cash costs between US$420-and-US$470/ounce and all-in sustaining costs of between US$690-US$740/ounce.

The shares are listed in New Zealand, Australia and Canada and last traded on the NZX at $2.83, having gained 29 percent this year.

BusinessDesk.co.nz

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