OceanaGold rallies on 20% Q4 production increase

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OceanaGold Corp. [OCG-TSX, ASX, NZ; OGDCF-OTC] shares rallied in active trading Thursday January 30 after the company reported a 20% increase in its fourth quarter gold production from key operations in the United States and New Zealand.

OceanaGold shares rallied on the news, rising 11% or 26.5 cents to $2.69 on volume of 1.85 million. The shares are currently trading in a 52-week range of $2.12 and $4.74.

OceanGold a is a shareholder of Canadian companies Nulegacy Gold Corp. [NUG-TSXV] and Gold Standard Ventures Corp. [GSV-TSX, NYSE], which both have gold projects in Nevada.

OceanaGold is also a multinational gold producer with operating assets that include the Didipio Mine on Luzon Island in the Philippines, the Macraes Operations on the South Island of New Zealand, the Waihi Gold Mine on New Zealand’s North Island and the Haile Gold Mine in South Carolina, U.S.A.

The company said its annual gold production of 470,601 ounces, included 108,151 ounces that was produced in the fourth quarter of 2019. That was in line with the company’s revised 2019 consolidated guidance of 460,000 to 480,000 ounces.

OceanaGold also posted annual copper production of 10,255 tonnes of copper, a number that was also in line with revised 2019 production guidance of 10,000 to 11,000 tonnes.

Gold production from the United States and New Zealand operations increased by nearly 20% quarter-on-quarter on the back of stronger production from Haile and Macraes.

Haile produced 46,420 ounces of gold in the fourth quarter, an increase of 26% from the third quarter of 2019.

At Macraes, the operation produced 172,475 ounces of gold, including 45,505 ounces in the fourth quarter. That marked a 20% increase from the third quarter of 2019.

Full year 2019 all-in-sustaining costs (AISC) of US$2,061/oz, included US$980/oz in the fourth quarter, and compared to 2019 revised guidance of US$1,040 to US$1,090/oz.

In the Philippines, the Didipio Mine produced 83,913 ounces of gold and 10,255 tonnes of copper in 2019 before processing was suspended in October. The company says it continues to work constructively with regulatory stakeholders related to the renewal of Didipio’s FTAA, which is currently under review with the Office of the President with no specific timeline on when a decision will be made.

An FTAA, or Financial and Technical Assistance Agreement, is one of two key forms of tenure for mining projects in the Philippines. They are a form of state agreement (entered into by the President of the Philippines on behalf of the Philippines government) for the large-scale exploration and development of gold and other metals.

The mine currently remains in a state of operational readiness.

Looking ahead, the company said it expects increased gold production with a continued decrease in AISC for 2020.  Production in the second half of the year is expected to deliver two thirds of the year’s gold output at significantly lower AISC than the first half. The variability in production and costs relate to mine sequencing, whereby mined and processed grades increase as the year progresses.

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