OceanaGold reports record gold sales of $405m

Friday 18th February 2011

Melbourne-based OceanaGold reported record gold sales of US$305.6 million (NZ$405 million) for 2010, almost a 30% increase on last year's full year result.

The Australasian company today said it produced 268,602 ounces of gold at an average cash cost of $570 per ounce.

Earnings before hedging and income tax was US$55.4m compared to US$25.6m in 2009.

The company's cash operating margins also reached record highs, hitting $783 per ounce in the fourth quarter.

Other strong gains included earnings before interest, tax, depreciation, amortisation, exclusing gains or losses on hedges, of US$139.5m - a 31% increase on 2009.

The gold producer also secured C$115 million (NZ$155 million) in equity financing for its development of the Didipio gold copper project in the Philippines.

Chief executive Mick Wilkes said the results were a reflection on the leverage the New Zealand assets offered.

"With a solid production platform in New Zealand, as one of Australasia's largest gold producers, OceanaGold is well positioned to drive further growth in the business through the development of our Didipio gold and copper project," he said.

Earlier this week, OceanaGold announced it planned to spend at least US$9 million on exploration in New Zealand.

The company said its proven and probable reserves in New Zealand had risen to 2.15 million ounces of gold at the end of December.

That was up from 1.92m ounces a year earlier, and after the company sold 268,000 ounces of gold from its New Zealand operations during 2010.

OceanaGold said it had expanded its mineral reserves for the second year in a row.

Wilkes said that two years ago the company had a reported average reserve life of just 3.5 years at its New Zealand operations.

Now, the open cut operations were demonstrating seven to eight years of mine life with a respectable amount of reserves still growing at the Frasers underground operation and "tremendous" blue sky opportunities at Reefton.

By 5pm today, OceanaGold had added 33c to 400 on the New Zealand stock exchange.

The company is also listed on the Toronto and Australian stock exchanges.

NZPA

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