OceanaGold: good news from the mine

[elZorro]

OGC is nearly on the NZX50, look at the share go..

[adamcz]

Look at the asx, it's up 14c at the moment. Maybe something else is up as well. Usual problem hold/sell/hold/sell whatever I do it will be wrong

[troyvdh]

.....it could be said ...you are not wrong cobber....why the hell I never bought more than a few at 45 cents still keeps me awake at night...cheers

...I did sell some at 445 however...

[adamcz]

You got more sense than me... Still a while away til my average price. Shoulda sold when it was in the 5s but I got greedy. Still, didipio is looking better and better and q3 (fingers crossed) should show some decent profits us dollar has strengthened a few cents and av gold price should be 200ish more than last quarter provided it stays around these levels

[gonzo56]

i'm no better, i bought at 3.55 a while back. so back to square one today.

[elZorro]

Sounds like we're all slow learners with OGC. The ones who are posting anyway..
I just had a look on DirectBroking's NZX50 page. It's there all right, as NewOceana. Not sure why it has been called that. Note the big rebalancing trades showing this morning, as funds purchased some OGC. Some got a lot better deal than others.

[elZorro]

Here's a new presentation from the OGC website, some new pages there with a plan for 600,000oz/yr by 2016. First mention I've seen of a superpit at Macraes, more throughput needed. This would have to mean an expansion or backup for the autoclave system.

http://www.oceanagold.com/assets/documents/Presentations/2011-OGC-presentation-DGF-110920-FINAL.pdf

[adamcz]

Wow gold getting hammered down $97 at the moment would have thought gold would have continued in its uptrend as a safe haven with all the bad news coming out. Looks like OGC will be headed for $2.70 ish on Monday (based on the tmx price). For once i managed to sell at the right time, although i was lucky i was just expecting a smaller pull back after the buying for the NZX50 inclusion.

Found this interesting blog the other day Haven't got around to having a look over the financials to see some of the things he brings up. Found it a pretty interesting read
http://reminiscensesofastockblogger.wordpress.com/2011/08/31/oceanagold/

[elZorro]

Wow gold getting hammered down $97 at the moment would have thought gold would have continued in its uptrend as a safe haven with all the bad news coming out. Looks like OGC will be headed for $2.70 ish on Monday (based on the tmx price). For once i managed to sell at the right time, although i was lucky i was just expecting a smaller pull back after the buying for the NZX50 inclusion.

Found this interesting blog the other day Haven't got around to having a look over the financials to see some of the things he brings up. Found it a pretty interesting read
http://reminiscensesofastockblogger.wordpress.com/2011/08/31/oceanagold/

That's a top post adamcz, that investor had a very detailed look at the OGC operation and concluded it was cheap. Some really useful figures, lines up with the quarterly reports. I hadn't noticed that some overburden removal at Macraes revealed unprofitable ore, so they had to use another section, and expense the cost immediately on the books. The access to BMO reports is also good. The first chart I couldn't make sense of, the line through the middle being fair value? OGC is out to the cheap end of all goldminer comparison charts.

The poor sod, though, after all this research the current price is probably below what was paid for the stake. Bottom-feeders should once again see a multi-bagger run from OGC.

[elZorro]

More on expansion at Macraes, looks like a go-ahead for a Superpit has been achieved.

http://tvnz.co.nz/business-news/gold-miner-promises-600-new-otago-jobs-4418624

Hopefully we'll see more detail soon.

NZResources:


More jobs in East Otago with Macraes expansion26 September 2011
The expansion of operations planned by OceanaGold Corporation (ASX, NZX & TSX: OGC) was expected to create an extra 600 jobs in the East Otago region.
OceanaGold and the Department of Conservation have reached an agreement for expansion of the Macraes operation, guaranteeing a life of another 10 years.
NZResources reported this month that the gold miner was seeking consents that would allow for strip-out of the massive Frasers open cut and for mine expansion to the east of the mine, where the Frasers Underground mine was advancing into panel extensions and some higher grade zones.
The company’s chief operating officer Mark Cadzow told Radio New Zealand that the mine, which injects hundreds of millions of dollars into the economy, would create almost 600 new jobs with the expansion work.
He said the expansion should begin as soon as the resource consents are accepted by the Otago Regional Council and Waitaki District Council.
Work on the expansion was expected to begin before the end of the year.
Sources: NZResources.com and radionz.co.nz.

[adamcz]

Hasn't quite got the go ahead (although I'm sure that article seemed to imply it was all go).

http://www.odt.co.nz/news/dunedin/179965/miner-keen-not-have-pay-twice

Looks like should have (fingers crossed) a bit of news around the end of October with the super pit and Q3 results.

[gonzo56]

"Overall, there is a large upside in financial returns from a relatively modest capital outlay and we don’t believe there is any value currently recognised in our share price for Didipio."

Here is today’s announcement if people are interested: https://nzx.com/files/attachments/147400.pdf

[elZorro]

"Overall, there is a large upside in financial returns from a relatively modest capital outlay and we don’t believe there is any value currently recognised in our share price for Didipio."

Here is today’s announcement if people are interested: https://nzx.com/files/attachments/147400.pdf

Hi Gonzo, some good questions being asked (very politely though), and the replies are all good. Some workers were being poached, guess OGC needed to pay more. There is no mention of the fact that as soon as Didipio is paid off, the Philippines govt will get a substantial portion of the net profit there, as taxes and levies. Should still be plenty left over.
No immediate pot of gold by the look of it, but good solid results in the future. Re acquisitions Mick, why not GEL?

[gonzo56]

Yeah, the companyinsight.net.au interview is quite a good outlet. Exciting times for the company. I like the prospect of re-opening the Blackwater mine.

[elZorro]

So, OGC is happy with just a 20% share of Sam's Creek perhaps, along with a consideration of $1-2 million of shares in MOD. http://www.asx.com.au/asxpdf/20111013/pdf/421qch0s25z2g4.pdf

Interesting that the Chairman of MOD (Miles Kennedy, Aussie) also founded Macraes Mining 23 years ago. I guess OGC has learnt that stretching out the finances too much just leads to chaos. No matter what the prospects longer term might be. This will be interesting to follow. Might have a look at the MOD shares, but I suspect the big money has already been made...

Here's the start of it all, back in December 2010, a 300-400% SP increase per day while the setup was being done, a backdoor listing with cash-carrying MedicalCorp, now a resource developer. Miles Kennedy also ran Sandfire Resources. He's here with one of the Packers as an investor, etc. I guess we need to follow the money.


http://au.news.yahoo.com/thewest/business/a/-/wa/8551197/mod-flies-on-backdoor-listing-of-kennedy-vehicle/

Our very own Lizard spotted this one way back, all kudos to Liz.
http://www.sharetrader.co.nz/showthread.php?7174-Backdoor-listings-The-new-IPOs&p=330778&viewfull=1#post330778

I did buy some MOD yesterday, has some room to move.

http://www.sharechat.co.nz/article/8b10abf4/oceanagold-and-mod-resources-partner-up-for-sams-creek-gold.html

[elZorro]

More background from NZResources.com:


Miles Kennedy returns to NZ to explore Sams CreekSimon Hartley — 14 October 2011
http://www.sharetrader.co.nz/articleimages/2589/_thumbs/MilesKennedy.jpg (http://www.sharetrader.co.nz/articleimages/2589/MilesKennedy.jpg)
Miles Kennedy.

The slumbering Sams Creek gold project near Takaka in the Tasman district at the top of the North island, held by OceanaGold Corporation (ASX, NZX & TSX: OGC), is being sparked back to life through a joint venture with Australian company MOD Resources Ltd (ASX: MOD).
MOD's Perth-based chairman Miles Kennedy was founder of Macraes Mining Co in the late-1980s, which launched the Round Hill gold mine at Macraes and during his time there also secured the Reefton goldfield leases from Rio Tinto Ltd which also included Sams Creek to the north.
The operations went through two corporate changes after Kennedy left in 1993 and operated as GRD Macraes before becoming OceanaGold.
Sams Creek, in a remote and mountainous region near Takaka, has been held by OceanaGold since 1991 and barely rates a mention in recent annual financial reports, other than as a inferred resource estimated at 770,000 ounces; a figure reported since about September 2004 following test drilling.
At present Oceana own 100% of the Sams tenement, but a subsidiary of MOD will fund all exploration costs to earn up to 80% project-interest, and additionally give Oceana either 10 million or 17 million shares, valued at respectively $A1.6 M or $A2.72 M; depending on exploration outcomes.
Kennedy said a $A1.9 M drilling programme was scheduled to begin next month, incorporated with an aeromagnetic survey and a high resolution topographic survey.
"There is obvious scope for an increase in the [estimated] resource, both within the main zone prospect, where the existing 77,000 oz resource has been defined, and the various other targets along 6 kilometres of strike," Kennedy said yesterday.
In early-2003, when Oceana's predecessor GRD Macraes, was exploring the area it sent a red flag to environmentalists concerned the tenement was so close to the Takaka River in steep hill country covered by beech and kamahi forests, and bordered by the Kahurangi National Park.
Miles Kennedy has noted skills at negotiating with Government and environmental organisations, having reached an accord with the Department of Conservation when exploration began at Reefton.
A South African by birth he came to Australia as a practicing corporate lawyer and joined Robert Champion de Crespigny who went on to develop the Normandy Mining empire – that included the Martha mine at Waihi in NZ – that was later sold to Newmont Mining.
Miles Kennedy's father was the judge in South Africa's apartheid period given the task of sending Nelson Mandella to the gallows, but refused the Government directive – a point noted in Nelson Mandella's autobiography.
He joined MOD after the company undertook a major capital raising with some high profile media and business identities and transformed from the industrial sector to resources. It's first major acquisition was a copper project in the Kalahari sector of Botswana.
OceanaGold went on to develop its Reefton open pit West Coast operation and Frasers underground at Macraes and is at present committed to getting its Didipio gold-copper mine in the northern Philippines operational by the end of next year.
OceanaGold's chief executive, Mick Wilkes, said the partnership with MOD meant Oceana could maintain its exploration focus on its two most significant gold sites; Macraes in Otago and Reefton.
Sams Creek was a discovery made by Rio Tinto subsidiary CRA Exploration and was actively explored during the GRD Macraes phase when run by Len Jubber, but put to sleep when Steve Orr came with the creation of OceanaGold, and his focus was to get Globe-Progress developed at Reefton and underground mining started at Macraes.
NZResources.com's Mineral Resources data base shows that Sams Creek has an inferred resource of 13.3 million tonnes grading 1.89 grams/tonne which makes up the contained 770,000 oz of gold.
*Simon Hartley is senior business reporter for the Otago Daily Times.

[elZorro]

A new mention of a Macraes superpit being mooted, a widening of the pit confines and digging deeper, along with new process plant. Probably this would include an additional autoclave system, good backup for production. This looks more like it, there won't be any easier gold within a few years for OGC, apart from existing operations and Didipio (barring a takeover of course).

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10760062

A new digger, a bit smaller than the last one, has just been commissioned at Macraes.


Quentin has a big toy at Macraes19 October 2011
Machine operator Quentin Macleod jokes that he never got to play with a 250 tonne excavator in the sandpit at school.
MacLeod, a field service technician at OceanaGold Corporation, was referring to the latest addition to the company's fleet at the Macraes gold project.
The Hitachi EX2500-6 hydraulic excavator began work yesterday and while its size looked impressive, those working at the mine were used to big machines.
“It's just an excavator. If I looked at a two-tonne excavator, I'd think I haven't got a spanner to fit that, it's too small,” he said.
While smaller than its big brother, the 359-tonne EX3600-6 excavator, which is also working on the site, the EX2500-6 was still an impressive machine, with an equally impressive price tag -- about $6.8 million.
Powered by a 1,400 horsepower Cummins diesel engine, it held 5,000 litres of diesel, 378 litres of engine oil and 1100 litres of hydraulic oil and consumed between about 4,000 and 4,500 litres of fuel a day.
It also held about 300 kg of grease and fortunately an auto lubrication system eliminated the need for hand-grease guns.
Arriving in 11 transporter loads, it took CablePrice and OceanaGold staff about two and-a-half weeks to assemble on site. It did come with quite an in-depth assembly manual, they said.
It was packed with features, including a comfortable, pressurised cab for the operator with cameras that showed all corners of the machine, while folding stairs provided easy access to the machine.
A 15 cu m bucket was shaped specifically to enhance scooping and loading operations.
Source: odt.co.nz.

[elZorro]

The Macraes mining vision takes in a superpitSimon Hartley — 19 October 2011
http://www.sharetrader.co.nz/articleimages/2600/_thumbs/Fraserspitfromviewing1.jpg (http://www.sharetrader.co.nz/articleimages/2600/Fraserspitfromviewing1.jpg)
Frasers Mine.

New Zealand's premier gold miner OceanaGold Corporation (ASX, NZX & TSX: OGC) has floated a long term concept plan for a "superpit" open cut mining proposal at Macraes which could potentially increase the opens pits' estimated gold reserves by almost 70% to more than 2.6 million ounces.
OceanaGold yesterday stressed the superpit concept was long term, still being evaluated and a feasibility study was yet to begin, with many details of the size, scope and operational capacity of a superpit yet to be quantified.
OceanaGold was awaiting the outcome of a separate raft of resource consent applications from regional councils of Otago and Waitaki to continue its ongoing mining operations – in its 21st year of production.
In a presentation by chief executive Mick Wilkes at the Denver Gold Forum last month, he outlined the "Macraes Superpit Concept" where a larger open pit and new process plant could add an additional 100,000 oz of gold a year to production, plus separate tungsten by-product.
This calendar year Oceana has forecast South Island gold production in a range of 255,000 to 270,000 oz, but in tandem with a yet to be commissioned gold-copper mine in the Philippines, is targeting annual gold production to increase to 600,000 oz by 2016.
Wilkes said the superpit concept would mean an expanded open pit, a new process plant and higher mining rate and ore throughput to gain the 100,000 oz of gold per year.
There could be a possible increase of the estimated gold reserve in Macraes' open pits' from the present 1.53 M oz to 2.6 M oz -- a 69.9% increase.
The recent consent applications included a description of the "Macraes phase III project"; part of a long term plan to extend the mine's life from 2018 "to 2020 and beyond" by expanding present operations and reopening previously mined areas, OceanaGold said in its opening submissions to the resource consent applications.
"Today's high gold price means that previously mined open pits can now be mined deeper. Ongoing exploration may also further define new areas of economic interest," the company said.
OceanaGold's head of business development, Darren Klinck, was contacted yesterday and said the superpit presentation was a "concept" being evaluated in ongoing studies continuing into next year.
"Evaluating this potential opportunity is consistent with our strategy of ensuring we are looking at all opportunities within the organisation to unlock value within our current asset base," Klinck said.
Klinck said as a producer for 20 years in the Macraes goldfield, OceanaGold can allocate time and resources to ensure the company was thinking "outside the box," which is what it was doing with this project.
Oceana Gold's land-use consent requires mining at Macraes to end by August next year. It has sought a range of resource consents to allow it to keep mining, with release of a decision expected within weeks.
OceanaGold proposes to extend some operations, including expansion of the Fraser's underground mine, Frasers open pit and reopen areas previously mined, including the original open cut mine at Round Hill, opened in 1990.
Work would include establishing a new tailings storage facility, expanding some pits, reclamation and relocation of tailings from within a tailings storage facility, new waste rock stacks and extensions to existing stacks.
If a superpit were to go ahead, it was likely Oceana would have to enter a separate round of new resource consent applications.
*Simon Hartley is senior business reporter for the Otago Daily Times.


I guess the main Macraes permit has a deadline of next year. So lots of talking and submissions to NZPAM will be required.

[Vtrader]

Z,
What do the fundamentals say about OGC?
Sounds like OGC spending today for future returns...
RMA consent process, look what it has done for BTU, PRC and others...
OGC Chart is nearly back to the $2AUD
Perhaps time for a patriotic flutter?
Hang on... Higher lows and Lower highs is not an uptrend.
http://i949.photobucket.com/albums/ad333/VtraderNZ/OGC_21OCT.jpg
V.

[elZorro]

Hi Vtrader, I was surprised how abruptly sentiment changed for OGC last week, but a lot of goldies on the TSX went down with the metals prices looking to have peaked a while ago. I'm not worried about the RMA process for OGC, as they have a 20 year history at Macraes, and the region depends on them quite a bit. They appear to have been good stewards of the environment up to now. At which point the biggest bargain will be picked up is the question, but medium-term OceanaGold should do well. I've been a bit sidetracked with Glass Earth lately, waiting for good assay news there to boost the shareprice once again. Either of these companies would be a juicy takeover option for a big player, if gold holds its value over the next year or so.

[gonzo56]

A nice update today with 3rd Q results.

"...revenue for the quarter of $103.5 million from a record average gold price received of $1,706 per ounce. This represents a 9% increase on the previous quarter and a 24% improvement on the same period last year. Revenue for the nine months Year-to-date (YTD) 2011 reached $289.0 million exceeding the 2010 performance of $211.9 million by 36% driven by higher gold prices."

OGC on to it regarding the Typhoon in September; providing food relief to 1200 people affected. What they are doing for the community there is excellent; even sorting out education for their future employees in the Philippines.

[elZorro]

Hi Gonzo, yes, better results, still a reducing grade showing up at Macraes but the new expansions that are planned should improve that. Good to see links in Didipio being worked on.


September a stronger quarter for OceanaGold

Ross Louthean — 28 October 2011
The eyebrows that were arched over mine operating costs for OceanaGold Corporation (ASX, NZX & TSX: OGC) for the June quarter would have receded with yesterday’s announced performance for the September quarter.
The brighter figure came not from an easing in the cash operating costs but in the continuing improvement of the gold price to increase the profit margin.
The company reported an EBITDA (earnings before interest, taxes, depreciation and amortisation) of $US43.3 million ($NZ53.24 M), a 31% increase on the previous quarter.
The Company reported revenue for the quarter was $US103.5 M from a record average gold price received of $US1,706/ounce ($NZ2,097/oz). This represents a 9% increase on the previous quarter and a 24% improvement on the same period last year.
Revenue for the nine months of 2011 reached $US289 M, exceeding the 2010 performance of $US211.9 M by 36% driven by higher gold prices.
The Company’s cash operating margin was also a beneficiary of the higher gold price received during the quarter, reaching $US750/oz sold, a 20% increase on the previous quarter.
Gold sales for the quarter were 60,646 oz with cash costs of $US956/oz ($NZ1,175/oz), slightly higher than the previous quarter at $US921/oz.
OceanaGold said its Didipio gold-copper project in the Philippines also made solid progress throughout the quarter with construction activities “progressing to plan.”
By the end of the quarter, 90% of the senior management for the operations team were in place, as the company begins to establish the operating platform and team in advance of expected project commissioning in the last quarter of 2012.
OceanaGold’s chief executive Mick Wilkes, said the company’s performance was buoyed “by the strong leverage to a rising gold price.”
“We are pleased with the operational improvements we have achieved at Macraes and Frasers over the past quarter and continue to work on getting the Reefton operations back in line with expectations.
“Despite some weather related events at Didipio, progress there is tracking well and we are looking forward to achieving some key benchmarks such as pouring concrete at the project before the end of 2011,” he said.
OceanaGold said the third quarter saw the company post net earnings of $US10.9 M ($NZ13.4 M) which was a 163% increase on the previous quarter result of $US4.1 M and a YTD 2011 total of $US29.8 M ($NZ36.64 M). NZResources.



Sams Creek new partner moves quickly into drilling mode

Ross Louthean — 28 October 2011
http://www.sharetrader.co.nz/articleimages/2631/_thumbs/mileskennedy.jpg (http://www.sharetrader.co.nz/articleimages/2631/mileskennedy.jpg)
Miles Kennedy.

The Western Australian-based company MOD Resources Ltd (ASX: MOD), which has farmed-in on the Sams Creek gold project in the north west region of the South Island, will be starting a major drilling programme next week that should go through most of the summer.
It brings back to New Zealand Miles Kennedy as MOD’s chief executive about 25 years after he established Macraes Mining Co at Macraes – forerunner of today’s OceanaGold Corporation which is NZ’s premier gold producer and owner of Sams Creek.
While running Macraes, Kennedy purchased the Reefton goldfield properties and Sams Creek from Rio Tinto subsidiary CRA Exploration, but during the corporate progression from Macraes Mining to GRD Macraes and then OceanaGold, only limited exploration was carried out on Sams Creek.
Exploration on Sams Creek took place mainly during the period that Len Jubber was chief executive of GRD Macraes and this saw a rapid lift in resources to 13.5 million tonnes grading 1.7 grams/tonne gold using an 0.7 g/t cut-off – or a resource of 770,000 oz.
Kennedy told NZResources.com that this resource was in the main zone of 600 metres but the mineralised structure within the licence was considered to be about 6 km.
This drilling campaign involving nine holes will utilise already established drilling platforms in the elevated Sams Creek structure but these holes will be drilled in different directions to previous ones.
Kennedy said it was hoped the drill campaign, costing about $2.5 million would help increase the resource to about 1 M oz.
MOD has established an NZ subsidiary Sams Creek Gold Ltd, and the company has engaged Dunedin-based Paul Angus, a former Macraes Mining and GRD Macraes exploration manager, as senior consultant.
Last week MOD Resources announced significant new drilling results from its copper-silver project in Botswana.
Assisting the exploration programme will be MOD Resources executive director Derek Byrne who, in an earlier operating life, managed a relatively short lived project to access the main old shaft at Blackwater in the Reefton goldfield for OceanaGold.
The joint venture contains benchmarks for MOD Resources to earned staged interests of 40% and then 60% in the permit.
The total future consideration payable by MOD to OceanaGold will be between 10 M and 17 M ordinary MOD shares, conditional on future benchmarks being achieved.



Record gold price offsets lower production, costs for OceanaGold

Friday 28th October 2011




Record world prices for gold offset higher costs, adverse exchange rate movements and reduced extraction rates at its two South Island mining sites for OceanaGold Corporation in the three months to Sept. 30.
OceanaGold reported earnings before interest, tax, depreciation, and amortisation , excluding losses on foreign exchange and hedge contracts of US$43.27 million, compared with US$32.99 million in the second quarter, but only slightly above ebitda of US$42.61 million in the same quarter a year earlier.
The key difference was a rise in the average price for an ounce of gold for the quarter to US$1,706, compared with US$1,546 in the second quarter and US$1,232 in the same quarter a year earlier.
On an after tax basis, also excluding hedge costs, OceanaGold reported a US$10.91 million profit in the third quarter, taking year to date net profit to US$29.83 million, compared with US$12.11 million for the same nine months a year earlier.
Earnings per share stood at 4 cents, compared with 2 cents per share in the previous quarter.
Total gold revenue in the third quarter of US$103.5 million was up 9.1 percent on the second quarter, although production was down 1.1 percent, at 59,090 ounces.
Grams per tonne of ore mined were down too, at 1.12 grams per tonne, compared with 1.23 g/t and recovery rates of 82.5 percent were also below the average for the year to date of 83.1 percent.
“The company’s forecast has production expectations at the lower end of full year production guidance range of 255,000 to 270,000 ounces of gold,” directors said in the earnings statement. “Cash cost guidance of US$850 to US$890 per ounce also remains unchanged.”
For the quarter under review, the US$160 per ounce increase in the average gold price over the previous quarter expanded cash margins to US$750 per ounce, with an offsetting increase of US$35 per ounce caused by a stronger New Zealand dollar, fewer ounces produced and less capitalised pre-stripping.
While there was a 24 percent increase in ore mined at the Frasers Underground mine in the Macraes goldfield, heavy snow and lower ore grades meant total gold production from the field was 42,136 ounces was down on the 44,107 ounces produced in the previous quarter (49,732 ounces in the same quarter a year earlier).
At Reefton, grams per tonne or ore mined were also lower than in the past couple of years, at 1.7 g/t, with yields expected to increase as the Souvenir open pit development deepens and reaches higher grades.
The company had struggled to keep and attract skilled labour, and had increased salary packages accordingly.
OceanaGold’s Didipio development in the Philippines had suffered delays and one employee death as a result of tropical typhoons, but the senior management team was now almost all in place, worker accommodation is near completion and concrete pours are expected in coming weeks.
BusinessDesk.co.nz


Poised for the upturn? Net profit is not 10% of NPV or equivalent, but is looking like accelerating to that level.

[mistymountain]

With POG now consolidating its uptrend and OGC establishing some genuine growth opportunities in NZ and overseas 2012 should be a very positive year. Roll on the next quarter results...

[elZorro]

With POG now consolidating its uptrend and OGC establishing some genuine growth opportunities in NZ and overseas 2012 should be a very positive year. Roll on the next quarter results...

Gidday there MM, sorry about the slow response, I've been a bit bored with OGC, and the shareprice has been a bit flat. This from NZResources today, and for once there seems to be some journalistic input. Keep that up Simon.

Big lift in Frasers Underground resourcesSimon Hartley — 7 December 2011
OceanaGold Corporation's (ASX, NZX & TSX: OGC) mine-life extension received another boost with exploration results adding up to three years to its Frasers Underground operation at its Macraes mining operation.
In mid-June, 21-year-old OceanaGold announced its overall New Zealand operations were expected to be extended by seven to eight years into 2018-19.
Part of the mine life extension includes granting of on-going resource consents at Macraes to continue its mining operations, and Oceana is at present appealing recent Environment Court-imposed conditions, revolving around provision of a $2 million trust fund for the local community, but also an earlier proposal to maintain a heritage art park at Macraes once mining is finished.
This calendar year Oceana's forecast production is down slightly to 255,000-270,000 ounces, but combined with its development gold and copper mine in the northern Philippines, by 2016 Oceana was targeting annual gold production of around 600,000 oz.
Oceana chief executive, Mick Wilkes, said that overall gold resource estimates for Frasers Underground now stood at 745,000 oz; with the Panel Two area resource up 25% to 602,000 oz and the Lower Zone area stands at an estimated 77,000 oz resource.
"Frasers underground mine life is expected to extend to at least 2017," Wilkes said.
"The exploration programme over the past 12-months has been successful in considerably expanding the measured and indicated resources at Frasers Underground, and it is expected to extend the mine life at that operation by at least another three years," he said.
Wilkes said there would be on-going diamond drilling exploration in the Panel 2 area, both from underground and surface drilling, which would continue to "test the fringes" of the Panel 2 area.
In October, the Otago Regional Council and Waitaki District Council granted Oceana a number of consents enabling it to keep mining at Macraes, subject to conditions. However, late last month Oceana lodged an appeal to the Environment Court, claiming some of the conditions imposed on the resource consents to expand its Macraes mine site were "unnecessary and onerous."
Among them was the requirement to operate, maintain and promote the existing artworks and heritage items as part of an updated Heritage and Art Park Management Plan until at least 2030, in addition to the requirement to establish a $2 M trust, transfer assets to the trust and provide funds to support the wider community.
At present, if both parties agree, mediation could be the next step, but if they did not agree, a pre-hearing conference would be held prior to a new Environment Court date being set.
In mid-October, Oceana floated a long term concept plan for a potential "superpit" open cut mining operation at Macraes, which would require new, separate. resource consents to be applied for if it went ahead.
During an earlier investor presentation in the United States, Wilkes outlined the "Macraes Superpit Concept" where a larger open pit and new process plant could add 100,000 oz of gold a year to production, plus production of a separate tungsten by-product.
The superpit concept would mean an expanded open pit, a new process plant and higher mining rate and ore throughput to gain 100,000 oz per annum. There could be a possible increase of the estimated gold reserve in Macraes' open pits, from the present 1.53 M oz to 2.6 M oz; a 69.9% increase.
*Simon Hartley is senior business reporter for the Otago Daily Times.


I think we all know the big finances and superprofits that should result from any gold price increases, as long as diesel prices hold at something sensible. So I'm perturbed that OGC is heading to court over these permit conditions. These are positives, not negatives, part of a good story. That's what shareholders want. Best to keep your head down and comply, I'd think.

[elZorro]

Another NZResources article today. I hadn't bothered posting the press release from OGC. It was thinly disguised PR.


OceanaGold re-emphasises that Didipio will be a key contributorSimon Hartley — 19 December 2011
New Zealand’s premier gold miner OceanaGold Corporation (ASX, NZX & TSX: OGC) has tentatively forecast record gold production for the calendar year 2013 -- underpinned by its gold and copper development mine in the Philippines which is less than a year away from beginning production.
OceanaGold, along with most other major gold producers, has seen its share price undermined during the past fortnight by the decline in global spot gold prices which have passed down below $US1,600/ounce ($NZ2133/oz) to $US1,573/oz late last week.
Oceana's share price during the past seven trading days is down more than 18%, having fallen from $3.38 to around $2.76 on Friday -- with market capitalisation declining from $NZ887 million to $NZ724 M.
While the company has ramped up overall exploration funding, increased its resource estimates and is portraying confidence in the Didipio development, management is putting itself under increasing pressure to deliver results to the market in the near future.
In separate market updates released by OceanaGold chief executive, Mick Wilkes, he reiterated the expectation of Oceana delivering between 230,000 - 250,000 oz of gold from New Zealand operations this year, but raised the production bar to 300,000 - 350,000 oz during 2013, which will include about 70,000 oz from the Philippines.
Crucial to operations and profitability, cash costs of production per ounce this calendar year is expected in a range of $US900-$US980/oz while for 2013, with the Didipio operation in the northern Philippines underway, Wilkes said operating costs should move below $US500/oz.
He remained confident Oceana could achieve a target of producing 600,000 ounces a year by 2016 from all operations.
On the question of declining market capitalisation Wilkes said investors would soon realise Didipio would bring a “significant transformation” to Oceana.
“The current market capitalisation reflects little to no value for Didipio as we execute on our strategy to build it and establish a platform for growth in the region,” Wilkes said.
In his Didipio update, Wilkes said 480 construction staff were on site, plus management, about $10 M per month was being spent and exploration of adjacent prospects would accelerate next year; with production scheduled to begin in the fourth quarter.
Craigs Investment Partners broker Peter McIntyre said while Oceana's New Zealand operations remained “a standout'' for the year, Didipio as a new operation still carried risks.”
He said Wilkes was had clearly outlined operational expectations and where he saw value in company operations, but he had “drawn a line in the sand,” for the market and investor expectations.
While gold is usually a safe haven in turbulent economic time, investors had been profit taking from recent highs and it was possible some of the Euro-zone countries, many of which are historic holders of large amounts of gold, were possibly selling stocks to assist in shoring up their faltering economies.
*Simon Hartley is senior business reporter for the Otago Daily Times.


I'm not expecting much this side of Christmas, just wondering if the insiders are carefully set up yet, and when the next bull run for OGC might start. Certainly in the meantime energy costs are high, extraction amounts aren't changing, and the gold price is dropping.

[adamcz]

Reefton is supposedly supposed to be producing slightly higher amounts duet o higher grade processing sometime this quarter. Guess wont see how much change until the Q1 2012 results though every little increase helps. NZ dollar has also dropped around 10% to the USD over the quarter which should help reduce some of the costs.
Not sure if anyone else has been checking the oceanagold website but there are monthly pics of the didipio construction

[elZorro]

Reefton is supposedly supposed to be producing slightly higher amounts duet o higher grade processing sometime this quarter. Guess wont see how much change until the Q1 2012 results though every little increase helps. NZ dollar has also dropped around 10% to the USD over the quarter which should help reduce some of the costs.
Not sure if anyone else has been checking the oceanagold website but there are monthly pics of the didipio construction

Yep, it all looks very promising for 2012, most likely a double benefit for OGC as Didipio starts looking like a commercial runner and the cashflow comes in, and trusting that the world's economy continues to falter with high fossil energy prices, which will benefit the gold price. I have to say though, that we'd have been better off just buying gold over the last year or so, and selling each time a suitable gain appeared. But 2012-13 could be another big gain period for OGC.

[elZorro]

This from NZResources, more about MOD, who now have most of OGC's Sam's Creek.


Kennedy increases his gold exposure11 January 2012
Miles Kennedy, the first managing director of the Macraes gold mining operations who also acquired the Reefton goldfield for that company, has added a second gold project to his current group of Perth-based companies.
Late last year MOD Resources NL (ASX: MOD), which Kennedy chairs, took up a joint venture with OceanaGold Corporation (ASX, NZX & TSX: OGC) on the Sams Creek gold project in the north west Nelson region of New Zealand’s South Island.
This week another company under Kennedy’s management group, Resource & Investment NL (ASX: RNI) struck a deal to take over the mothballed Fortnum gold mine in the Glengarry Basin of Western Australia.
Miles Kennedy was the inaugural managing director of Macraes Gold Mining, the company that established the Macraes gold operations 21 years ago, but after several years, he turned his focus back to Australia to operate a diamond miner at Ellendale in WA’s Kimberley region, among other companies and projects.
The deal on Sams Creek will give MOD Resources the right to earn up to 80% of the project, and Kennedy told NZResources.com recently that the quest was not only to increase the known resource there, but to undertake detailed exploration on the known mineralised system in the area.
MOD has wasted no time, and the company is now undertaking some quantifying drilling, using drill pads in the high country at Sams Creek.
The Fortnum mine was first developed by Homestake Gold, a big North American miner with a big Australian profile that was taken over by Barrick Gold, and later operators included Perilya Mines whose main operation today is the main lead-zinc-silver mines at Broken Hill in New South Wales.
Fortnum was purchased by Resource & Investment for $A20 million ($NZ26 M) in cash and $A15 M worth of RNI shares. Under the deal with the vendor Bluecrest Mercantile Master Fund, the company will acquire all the issued capital of Grovernor Gold Ltd – the company geared for Fortnum.
RNI is viewing a blueprint to develop a mine within 12-18 months to produce about 50,000 ounces of gold annually at a projected cash cost of $A826/oz ($NZ1,073/oz).
Fortnum retains a gold processing facility with a nameplate capacity for treating about 1 million tonnes per annum. Fortnum has a JORC-compliant resource of 1.2 M oz, at a head grade of 2.2 grams/tonne gold.
News associated with companies mentioned in this article

MOD Resources Ltd (5 articles)
OceanaGold Corporation (130 articles)

[JBmurc]

FY2012 & FY2013 Production Guidance
As reported in December 2011, FY2012 production guidance has been set at 230,000 - 250,000 ounces of gold at cash costs of US$900 - $980 per ounce (assumes NZD/USD exchange rate of $0.80).
With the start of production at Didipio, preliminary FY2013 production guidance is estimated to be 300,000-350,000 ounces of gold at cash costs of less than US$500 per ounce (net of copper credits).

[gonzo56]

Cheers JB, can't wait!!

[elZorro]

Not a bad qtr report out today (http://tmx.quotemedia.com/article.php?newsid=47678872&qm_symbol=OGC), looks like OGC made a cash surplus of US$50mill on their mining for the quarter. Extra capital and overhead costs come off that, but not too shabby.

This from NZResources today..


Gold grades dip at Globe-Progress

Simon Hartley — 20 January 2012
New Zealand’s premier gold miner OceanaGold Corporation (ASX, NZX & TSX: OGC) did not attain its target production from the Globe-Progress open cut mine at Reefton.
Guidance for OceanaGold's full calendar year production from New Zealand operations was a “conservative” 230,000 to 250,000 ounces of production at a cash cost per ounce of $US900-$980/oz ($NZ1125-$1225/oz) per ounce, according to chief executive Mick Wilkes in a trading update earlier this week.
“Though the Macraes open pit and Frasers underground [mines at Macraes, in East Otago] have performed to plan, our expectations for the Reefton mine at the beginning of the [2011] year were higher than they should have been,” Wilkes said.
He said there was a “negative reconciliation” between mined gold grades and expectations from OceanaGold's geological model during 2011, particularly at Reefton, with the company being “more cautious on predicted grades,” though there had been more accurate reconciliations recently.
Craigs Investment Partners broker Peter McIntyre said Reefton's lower gold grades would have been “disappointing” for Oceana, but in the year ahead, gold and copper prices globally looked positive.
“This could be a good year for Oceana, but headwinds remain in the volatility of the [New Zealand] dollar," he said.
Mick Wilkes said Oceana's budgets had been struck using a “conservative” exchange rate of US80c and oil at more than $US100 per barrel.
He expected production and operating costs for this year to be similar to the past three quarters of 2011, but with production to “increase significantly” during 2013, when the Didipio gold and copper mine boosts production by 70,000 ounces of gold, plus copper, during 2013.
The year 2013 was also expected to see better gold grades recovered from the Macraes open pit, with total gold production at 300,000-350,000 oz, but operating costs expected to be below $US500/oz, because of copper by-product credits.
*Simon Hartley is senior business reporter for the Otago Daily Times.

[elZorro]

There might be a good report out on Sam's Creek soon..worth keeping an eye on MOD:ASX. Can't help wondering if Mr Louthean has shares in some of these..


Drilling advances on Sams CreekRoss Louthean — 25 January 2012
First results from the nine hole diamond drilling programme on the Sams Creek gold project in the north west Nelson region may be detailed by Perth-based MOD Resources Ltd (ASX: MOD) when it releases its December quarter report late this month.
MOD Resources wasted no time starting a quantifying drill programme on Sams Creek late last October after striking a joint venture late last year with owner OceanaGold Corporation (ASX, NZX & TSX: OGC).
The drilling programme of about 2,000 metres is more than half complete and up to six drill holes are now being assessed with core being sent for assay.
The drilling has focused on the area where OceanaGold and its predecessor GRD undertook drilling that established a resource of 770,000 ounces of gold.
MOD Resources can earn up to 80% in Sams Creek by sole funding exploration to establish a commercial resource.
The resource is within a strike of 600 metres on a structure known to have a strike of more than 6 kilometres.
In a recent presentation MOD Resources said intrusive-related gold deposits (IRGDs) like Sams Creek are often large – up to the 4 million oz range.
MOD Resources is chaired by Miles Kennedy who in the mid 1980s was managing director of Macraes Mining which started the Macraes gold project and then acquired the Reefton goldfield and Sams Creek from Rio Tinto subsidiary CRA Exploration.
The company has a dwelling in Takaka to support its exploration team and project manager Paul Angus is a Dunedin-based mining consultant who held senior positions at Macraes for many years, under GRD and later OceanaGold.
The company is using Golder Associates as a project consultant.
MOD Resources also has an advancing copper-silver project in Botswana, where it holds 8,300 square km in the Kalahari Copper Belt.

[elZorro]

Not that I've been looking, but not much has popped up about OGC lately. Its shareprice seems to be offering opportunities regularly, and it's dropping back at the moment. Here's an interesting chart, if it keeps going like this a simple equation gives you an average value: OGC (Canadian cents) = 0.145x Gold price (US$). This means that OGC is following gold like it should, no-one is selling out too much, but there's no immediate news to help it along.

[adamcz]

Annual results are due Thursday which should be interesting, hopefully get a nice resource update as well. Most importantly will be the commentary on how the construction at didipio is progressing although all looks like it is progressing on target:

OceanaGold sees supply deal for Didipio mine

Reuters
Posted at 02/10/2012 6:29 PM | Updated as of 02/10/2012 6:29 PM


MANILA, Philippines - Australian miner OceanaGold expects to sign an off-take agreement in six months with a trading firm for gold and copper from its flagship $350-million Didipio mine in northern Philippines, set to begin production at the end of 2012, a top company official said on Friday.

Chief Executive Mick Wilkes said the firm would spend up to $10 million for exploration projects this year around Didipio, in Nueva Vizcaya province, to boost the mine's output and extend its life beyond 16 years.

The mine has 1.68 million ounces of gold deposits and 229,000 tons of copper.

"We're in negotiations with a number of companies for an off-take agreement at present," Wilkes told reporters after speaking at industry forum in Manila.

"We will bring Didipio into production at the end of this year."

Mine construction is now underway and gold production will ramp up to 100,000 ounces a year by the end of 2014 from an initial annual rate of 18,000 ounces next year.

Wilkes declined to name the trading firms OceanaGold was talking to. It was previously in talks with commodities giant Glencore, which owns the Philippines' sole copper smelter and refiner PASAR, about supplying gold and copper from Didipio.

PASAR, or the Philippine Associated Smelting and Refining Corp, has shut its smelting and refining facilities after a fire in early January.

Wilkes said OceanaGold, which now produces gold from two mines in New Zealand, will use funds raised from shareholders to fund the Didipio project.

[elZorro]

Yes, having somewhere handy to offload the copper is one of their issues I guess. The PASAR plant is Swiss-owned, they're working to get it back up and running. http://www.abs-cbnnews.com/business/01/18/12/glencores-pasar-copper-operations-shut-after-fire . Not sure where the gold will be going, or how that is separated from the main copper ore. I think the first part of the diggings is mostly copper, should still be profitable. I'm not sure about this line:


Wilkes said OceanaGold, which now produces gold from two mines in New Zealand, will use funds raised from shareholders to fund the Didipio project.

What that means is: We delayed, put it on the back burner, talked about borrowing the amount, JV etc, waited for the shareprice to motor up on the gold price, and heavily diluted the share virtually overnight with a previously unannounced placement. Some of the big investors and insiders knew all this well in advance, and had sold down near the top. I guess it'll all be worth it in the end.

[elZorro]

Annual report out yesterday, Fairfax had this positive item (http://www.stuff.co.nz/business/industries/financial-results/6434382/Gold-price-bumps-up-miners-profit):

OGC seemed to respond overnight, partly the gold price helping it. Costs to mine each ounce have gone up quite a bit as many have noticed, annual production dropping hasn't helped that. I wonder if the bottleneck autoclave system at Macraes is getting worse with the lower grades. For some reason they don't seem to want to sort that out with more gear.

Cash seems to be holding steady, but some more spending planned for 2012, and Didipio commissioning will use up a fair bit of what's left. However the profit line will look better by 2013.

The full annual report has a new section 23: Related Parties, page 36, towards the end. This seems to be a new requirement: divulges what the directors and some executives received (as a group) in the way of compensation for the year. There are 7 directors including the Chairman, some of these are also on the executive. Non-executive directors (5) were set a higher aggregate fee of $830,000 at the last AGM ($166,000 each, was $110,000). Remember a vote on gifting away unspecified major chunks of the company to directors was abandoned.

In the 2010 year, the value of all director and senior executive fees/shares compensation was $4.024 million. For 2011, it's $5.818 million, a 45% increase.

A new presentation dated February 2012 gives lots of detail about Didipio (http://www.oceanagold.com/assets/documents/Presentations/2011-OGC-Corporate-presentation111216FINAL.pdf). All looks fine, OGC looks undervalued by the market, as per usual. Macraes to stay fairly flat in production for years yet. The website has also been tidied up.

[elZorro]

NZResources today:
Analyst sees OceanaGold cashed up for growthDene Mackenzie — 20 February 2012 A Dunedin-based stockbroker who follows the resources sector said while OceanaGold Corporation (ASX, TSX & NZX: OGC) did not quite meet its production and cash cost targets it was well cashed up and had strong reserves.Craigs Investment Partners’ Peter McIntyre was commenting on the reported profit of $US44.2 M for 2011 which was marginally below 2010.McIntyre said the Didipio gold-copper project, in the Philippines, was keeping analysts and investors intrigued.Once the project started, the copper production should easily offset production costs for the new gold project and provide a large free cash flow back to shareholders.OceanaGold chief executive Mick Wilkes said the Didipio project continued to make strong progress throughout the year.The company met key construction milestones, including starting the concrete pour, nearly completing the construction accommodation camp, mobilisation by the mining contractor to the site and the arrival of the first shipment of structural steel.All major construction contracts for the project had been awarded or were in the process of being tendered.“Our NZ operations posted relatively stable earnings in 2011 and continue to generate positive free cash flows,” Wilkes said.“With construction of the Didipio project progressing according to plan, and scheduled to commission in fourth quarter 2012, combined with exploration opportunities in New Zealand and the Philippines, the company is on the right track to achieve its strategic targets.”McIntyre said OceanaGold contributed greatly to the Otago and Dunedin economies and it was pleasing to see the company continue to report strong operating profits and cash flows.A presentation by the company to analysts and media showed a high degree of exploration in NZ.At Macraes surface drilling is testing potential extensions to mineralisation – targeting open pit and underground.At Reefton diamond drilling continued at Big River, 4 km north of the Reefton plant where a resource assessment was underway, while at Crushington, 4 km north of the plant seven holes were completed in the December quarter but no additional drilling was planned this year.At Blackwater, 15 km south-west of the Reefton plant a deep drilling programme was targeting ore systems to 1,270m depth, below the old mine, while at Happy Valley, 4 km south of the plant, assays were awaited from a diamond drilling programme.--extra reporting by Ross Louthean.*Dene Mackenzie is business and political editor of the Otago Daily Times

Fair enough, it's not looking too bad. This time last year I was predicting a change of Chairman to Jake Klein, and I got that wrong. At that stage Jim Askew had not completed a 5 year term. He has now. Here's the Board's updated charter:


4.2 Role of chairman
In accordance with clause 11.5 of the constitution, the Board has resolved to appoint a chairman and may determine the period of office.The chairman in place from time to time will be selected on the basis of relevant experience,skill and leadership abilities that the Board recognises from time to time. The Board at the first board meeting following each annual general meeting will consider the position of chairman. It is envisaged that the normal term for a chairman will be a period of five years subject to satisfactory performance.



Jake Klein chairs the powerful nomination and remuneration committee. The board rules were modified to accept that situation. In addition, the new Head of Human Resources is via Sino Gold and Eldorado (http://www.oceanagold.com/about-us/management/), so has probably worked with Mr Klein before. I just get the impression of ducks being lined up in a row.. which direction are we going in, that's the question.


The AGM is sometime in June 2012.
(http://www.oceanagold.com/investors-and-media/events-calendar/)

[elZorro]

Not such good news..might be a buying opportunity downside of this.

http://tvnz.co.nz/national-news/workers-exposed-mercury-4746510

[adamcz]

Probably find not much of an effect on the price the problem was 2 years ago now.

Some more pics are up on the oceanagold site of the didipio progress and a new presentation
http://www.oceanagold.com/assets/documents/Presentations/2012-OGC-Corporate-presentation-120224-FINAL2.pdf

Looks like everything is going to plan which is good to see and from the looks of the pics the commissioning should be in end november... only 8 months to go

Also read that the last royalty on the Globe Progress mine will be payable this year (currently 5,000 oz p.a.) as it should have produced 400,000oz (over its life) this year. I haven't really had the opportunity to confirm this

[elZorro]

OGC did drift down for various reasons over the week. It just doesn't look too great at the moment.

As many predicted, there have been buyouts in the mining sector in 2012 too. Quadra FNX, a big copper miner formed from the merging of Quadra and FNX mining, has been bought out by a cashed-up Polish mining firm. Quadra had no debt, valuation of about 3 billion. The announcement that it was the subject of a buyout offer seemed to take the market by surprise in late 2011, the share had drifted down a bit. Quadra (TSX:QUX) has just been delisted.

Bill Myckatyn was a co-founder of Quadra, CEO until 2006, and until recently was Vice-Chairman and Lead Director designate. He is a fairly new member on the board of OGC (April 2010).

He stated that he looks forward to helping OGC build from its already solid base. Hmm, cashed up now (http://www.investorpoint.com/stock/qux:ca-Quadra FNX Mining Ltd./insider/All Insiders/All Types/), maybe he'll be buying some OGC shares?


http://www.vancouversun.com/business/Quadra+Shareholders+billion+sale+Poland+KGHM/6180826/story.html

Background to the bid: not a huge offer. http://www.vancouversun.com/business/Does+KGHM+Quadra+stage+bidding/5831113/story.html

[elZorro]

Remember the merger of Conquest Mining and Catalpha Resources last year? Jake Klein and Jim Askew are heavily involved there, and the newly named Evolution Mining (ASX: EVN) is the result.

http://www.evolutionmining.com.au/companyBoardOfDirectors.html

They look to be producing as much gold as OGC by 2013. Where do they find the time.. Big Mcap, well over a billion dollars. Their trend looks a lot better than OGC's at the moment.

EVN news, 20th Jan 2012:
Meanwhile, Evolution on Wednesday also reported that MD Bruce McFadzean would step down, as part of the company’s ongoing management restructure following the merger. Going forward, the responsibilities of MD would now be combined into the executive chairperson’s role, which is currently being filled by Jake Klein.


Cheers, thanks for that work Bruce..


(http://www.evolutionmining.com.au/_content/documents/479.pdf)Mr McFadzean is still a director. The MD compensation was over $1mill per annum.

What's the bet that there will be some more good news from EVN towards the end of this month? http://www.sydneyminingclub.org/future_events.htm

See this post from last year about CQT: (http://www.sharetrader.co.nz/showthread.php?8389-CQT-Conquest-Mining-preparing-for-merger&p=344316&viewfull=1#post344316)

If Mr Klein took up those CQT shares for 30c, 27 mill of them, and swapped at 0.3 x EVN shares on the merger, he'd have at least 8.1 mill shares for $1 each. At the moment, on paper, he's possibly worth an extra $7 mill in just a few months (shareprice is A$1.90 now). I really should give up my day job.

I don't think there's any doubt that OGC's shares will move up quite a bit with Didipio producing. At the moment it's a sitting duck for a takeover or merger.

[adamcz]

Touch wood, but nice to see the SP hold up in all markets even with a $30 drop in POG overnight.

[elZorro]

News today, Jim Askew (via a company) bought about $100k of OGC back in February 2012 (http://www.asx.com.au/asxpdf/20120323/pdf/4256pbrtpgdf91.pdf)for A$2.45 each, off-market. Two things to note - the gold price dropping meant that he could have purchased cheaper later on, and it was the first notified change in his holdings since 2010. Sounds like (all other things being equal) if the gold price stabilises or moves up from here, Jim thinks OGC won't be going any lower for awhile, and it might be an accumulation opportunity. We'll see if Jim's right.


Mr. Askew, a mining engineer with extensive experience in property acquisitions, mine development, and mine finance, is President of International Mining & Finance Corporation, a private venture capital and investment group targeting international gold and base-metal opportunities.

In July 2011, this company also bought into about 6% of CRP, Chatham Rock Phosphate.

[gonzo56]

News today, Jim Askew (via a company) bought about $100k of OGC back in February 2012 for A$2.45 each, off-market. Two things to note - the gold price dropping meant that he could have purchased cheaper later on, and it was the first notified change in his holdings since 2010. Sounds like (all other things being equal) if the gold price stabilises or moves up from here, Jim thinks OGC won't be going any lower for awhile, and it might be an accumulation opportunity. We'll see if Jim's right.

Sweet, sounds good. :) He would be classed as the vital few right... http://www.amazon.com/Vital-Few-vs-Trivial-Many/dp/0471681954

[elZorro]

Sweet, sounds good. :) He would be classed as the vital few right... http://www.amazon.com/Vital-Few-vs-Trivial-Many/dp/0471681954

Yep, Gonzo, that's for sure. Jim has/had a few shares in CRP too, via the same corporate vehicle, these did a lot better. If I was jaded with the sharemarket (and today I am), I might suggest that what we have here with OGC is a normal buy/sell that went pear-shaped, it was off-market so who could tell. Maybe these trades are going on quite frequently. A corporation is one level of protection for what can be a private holding. Lots of entities with the words "corporation" in them, also hail from one of numerous tax havens.

[elZorro]

Ho hum, not a great deal of movement with OGC for quite a while. Back a year or two, a few on here were pointing out to me the rising cost of OGC's production. They were right to raise a flag to optimism.

From NZResources:

Investors look to stronger second half for OceanaGoldSimon Hartley — 30 April 2012
Crucial gold production costs for East Otago based OceanaGold Corporation (ASX, TSX & NZX: OGC) almost doubled on a year ago as plant maintenance costs and the high New Zealand dollar took their respective tolls.
For the quarter ended March, Oceana posted revenue of $US88.6 million ($108.5NZ M), earnings before interest and tax of $US23.2 M and after tax loss of $US3.86 M; the latter comparing to a $US14.7 M profit for the same quarter a year ago.
A year ago it cost Oceana $US687 to produce an ounce of gold, which then rose to $US947 in the quarter to December then to $US1,126 for the quarter to March -- the latter adjusted to combine administration costs of three different offices.
Gold production was down 23%, from 65,750 ounces in the quarter to December to 50,842 oz.
The company cited several reasons for the decline, including lower grade ore, planned plant maintenance, underground access restrictions and adverse foreign exchange movements.
OceanaGold retained its guidance forecast for the calendar year, of producing between 230,000 to 250,0000 oz at a costs of $US900 to $US980/oz, with the second half production boosted by better ore grades and return to normal underground operations.
“As a result of the higher production expected in the second half, cash costs are expected to be lower in this period assuming constant exchange rates,'' the company said.
Brokers from Forsyth Barr and Craigs Investment Partners are expecting improvements in second half trading, having been disappointed with the first quarter result.
Craigs' broker Peter McIntyre said while the quarter's result would have been disappointing for Oceana, it remained “in a relatively strong cash position,” at $123 M and construction work on its Philippines gold and copper development project was about half way complete.
“If gold holds around $US1,600/oz the [future] copper offsets will be a huge contribution to keeping production costs down,” McIntyre said.
Forsyth Barr broker Peter Young said Oceana's first quarter production was a “lowly” 50,842 oz, noting it was a 23% decline compared to the previous quarter and full year profit expectations were downgraded 48% to $US25.5 M.
"This low production figure meant cash costs per ounce blew out to $US1,126. Costs in absolute terms were slightly up, but that is more currency related than anything else,” he said. It was important that Oceana had maintained its full year production guidance of 230,000 to 250,000 oz, but Young estimated production volumes would be at the lower end, being 13,000 oz down to 238,000, which would affect after-tax profit.
*Simon Hartley is senior business reporter for the Otago Daily Times.


Looks like the company is so focussed on Didipio that they let the cashflow from home operations drop. There are ways round most bottlenecks and maintenance procedures. Guess we'll know when the share is about to take off again.

[elZorro]

Notice on the ASX today: Baker Steel have been selling shares in OGC all through April, after buying up in January this year. They made a good profit on the first block sold, but have helped pull the market right back by the end of April. The share price is dropping away from the gold price, and this is down to management also - not tweaking the NZ production data up. There are three mines in the SI, all of them having issues.

ASX:RCO looks to be a benefactor of future expansion on the West Coast.


Royalco dependency on Reefton royalty may grow
Ross Louthean — 2 May 2012

The royalty cash flow from the Globe-Progress gold mine at Reefton on the West Coast may have greater importance for Melbourne-based Royalco Resources Ltd (ASX: RCO).
Royalco said in its March quarter report that it had received income from three of 10 royalty interests it held and one of these was the Mount Garnet base and precious metals mine in Queensland, where owner Kagara Ltd had mothballed operations.
On Monday, the troubled Kagara was placed in voluntary administration and Royalco’s executive chairman Peter Topham commented that this royalty interest “is not considered material to Royalco’s ongoing activities and financial position.”
Meanwhile, in the March quarter the Globe-Progress royalty received 1,250 ounces of gold which, after NZ withholding tax was 1,062.5 oz.
The price of delivery for the quarter was $A1,565/oz which equated to $A1.663 M ($NZ2.118 M).
Topham said Reefton mine operator OceanaGold Corporation had provided encouraging updates on exploration with activity at the Blackwater and Big River prospects which were also subjected to a royalty entitlement.
“Scoping studies for Blackwater suggest an annual production rate of 50,000 oz per annum. If achieved and using the current spot price for gold, this would equate to approximately $A2.4 M per annum payable to Royalco,” the company said.

[elZorro]

I noticed yesterday that Van Eck (an outfit like Baker Steel?) has been buying more OGC. Seemed to help the share price along.

Today I received the voting papers for the AGM. Mr Askew and Mr Klein are still going for office, as expected.

The Performance Share Rights Plan is back on the agenda. Remember this was dropped last year, was not voted on. I've had a look at the two texts to compare them.

This time there is a cap in the amount of shares to be gifted in a year, of 6% of the company shares, it was 10%. However there is new wording restricting individual employees to a 5% cap and non-employees to a maximum of 1% of the company in total. That restriction wasn't there last time. There is also a subtle change in the wording about whether this plan applies to directors who are not employees.


2011: Whilst not anticipated, Directors of the Company may also participate in the PRP.

2012:Non-employee directors of the company may have limited participation in the PRP.