OceanaGold taps investors for funds to boost exploration

Tuesday 21st July 2009

OceanaGold Corp., operators of the Macraes gold mine near Dunedin, will tap investors for funds as it seeks to raise capital to boost its exploration programme and improve its balance sheet.

The company plans to place up to the equivalent of 15% of its issued capital in the form of 24 million chess depositary interests, a security on the Australian Stock Exchange that allows international companies to trade on the local market. The placement will be offered through a book-build to institutional investors and will have equal rights with the company's existing CDIs on the ASX.

"The Placement will allow us to add significant value to OceanaGold as we build upon the operational and exploration successes we have already achieved at our three mines in New Zealand," said acting chief executive Marcus Engelbrecht in a statement.

"The opportunity to significantly extend the mine life of our New Zealand operations provides considerable upside for shareholders in the medium term." The company's shares have surged some 258% on the NZX in the past six months as it prepares to set a record year in gold production, and has profited from higher gold prices.

Gold futures for August delivery gained 1.2% to US$948.80 an ounce on the New York Mercantile Exchange on Monday.

The shares last traded at $1.45 yesterday, before they were halted in New Zealand and Australia pending the announcement. OceanaGold will use the funds to undertake an exploration and drilling programme around its existing operations in New Zealand, and to complete a feasibility study into Didipio gold and copper project in the Philippines. The company is due to report its annual profit on July 30.

Businesswire.co.nz

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