GRD sells Oceana stake

Listed miner Oceana Gold's majority shareholder, Australia GRD Ltd, today confirmed it has sold the lion's share of its 56.94 per cent holding.

The Australian engineering and development company sold a 50 per cent stake via an institutional bookbuild with Macquarie Bank at 81c per share -- a discount of less than 10 per cent to yesterday's closing price of $1.09.

Oceana Gold chief executive Stephen Orr welcomed the sale, saying it would give the company greater flexibility to react to growth opportunities.

The sale increased Oceana's free float from 43 per cent to more than 90 per cent, he said, and should improve the liquidity of trading in OceanaGold shares, which have ranged between 55c and $1.25 in the past year.

The shares traded down 14c, or just under 13 per cent, at 95c this morning after a trading bar was lifted.

Oceana's assets include the Macraes goldfield in Otago, and the Globe Progress project near Reefton on the West Coast.

GRD's Oceana stake has been under review since last September when GRD won the Lancashire waste project in the United Kingdom.

It was keen to quit the mining sector in favour of its new interest in synthetic gas production from green waste.

Several potential buyers reportedly ran the ruler over Oceana, including Australian miner Oxiana, before deciding against a purchase.

Oceana has had a torrid time in the past 18 months.

It was gearing up to expand production from the Macraes open-pit mine by opening the adjacent underground Fraser's mine development. But its underground mining contractor, Henry Walker Eltin, collapsed in November 2004, leaving Oceana's expansion plans stranded.

Then, with fuel and power prices rising, operating costs began to increase rapidly at Macraes, forcing Oceana into a major cost reduction programme, delaying the expansion plans for more than a year.

- NZPA