KEY POINTS:
OceanaGold Corporation produced nearly 63,000 ounces of gold from its South Island mines in the first quarter of 2008.
Altogether the company sold more than 67,700 ounces of gold in the three months to the end of March, a 75 per cent increase on the same period in 2007.
In the latest period the average price was US$919 ($1200) per ounce for total gold sales of US$62.3 million in the quarter, compared to US$20.8m a year earlier, the company said today.
Earnings before income tax and unrealised losses on hedges was US$3.1m, compared to a loss of US$300,000 in the first quarter of 2007.
The 44,631 ounces produced from the Macraes goldfield in Otago during the quarter was an increase of 23 per cent from a year earlier.
The increase was due to production from the Frasers Underground mine, which was commissioned in January, and to higher grades from the open pit, OceanaGold said.
The Reefton goldfield on the West Coast achieved expectations with production of 18,204 ounces.
The company said its result was driven by a 46 per cent increase in the average gold price received, along with the increased production from the Macraes open pit mine, and gold production from both the Reefton and Frasers Underground mines.
Factors offsetting the higher price and increased production included higher depreciation and amortisation expenses. The start up of the new Reefton and Frasers Underground mines added US$5.3m, and the amortisation of deferred stripping costs added US$4.3m, compared to the 2007 first quarter.
There were also increased interest costs associated with higher levels of debt and a US$3.7m unrealised foreign exchange loss on cash holdings.
Earnings before interest tax depreciation and amortisation, excluding unrealised hedge losses, increased fourfold to US$21.7m.
The cash operating cost per ounce increased to US$496 from US$421 a year earlier, but was lower than the US$544 in the 2007 fourth quarter.
The costs were affected by the continued strength of the New Zealand dollar, and higher diesel and electricity prices, the company said.
But the increased average gold price more than offset the cash cost increase and resulted in a doubling of the cash operating margin to US$423.
Along with its operations in this country, OceanaGold is developing a gold and copper project at Didipio on Luzon in the Philippines.
It is also carrying out exploration work at Macraes, Reefton and Didipio.
OceanaGold shares traded on the New Zealand stock exchange for the first time in a fortnight today, and dropped 55c or 16.7 per cent to $2.75 on small volumes. In the past year the shares have ranged between $4.35 and $2.55.
The Melbourne-based company is also listed on the Toronto and Australian stock exchanges.
- NZPA
