OceanaGold Corp, which operates the Macraes gold mine in Otago, reported a 58 per cent drop in first-quarter profit with sales down from a year earlier, and announced plans to buy the Waihi Gold Mine for US$101 million.
Net profit fell to US$24.5 million in the three months ended March 31, from US$58.9 million a year earlier, the Melbourne-based company said. Sales declined 24 per cent to US$129.3 million and earnings before interest, tax, depreciation and amortisation sank 40 per cent to US$60.7 million.
The miner announced plans to buy Newmont Mining Corp's Waihi operation for cash, plus adjustments. Newmont will keep a 1 per cent net smelter royalty for gold ounces mined from one specific tenement, capped at 300,000 ounces of production. The deal is subject to regulatory approvals and due diligence, OceanaGold said.
"The efficiencies implemented a year ago in New Zealand, along with lower fuel prices and a more favourable exchange rate, have translated into a more robust business with even stronger profit margins," chief executive Mick Wilkes said. The company's triple-listed shares closed down 3c yesterday on the NZX at $2.48.
