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Going unhedged pays off for OceanaGold

Friday 30th July 2010

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Selling 100% of its gold production into the spot market yielded OceanaGold a 226% improvement in quarter-on-quarter cash operating margin, the company says in its report for the three months to June 30.  

"This was the first quarter in the company's history where OceanaGold has been hedge free and 100% exposed to the spot market," said chief executive Paul Bibby in a statement to the NZX.

“This has significantly increased our ability to strengthen the balance sheet and has provided the flexibility direct investment back into the business."

The company has announced expansion to open pit gold-mining at three sites at its Reefton mine, and made significant new discoveries during the quarter at its Macraes and Frasers Underground mines in South Otago.

The operating margin on gold produced rose to US$627 an ounce, following closure of the company's hedge book at March 2010.

Oceana Gold shares rose 4.4%, or 15 cents, to $3.60 yesterday. The release was made after the close of trading.

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