OceanaGold posts net loss on hedging

OceanaGold, operator of New Zealand's biggest gold mine, posted a second-quarter loss on unrealized hedges as energy costs rose.

The net loss was US$19.2 million in the three months ended June 30, from a profit of US$16.5 million a year earlier, the company said in a statement. Excluding the impact of hedge gains and losses, EBITDA was US$1.1 million, down from US$2.8 million.

OceanaGold, whose stock trades on the NZX and ASX, said it is on track to meet its 2008 production guidance of 265,000 to 275,000 ounces. Still, rising costs, especially for fuel, means the company has revised its cash cost guidance to US$560 to US$595 an ounce.

The company's statement of operations shows it took a loss of US$10.4 million on the fair value of undesignated hedges, from a gain of US$38.9 million in the same quarter a year earlier. Revenue from gold sales rose to US$53 million from US$22.6 million.

The shares have fallen 60% this year.

By Jonathan Underhill

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