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Friday 31st July 2009 |
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OceanaGold Corp., the owner of Macraes goldmine near Dunedin, posted its second straight quarter profit as hedges against changes in the spot price of gold bolstered the bottom line and output rose from its New Zealand operations.
The mining company reported a profit of US$40.1 million in the three months ended June 30, from a US$12.1 million loss in the same period last year. The results include a US$49.6 million gain in the value of undesignated hedges, compared to a loss of US$10.4 million a year earlier.
The volume of gold sold in the quarter jumped 28% to 75,319 ounces, while sales revenue rose to US$55 million from US$53.1 million.
“The impact of non-cash charges for undesignated hedge gains and losses was influential between the periods,” the company said in its report. Production was in line with expectations though constrained by maintenance at the Macraes site.
Gold has been a volatile commodity in the year to date as it rose as high as US$997.30 per ounce in February on the New York Mercantile Exchange, from as low as US$810.35 per ounce in January. It recently traded at US$933.80 an ounce.
The company sold some 56% of its production at spot prices in the three months ended June 30, with the remainder delivered in “out of the money” hedges. It holds forward gold sales contracts for 144,255 ounces at $773 an ounce, undesignated gold put options for 124,788 ounces with an average exercise price of $1,000 and undesignated gold call options (sold) for 104,024 ounces with an average price of $1,062.
The stock slid 1.5% to $1.28 on the NZX in trading today, and has surged some 24% in the past three months.
OceanaGold raised A$24.2 million when it sold chess depositary receipts on the Australian stock exchange last week to fund exploration in the Philippines and strengthen its balance sheet, and it expects to generate enough free cash flow to meet all of its debt obligations when they become due.
The mining company has yet to replace chief executive Steve Orr who left at the end of June, and chairman Jim Askew is still acting as executive chair.
Businesswire.co.nz
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