OceanaGold: good news from the mine

[mistymountain]

Given the last OGC thread had the word "trouble" in it and since then the SP has gone from 0.18 to 3.25 in 16 months I thought I'd be bold and start a new thread to reflect:

1. OGC resource upgrades
2. Mined gold being sold on spot market
3. Gold selling above US$1100
4. Record gold production
5. A dimming down of the GFC
6. The SP appreciation

Trouble at the Mine doesn't quite fit.

A key question I have is:

based on fundamentals of gold prices at this level and current mining production is the SP a fair price or are we going to expect continued price appreciation?

Some analysis as opposed to opinionating would be appreciated

[JBmurc]

I think OGC will continue to grow on the back of a stronger gold price $4 not out of the question this year

[elZorro]

I think OGC will continue to grow on the back of a stronger gold price $4 not out of the question this year

Hi JB, I see the new bug in V-Bulletin has got you repeating yourself. No matter..

Looks like you may be right, look at the share this morning, up 10% already. Wait until lunchtime when the Aussies kick in.

[xynz]

I was interested in buying some OGC. But the quarterly numbers on page 7 of their 2009 "annual information form" (http://bit.ly/bL8qYc) shows a very disturbing trend. In the same year that they've become "100% unhedged", their total operating costs per oz of gold produced have risen by nearly 70%. During that time, total production slipped by 14% (from 84037 ozs to 72094 ozs) .

Q1 total operating costs: $444/oz (84037 ozs produced)

Q4 total operating costs: $750/oz (72094 ozs produced)

This is happening at the same time that the lower grade Macraes ore quality has dropped by about 25%. It looks like that led to a 30% drop in gold production for the same tonnage of Macraes mill feed that was processed.

During this time, the higher grade Reefton ore quality has remained stable. But from Reefton, it looks like they've gotten an 40% increase in gold production, for only a 10% increase in Reefton mill feed tonnage.

In Q1: 79% of production came from Macraes, while 21% of came from Reefton.

In Q4: 66% of production came from Macraes, while 34% of came from Reefton.

Overall, the total tonnage milled has remained constant, while gold production slipped by about 14%. There has been a significant shift in productivity, with the lower grade Macraes ores producing less and the higher grade Reefton ores producing more.

Even with the significant differences between the ore extraction processes for Macraes and Reefton, along with their different ore compositions: it sure seems odd that a 10% increase in Reefton tonnage, along with a 14% drop in overall gold production, would result in a 70% increase in total operating costs per oz.

If anybody can shed more light on that 70% increase, then I would sure appreciate it.

[troyvdh]

Thanks misty...gee do i wish that I had bought more than the few i got at 22 cents....I have to admit that the main reason i bought more was the fact that OGC had reached a high of $4.80.....besides I have ridden around the reefton site....and I have to say ...spending a boozy night with a few miners in reefton was an education.......with Pike......are the ozzies stupid and arrogant or what....anyways...cheers...

[elZorro]

Even with the significant differences between the ore extraction processes for Macraes and Reefton, along with their different ore compositions: it sure seems odd that a 10% increase in Reefton tonnage, along with a 14% drop in overall gold production, would result in a 70% increase in total operating costs per oz.

If anybody can shed more light on that 70% increase, then I would sure appreciate it - XYNZ

Good point, there was a big change. Reefton is now supplying 50% of the gold recovered, but all that ore has to be transported a long way. Macraes is dropping back in terms of ore grade, 1.31 g/t instead of 1.77 g/t. But don't despair: 1.31 is still well above the breakeven point for unhedged gold I'm sure, it's doing a lot better than another exploration company I could name.. Maybe OGC will look at processing the Reefton ore over there at some stage, saving costs by using a local facility?

[JBmurc]

the high NZD gold price must be great going forward 1615oz NZD spot

[xynz]

Good point, there was a big change. Reefton is now supplying 50% of the gold recovered, but all that ore has to be transported a long way. Macraes is dropping back in terms of ore grade, 1.31 g/t instead of 1.77 g/t. But don't despair: 1.31 is still well above the breakeven point for unhedged gold I'm sure, it's doing a lot better than another exploration company I could name.. Maybe OGC will look at processing the Reefton ore over there at some stage, saving costs by using a local facility?

Actually, Reefton is only supplying about 33% of the gold recovered in Q4:

Reefton = 24,624 ozs

Macraes = 47,470 ozs

Total = 72,094

Even if they have to transport it for processing, I still don't see how a 10% increase in the amount of Reefton Ore being transported and processed translates into a 70% increase in total actual costs.

[elZorro]

Hi XYNZ, oops, very poor maths on my part :mellow:

I can only offer the figure of 0.5g/tonne being a cutoff point for recovered gold in general, when the plant is right next to the mine. So transport costs could well be significant, no idea what they are per tonne transported? 20 tonne of Reefton ore would only hold say 60g or under 2oz gold, so two? extra handling costs and the transport fee itself would add up.

We need a mining expert on this query.

[xynz]

JBmurc has the following information in his/her sig:


In the U.S., it took nearly 200 years for debt to reach the $1 trillion level. Last year alone the debt was almost twice that and it’s now near $13 trillion. This happened in a relatively short period of time and all U.S. debt now amounts to about $250,000 per person.

http://www.youtube.com/watch?v=Wt1Lo...eature=related
the Obama deception
http://www.youtube.com/results?orig_...ig_query_src=2

He seems alarmed by the fact that, since 1976, the US debt has ballooned by over $12 trillion dollars. It makes him very concerned about something called the "Obama deception".

Why wasn't JBMurc concerned when the Republicans Ronald Reagan, George H W Bush and George W Bush were running up $9 Trillion of that $12 Trillion debt?

When he was President, Ronald Reagan Presided over a near quadrupling of US debt.

Under the Clinton Administration, things were finally turning around. Budget surpluses were reducing the debt.

George W Bush inherited those surpluses from Clinton. But Bush turned those surpluses into record breaking deficits and then nearly doubled the national debt. Bush and his "free market! deregulate everything!" cronies also ushered in the worst economic crisis since the Great Depression.

Now Obama has to clean up the mess left by Bush and Greenspan. The US economy was on the verge of another Great Depression collapse and according to Ben Bernanke, the only way to prevent it was to increase deficit spending.

After $9 Trillion of Republican debts and George W Bush's outgoing deficit of nearly $1 Trillion....JBMurc only finds his outrage AFTER Barack Obama becomes President.

JBMurc: IOKIYAR


http://en.wikipedia.org/wiki/United_States_public_debt

[xynz]

Hi XYNZ, oops, very poor maths on my part :mellow:

No worries Big Z, it's the kind of mistake that anyone could make.

You're right, there's no way to tell what's really going on, without some detailed explanations. IMHO, Due Diligence demands that we get those explanations, before we invest our $$$$.

[JBmurc]

JBmurc has the following information in his/her sig:



He seems alarmed by the fact that, since 1976, the US debt has ballooned by over $12 trillion dollars. It makes him very concerned about something called the "Obama deception".

Why wasn't JBMurc concerned when the Republicans Ronald Reagan, George H W Bush and George W Bush were running up $9 Trillion of that $12 Trillion debt?

When he was President, Ronald Reagan Presided over a near quadrupling of US debt.

Under the Clinton Administration, things were finally turning around. Budget surpluses were reducing the debt.

George W Bush inherited those surpluses from Clinton. But Bush turned those surpluses into record breaking deficits and then nearly doubled the national debt. Bush and his "free market! deregulate everything!" cronies also ushered in the worst economic crisis since the Great Depression.

Now Obama has to clean up the mess left by Bush and Greenspan. The US economy was on the verge of another Great Depression collapse and according to Ben Bernanke, the only way to prevent it was to increase deficit spending.

After $9 Trillion of Republican debts and George W Bush's outgoing deficit of nearly $1 Trillion....JBMurc only finds his outrage AFTER Barack Obama becomes President.

JBMurc: IOKIYAR


http://en.wikipedia.org/wiki/United_States_public_debt

Yes I am concerned of the current increase of debt in the US?

... when did I state that I only found it an outrage AFTER Obama an not before ?????????????????????????

-Did you even watch the below links an let you narrow view open..!

[xynz]

Yes I am concerned of the current increase of debt in the US?

... when did I state that I only found it an outrage AFTER Obama an not before ?????????????????????????

-Did you even watch the below links an let you narrow view open..!


Obama Deception: a Film by Conspiracy Theorist Alex Jones.

http://www.imdb.com/title/tt1558865/


Alex Jones believes that 911 was an inside job.

http://www.prisonplanet.com/911.html



Even the nutjobs at freerepublic think Alex Jones is a wacko. When even freepers think you're too far out on the right for them, then you are so far out there, you're about to fall off the planet.

http://www.freerepublic.com/focus/f-news/1013296/posts

"Alex ... Jones is your classic paranoid, Texan conspiracy nut. One of his big claims is that world leaders sacrifice children as part of an annual ritual at Bohemian Grove."

http://coedmagazine.com/2009/03/09/the-5-craziest-conspiracy-theory-nutjobs/


Alex Jones: "This is like something out of a Hollywood movie, where teenagers are out camping in the wilderness and come over a hill and witness some devil cult in black and red garb sacrificing some poor soul on a bloody altar."


http://www.infowars.com/bg1.html

[JBmurc]

Now Obama has to clean up the mess left by Bush and Greenspan. The US economy was on the verge of another Great Depression collapse and according to Ben Bernanke, the only way to prevent it was to increase deficit spending.

After $9 Trillion of Republican debts and George W Bush's outgoing deficit of nearly $1 Trillion....JBMurc only finds his outrage AFTER Barack Obama becomes President

LOL you attack me on a false presumption(Obama debt view) then start a new attack on me on -Alex jones- like I created the clip -Your one very narrow minded poster with an even narrower attack stance--I'm all for free media, free thoughts, an historical fact media -you seem to be all about attacking me on no facts & false presumptions what a winner!

P.S if you want to keep attacking my views plse man up an PM me or least take it to my off-discussion thread -Rothschilds,NWO etc
an keep the OGC thread clear

[mistymountain]

Hmmm

Not too sure how this got onto American Politics but I'm more interested in NZ gold.

More to the point as the POG now goes through US$1150 where OGC is valued in the next 6 months.

I figure one of the reasons for the SP collapse at end of 2008 was the mothballing of Didiopio. One thinks that in the next 3 years this project will be back on the agenda with a corresponding OGC revaluation.

[elZorro]

MM: yes, that was amusing though.. Re increasing cost of gold recovered: OGC does an intermediate processing of the ore at Reefton so they can transport concentrated aggregate via train and then truck to Macraes for final processing.

OGC was just granted/extended a mining permit near the Progress mine, one of the four opencast pits they run at Reefton. I have not done my homework on OGC, but I've come to the swift conclusion that going back a year or so, it would have been time well spent. It probably still is.

[geezy]

perhaps they intentionally increased cost per tonne? hehe

[elZorro]

Have a look at this analysis of OGC a year or so ago:
http://www.austock.com.au/pdf/OGC1.pdf

These "experts" saw no reason to buy OGC at that point. Of course a whole lot of people did climb in soon after, just not me..

At that point gold was only US$770 an ounce, so most of OGC's gold was at best, marginal to sell. Since then they've found another 10% of reserves, now have nearly 10Moz available, unhedged. If you assume that the POG will continue to be at about $1150/oz, or even rise (more likely), what valuation does this give OGC, forgetting Didipio for now?

If OGC could make US$350 clear/oz, say $500NZ/oz, that's $5 Billion of net profit sitting in the ground. That would value each share at nearly NZ$27.00 just by itself. :D

Now someone needs to tell me where my maths is wrong, it's all too easy.

New press release just out...more gold at Reefton.

https://www.directbroking.co.nz/DirectTrade/dynamic/announcement.aspx?id=2483557

[mistymountain]

Thanks elZorro. The good news just keeps coming and I appreciate your brief financial analysis too. $27 sp would be amazing and I think would need expansion overseas to justify but you never know... NZR used to be $60 ish before a rerating and likewise RYM approx. $12 before share split.

Slighty ahead of myself talking share splits but let the good news roll... Certainly beats HGD's lack of news and progress.

[corporateraider]

Even in my dreams I don't see $27. (Do they have 10M oz?) If the company can confirm in the next quarterly that they have controlled operating costs then I can see $3.50 in the near term..
Didipio will add production of 200k of gold equiv ounces. That could make the share price fly if they can fund it.

[corporateraider]

$3.50 Aust

[JBmurc]

If OGC could make US$350 clear/oz, say $500NZ/oz, that's $5 Billion of net profit sitting in the ground. That would value each share at nearly NZ$27.00 just by itself.

Don't forget the Taxes -Large Bonuses to management-Inflation of costs

but yeah OGC is a no-brainer best investment on the NZX

[elZorro]

Thanks JB, I think we're on the same page here. What matter we've all?? missed out on a 300-400% increase in the share in the last year (or most of it), when there's a very good chance there's another ramp like that, still to play out. OGC was on TV1 in the ASB business section today, Reefton news.

That link to the Austock analysts seems to be a poor one..here's the conclusion that was reported by the company in March 2009.


Outlook / Investment View
Didipio had always been the core project that underpinned our positive view on Oceana, stemming from the days when it was the primary asset within Climax Mining. Without any upside from Didipio, all that remains are the low-grade, high-cost assets in NZ, which are hampered in the near-term by an out-of-the-money hedgebook and high debt levels. OGC is leveraged to the gold price, but actually requires a higher gold price in order to deliver any positive earnings or cashflow. We do not believe there is now any compelling reason to hold the stock. :ohmy:

Analyst: Hunter Hillcoat+612 9233 9604

In his favour, he did point out some obvious factors that would improve the situation.

Corporate Raider: yes, OGC has 10Moz here locally if you add proven, probable and inferred levels from all of the sites. But the grade is also important. Some of these sites have gold grades well above 2g/tonne, and it's very easy to make top money from those. :cool:

[JBmurc]

Thanks JB, I think we're on the same page here. What matter we've all?? missed out on a 300-400% increase in the share in the last year (or most of it), when there's a very good chance there's another ramp like that, still to play out. OGC was on TV1 in the ASB business section today, Reefton news.

That link to the Austock analysts seems to be a poor one..here's the conclusion that was reported by the company in March 2009.



In his favour, he did point out some obvious factors that would improve the situation.

Corporate Raider: yes, OGC has 10Moz here locally if you add proven, probable and inferred levels from all of the sites. But the grade is also important. Some of these sites have gold grades well above 2g/tonne, and it's very easy to make top money from those. :cool:

Well I did invest some mates money into OGC asx at 56c so indirectly I've enjoyed the run up an are looking forward to seeing OGC head higher from here like he is,

[elZorro]

JB, you should have some skin in the game, doesn't look like a lot of risk to me :)

http://www.nbr.co.nz/article/oceanagold-sells-out-hedge-contracts-margins-increase-200-120921

This is still fairly fresh news, best to have it here on the new thread. Have a look at the comments at the end of the article, it would seem I'm not the only optimistic shareholder. OGC will look even more terrific on paper when the extra cash starts rolling in. Those overheads and interest payments will be well down the priorities list. And now we wait for the Aussie market to start..

[elZorro]

This is slow to load up, but worth it: an indepth comparison of OGC in December last year, compared with other mid-cap miners. A buy recommendation, well undervalued, was the call.

http://www.scribd.com/doc/23738127/OceanaGold-corp-Dec-2009

Compare Newmont: 91.9Moz P&P reserves, Mcap $25 Billion similar to total assets
or Barrick Mining, 140Moz P&P, with Mcap of $40 Billion
Note both of these companies have a market cap of around US$275 per oz of P&P gold. :cool:

OGC is also listed on the TSX, with some big volumes being traded there (often bigger than on the ASX). OGC is a popular thread on the Stockhouse Forum, with over 200 reads per post (here, there are about 40 reads/post). All of these posters are keen on the share, with some quite good analysis backing up their opinions.

http://www.stockhouse.com/Bullboards/SymbolList.aspx?s=OGC&t=LIST&f=26&l=50&c=2&r=0

[elZorro]

The OGC website has a page dedicated to the levels of its in-ground resources.

http://www.oceanagold.com/index.php?option=com_content&view=article&id=111&Itemid=176

This makes great reading because the grades (cutoff and actual) are all mentioned too. This was last
updated 31/12/2009, so the actual figures are improved, based on press releases.

OGC had 1.94Moz Proven and Probable Reserves (see reserves chart) in NZ, and 1.65Moz in Didipio. Leaving Didipio aside, US$275 x1.94M = NZ$760mill Mcap (crude estimate of value). Add another $650mill value if including Didipio P&P.

OGC also has another set of figures for Mineral Resources (which include these Reserves) I guess measured
another way. This gives 6.79Moz (historical) of Measured, Indicated and Inferred in NZ mines, and another
2.37Moz in Didipio, total 9.16Moz.

As the POG goes up or holds, OGC is adding to their resources by expanding the pits, as they are now
profitable at the lower grades. They are also spending cashflow on more drilling and as we have seen, are
coming up trumps very regularly.

I also saw mention elsewhere, that mid-cap miners can be valued at 10x -15x of cashflow (Gross profit on gold sales). Now that figure will be a lot healthier next time it's reported, as it'll be unhedged.

Can someone please explain: OGC shares are being traded on three exchanges.

NZX: 185,886,743 shares reported (Direct Broking) (100k-600k volume)
ASX: 228,000,392 shares, same as on the OGC website (200k-4mill volume)
TSX: 227,894,000 shares showing. (volume 300k-4mill per day)

Do some sites just have the incorrect figure? Assume all shares the same..

[elZorro]

The press release on Reefton that was posted here, missed out on all the diagrams. Here's a better version.

http://www.oceanagold.com/images/documents/files/100412_reefton_exploration.pdf

Those gold grades and widths are on the higher side, it even looks like in one case the ore body could be "surgically removed" without having to strip away the overburden first. If so, that's more dollars in the bank, and the revaluation of the resource hasn't been completed yet.

I like the way OGC has plenty of geologists on the job (13 or more) and the pace of their work is terrific, there's a lot of graft going into these figures.

OGC up 3% or more on the TSX last night, after dropping back the day before.

[elZorro]

It's been quite a while since I read as positive a report as the one about OGC's Reefton permits.
I've bolded some of the more interesting areas of a cut-down report.


HIGHLIGHTS (From Reefton, 12 April 2010)

• Drilling programs have identified mineralized extensions at Souvenir and General Gordon deposits
which are likely to result in increased reserves and pit expansions. Follow up drilling at these
identified areas is already underway.
• Mineralized extensions were also intersected at the Empress 1 deposit with further work planned to
examine potential underground mining opportunities.
• Following intensive mapping and geochemical sampling programs, six additional highly prospective
near mine targets have been identified along the mineral trend. A drilling program focused on these
targets has commenced.

Souvenir Deposit
Table A below provides a summary of selected intercepts from the reverse circulation (RC) infill drilling
program at the Souvenir deposit. Highlights include 14 metres @ 6.90 g/t at RRC0068 and 12 metres @8.26 g/t at RRC0072. Given the success of this program, a 12 hole follow up RC drilling program was recently commenced.

Based on assay results to date, an increase to reserves and a subsequent expansion of the Souvenir open pit is expected. The extent of the revised open pit will be determined once the new zones of mineralization at depth have been determined by the current drilling.

At the Empress deposit, the brownfields drilling program targeted extensions to mineralization at depth. A two-hole diamond drilling program (Table B) was undertaken with results indicating a strong mineralized package continuing at depth (e.g. 18 metres @5.56 g/t gold at RDD0077) and below the current planned open pit limits. This feasibility of mining this area by underground methods will be evaluated.
Since commencing the brownfields exploration program during the second half of 2009, OceanaGold has
significantly increased the size of the Reefton exploration team which now comprises 13 geologists and field assistants. The Company holds permits over greater than 95% of the historic two million ounce hard rock production goldfield which stretches for more than 30 kilometres.

-Programme-
1. Diamond Drilling of six near mine highly prospective targets commencing this month;
2. A five man team undertaking grid line regolith geochemical sampling over the next 14 most
prospective targets commencing this month;
3. Reefton Geologists will be focusing later this year on the historic high production Capleston,
Crushington and Big River goldfields to identify both regolith sampling and drill targets.

Most historic mining in Reefton was from high grade underground operations with head grades from 15 to 34 g/t gold. These deposits were traditionally narrow veined structures that were discovered at surface and mined down dip. The immediate focus of OceanaGold’s exploration program is to identify extensions within the current open pits as well as near mine satellite pits. Using modern technology and advancements in geologic understanding we aim to identify other large deposits not exposed at surface and much like those historically mined in the region.

Paul Bibby, CEO commented, “These encouraging results from Reefton, combined with the more than
120,000 ounces of reserves that were added in December 2009, are a very good start to this brownfields exploration program. With the majority of the new mineralized extensions being open at depth, combined with the ongoing brownfields drilling and focused near mine potential, we are very excited about what the future may hold for the Reefton gold mine.”

Mr Jonathan Moore, B.Sc (Hons) Geology and Dip.Grad. Physics, is the Principal Resource Geologist with
Oceana Gold (NZ) Ltd and is the Qualified Person under National Instrument 43-101 – Standards of Disclosure of Mineral Projects (“NI 43-101”) for the technical disclosure in this release and has verified the data disclosed, including sampling, analytical and test data underlying the information contained in this release. Based on the current interpretation, the assay intervals as presented are believed to represent true thicknesses.

I think we can all predict what will happen to OGC's valuation when the numbers get crunched on this data. There's no question that the gold will be highly profitable to recover, the grades are so high. I guess it's just a case of knowing the volume of it that is present.

[corporateraider]

Gidday elZorro

I too liked the report but I believe that only the confirmation of an increased resource will move the share price.

[elZorro]

Gidday elZorro

I too liked the report but I believe that only the confirmation of an increased resource will move the share price.

Hi CorporateRaider: yes, I take your point, OCG is not a small share that can get whipped into a frenzy. Oceana are prompt with their reports though, I'm looking forward to the end of next week. There should be some new figures we can work with.


OceanaGold Q1 2010 financial results conference call / webcast
/NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES AND NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES/
MELBOURNE, Australia, April 19 /CNW/ - OceanaGold Corporation's financial and operational results for the quarter ended 31 March 2010 will be released following the close of the ASX market on Thursday 29 April (Melbourne time) and will be posted on OceanaGold's website at www.oceanagold.com .

The Company will host a conference call / webcast to discuss Q1 2010 Financial Results. The call will take place at 7.30am on Friday 30 April (Melbourne time) / 5.30pm on Thursday 29 April (Toronto time).

Webcast Participants
To register please go to the "Bulletin Board" section in the Company's website (www.oceanagold.com) or copy and paste the link below into your browser:

http://w.on24.com/r.htm?e=205881&s=1&k=977D1B7CB93C97F29741E000350196F9

Teleconference Participants (required for those who wish to ask questions)
Local (toll free) dial in numbers are:
Australia: 0011 800 287 011
New Zealand: 00 800 450 745
Canada & North America: 888 231 8191
All other countries (toll): + 1 647 427 7450

Playback of Webcast
If you are unable to attend the call, a recording will be available for viewing on the company's website from 9.30am on Friday 30 April (Melbourne time) / 7.30pm on Thursday 29 April (Toronto time).

[elZorro]

The appointment of a new director to the board has caused some interest over on Stockhouse: they see it as linked to a possible renewed effort to get some progress at Didipio in the Phillipines. This large gold-copper mine is not really factored into the share price at the moment, and is one of the reasons why I wouldn't be surprised to see OGC double in value within a fairly short time.

http://www.infomine.com/index/pr/Pa877218.PDF

[Sideshow Bob]

They still seem to be progressing. A mate of mine who works for them is heading up there in the near future.

[elZorro]

They still seem to be progressing. A mate of mine who works for them is heading up there in the near future.

Hi SSB, I need to do some research on Didipio, it's quite important in adding to the valuation estimates, and share price. The Canadians have been having another look at that too..

http://www.stockhouse.com/Bullboards/MessageDetail.aspx?s=OGC&t=LIST&m=28176077&l=0&pd=0&r=0


Oceana Gold is a turnaround story missed completelyby the market. After a very difficult year in 2008, when the Oceana Gold wentdown as low as 13 cents CDN, it is now emerging as one of the best run andattractive companies in the mid-tier group. Even though the stock had a good run, itis still very much undervalued compared to its peers.

The following Table, which provides a comparison between Semafo and OceanaGold, clearly shows how undervalued Oceana Gold is when compared to Semafo. The analysis provided here confirms the fact that many in this forum had emphasized again and again before – how underpriced and undervalued Oceana Gold is in comparison to its peers. Particularly glaring are the estimated values of ‘Market Cap/In Situ oz, and EV/EBITDA for these two stocks. Also as Roland pointed out earlier, significant exploration potential exists both in the existing mines and at Didipio, which can easily increase the in situ value of Oceana Gold. Once the market realizes this, Oceana Gold with its hedges now removed, could easily double from the current levels.


Comparison– Semafo vs Oceana Gold



Company Description Semafo Oceana Gold

O/S MillionShares 250.7 228

Reserves + Resources (m. oz) 6.6 9.17 (+)

Production 2009 oz 242,000 300,000

Cash Cost 2009 $463 $411

Production 2010 oz 235,000 – 260,000 270,000 - 300,000

Cash Cost 2010 $485 - $520 $455 - $495

Share Price $5.98 2.48

Market Cap (million CDN) 1499 565

Market Cap/In Situ* oz 225 62

Net Earnings - 2009 $43.5 m $54 m

EPS - 2009 .18 0.32**

Cash in Hand $60 million $30 m.

EV/EBITDA - 2010*** 10.36 5.82

* Reserves+Resources
** Excluding Hedges
***Peer Group 9.87

I feel one of the major reasons for the undervaluation of Oceana Gold is the lack of publicity and awareness about this stock amongst the Canadian investment community. In the past six months therehave been many reports from analysts from the following financial services firms about Semafo – Thomas Weisel, Blackmont Capital, Jennings Capital, BMO Capital Markets, Clarus Securities, Scotia Capital and Haywood Securities. ForOceana Gold, however, only report in the past six months came from the analyst fromThomas Wiesel and that too in November, when Oceana Stock was traded as a penny stock (See Baystreet.ca).

Please do your own DD before investing.

[mistymountain]

Thanks to all you posters on the Didipio update there.

This is one of the aces which will be dusted off at some stage.

With the GFC sliding by I was hoping the the Didipio project might come back on the agenda.

[elZorro]

A link to a Stockhouse post that I thought was interesting.

http://www.stockhouse.com/Bullboards/MessageDetail.aspx?s=OGC&t=LIST&m=28183501&l=0&pd=1&r=0

The US still printing money, the noted stability/POG increase during the recent meltdown, these are all useful pointers to gold stocks of some kind in the investor's mix. But even better is to find a stock that is undervalued (by how much: wait until April 30) and a stock where brownfields exploration is working very well with subsequent Proven and Probable reserves going up faster than they can mine it. I'm not worried at all about this investment.

[elZorro]

Quarterly results are out..

http://www.asx.com.au/asxpdf/20100429/pdf/31q1fdmv4bmjhk.pdf

http://www.asx.com.au/asxpdf/20100429/pdf/31q1f9jsk3r1g6.pdf

The reasons for higher costs per ounce and lower production are spelled out. However, nothing should stop the next quarter from being a very good one.

An interesting day's trading for the 29th April (OGC):

NZX finished NZ$3.40 vol 12,500
ASX finished $2.63 NZ$3.37 vol 184,603
(Then, Quarterly reports posted)
TSX finished $2.50 NZ$3.46 vol 828,198

Which does tend to reinforce the idea that Canadians favour gold industry shares. And that our market is smaller.

[elZorro]

Some on the TSX are already starting to do some calculations:

http://www.stockhouse.com/Bullboards/MessageDetail.aspx?s=OGC&t=LIST&m=28190306&l=0&pd=0&r=0

If I read the report correctly, the cost per oz recovered will drop from $550 if the plant keeps going as expected after its repair. There should also be plenty of ore stockpiled nearby to work through.

But even rough figures, assuming POG holds at least, are not much short of spectacular. :cool:

[geezy]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10641713

more good news for OGC holders :)

[elZorro]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10641713

more good news for OGC holders :)

Thanks Geezy, here's a reporter's take on the Q1 report, in Scoop.co.nz yesterday.


Oceana Gold closes out loss-making hedges
Friday, 30 April 2010, 11:46 am
Article: Businesswire

Oceana Gold closes out loss-making hedges for weak first-quarter result
April 30 (BusinessWire) - Oceana Gold Ltd. has taken a one-off C$73 million hit to its balance sheet, using the bulk of the C$86.3 million in recent equity-raising to close "out of the money" foreward hedge contracts that had begun to weigh subtantially on the Australasian goldminer's results.
Also hitting the results for the three months to March 31, released this morning, were expected reductions in production owing to mining sequencing, and unanticipated repairs to processing equipment at the Macraes mine.
The company has been selling all gold into the spot market since April 1 and expects a much "cleaner" earnings profile now that its hedge position has been unwound. Oceana shares rose 2.35% to NZ$3.48 in trading on the NZX this morning.
The company reported a US$1.8 million net profit, including US$16.2 million unrealised gains on undesignated hedges, compared with a US$9.1 million profit for the same period a year earlier, which included unrealised losses on undesignated hedges of US$2.3 million.
That yielded earnings of 0.1 U.S. cents per share (6 U.S. cps in the same period a year earlier). Earnings before interest, tax, depreciation and amortisation were US$8.5 million, compared with US$31 million in the same quarter a year earlier.
Negative cashflow from operations of US$10.3 million for the quarter compared with a cash-positive US$23 million in the March quarter of 2009.
Gold sales for the latest quarter were down substantially at US$48. million (US$55.2 million), representing 65,041 ounces, down 22.3% on the same quarter a year earlier, caused by lower recoveries because of mining sequencing at the Macraes mine, as well as unexpected repairs to the Macraes autoclave equipment.
"Revenue was also impacted by a decrease in the average price received as 78.4% of production was sold into 'out of the money' hedges and call options," commentary on the accounts said. "In Q4 and Q1 approximately 35% of production was delivered into hedges."
To end this problem, Oceana used C$73 million from the proceeds of a C$86.3 million equity raising to close out all remaining undesignated forward hedge contracts for gold sales on March 31, as well as undesignated gold call options outstanding at that date. It continues to hold undesignated gold put options over 61,500 ounces with an average price of NZ$1,000.
As a result of the hedge impact, the average gold price received in the quarter decreased to US$743 million, while cash costs of production per ounce were high at US$551, because fixed costs remained stable despite variability in mining output.
The company said it was making good progress increasing per tonne gold recoveries from its New Zealand mines, with 2.63 grams per tonne achieved at Reefton (2.06 g/t a year earlier), and 1.22 g/t at Macraes, which is up slightly on Q4 average recoveries, but well down on a year earlier when recoveries were running at an average 2.28 g/t.

[elZorro]

Not sure how much the new Aussie taxes will effect OGC. But more top knotch grades have been found in the existing pits. Some bargain shares on the NZX or even the ASX at the moment. Our press release is a bit brief.

http://www.asx.com.au/asxpdf/20100503/pdf/31q40w1sllmrsm.pdf

[Sideshow Bob]

I would have thought this would have caused some excitement....

http://www.stuff.co.nz/business/industries/3651847/OceanaGold-discovers-new-gold-deposits

OceanaGold has announced a "very promising" discovery of additional gold-bearing rock at its Frasers underground mine in Otago.

Highlights included intercepts of 13 metres at 6.78 grams of gold per tonne and six metres at 5.08 g/t had been discovered during a surface diamond drilling programme, in a downdip extension of current underground mining operations.

OceanaGold shares were down 3.79 per cent shortly after the announcement at $3.30, with the Melbourne-based company possibly suffering negative Australian investor sentiment following the Rudd government's imposition of a super-tax of 40 per cent on extraordinary mining company profits.

The miner said the latest discoveries also appeared to extend beyond the Panel 2 resource boundary, which is currently being mined.

The finds were "likely to result in a development extension to the underground exploration drive for better access to these new areas for infill drilling.

[elZorro]

Hi SSB: Yes, well I'd have been buying today, except I spent my budget earlier, assuming the trend was my friend.. But this time I won't be giving up easily, as the cashflow will soon get the attention of anyone having a look at OGC. I wonder how wide those thick seams of gold are..

I have noted that while the market has dipped a bit in the last few days, the POG has gone up.

[elZorro]

More good news: the Canadians relate that OGC pays tax in NZ, and the 40% tax in Aussie won't apply.


Oceana Gold test drilling 'promising'
Home » News » Business
By Simon Hartley on Tue, 4 May 2010
News: Business | Oceana Gold | gold mining
Test drilling by Oceana Gold, next to its underground operation at Macraes in East Otago, has delivered "promising results" of "significant" gold grades from its latest drilling programme.

Chief executive Paul Bibby said, in a statement to the market yesterday, the drilling results were "very promising" and the drilling results showed "the likelihood of additional mineralised panels" along the boundaries of what was being mined underground at present.

The results had prompted follow-up test programmes in the area, he said.

Mr Bibby highlighted two of eight drilling results where "significant intercepts" of gold were found; the first containing 6.78g of gold per ton (g/t) at a length of 13m and the second containing 5.98g/t at 6m.

The two grades and lode thickness were "similar to, or better than" the panel 2 area in the Frasers underground area where mining was at present being done, he said.

Production for 2009 saw an average 2.60g/t taken from Oceana's open pit Reefton mine on the West Coast.

The Macraes operation averaged 1.47g/t.

Oceana has estimated recently the Frasers underground mine has a three-year life and would deliver 55,000-65,000 ounces each year.

Yesterday, Mr Bibby said the positive results were "an all-important first step to extending the mine life of our underground operations".

In the past five months, Oceana has twice upgraded its estimates of mineral reserves, adding a total of 754,000 ounces to its estimate of gold reserves; to a total of 1.6 million ounces.

During the past 20 years, more than 5600 test holes have been drilled at Macraes.

Oceana is stepping up its exploration drilling programme this year, spending about $7 million at Macraes and Reefton.

[elZorro]

Another good buying day for the brave. Huge volume over here, two big sales/purchases of 400k shares. The Aussie side looks geared to be a bit calmer, but will wait and see.

[geezy]

had a small bite @ today's weakness

[Jay]

Thinking about it too- have been for a few days but then down it went, will wait until shows better signs ie starts going up again - not going to try to pick the bottom.

[elZorro]

A sample of market sentiment on gold, a bit dated but it has interesting comments on how buying into gold miners can be a leveraged form of gold investment. Note again how stable POG was today amongst the carnage. Plenty of takers to buy over 1mill shares of OGC here today. They almost certainly got a bargain.

http://moneymorning.com/2009/11/19/gold-prices-8/

[elZorro]

OGC lower on the TSX again overnight, more glee from those buying in.

From where I'm standing, Oceana Gold doesn't have too many problems. They have plenty of accessible gold in the ground, they know how to process it, they have enough cashflow to look for more, and they are undervalued compared to similar miners.

As far as this share is concerned, the price of gold is the critical factor. I've seen a bit of writing about how the world's economies will be pushing the POG up to help pay off debt. Is that realistic?

Total world gold reserves are 30,000 tonnes, close to one billion ounces. So about one Trillion dollars worth. If POG doubled, net increase would be 1 Trillion dollars US. But world external debt is in the hundreds of Trillions, and I don't think that includes internal debt. Does anyone else have some figures?

Certainly it would seem gold would have to go up a lot to cover debt positions. Wish I'd done economics now..

[elZorro]

An extra 80 million income (GP) should mean 10x that on the valuation - $800million on the MCAP?


Oceana reflects on mining's future
Home » News » Business
By Simon Hartley on Wed, 5 May 2010
News: Business
Oceana Gold's economic impact on the Otago economy is measured in the tens of millions of dollars each year as it churns through millions of tonnes of East Otago and West Coast ore to extract gold.

Oceana's positive economic impact in Otago reflects the mining industry's overall position on the Government's contentious proposals to open up protected conservation estate land for exploration.

At stake are the regional economic benefits of mining compared with the potentially negative environmental impacts.

Mining is expensive, with Oceana last year extracting about two grammes of gold from each metric tonne of ore processed, shifting about 5.5 million tonnes of ore.

For each ounce produced last calendar year, it cost Oceana $NZ886, and on average it sold each ounce for $NZ1098.

This calendar year, Oceana has forecast its cash costs per ounce to rise to between $915 to $970.

However, Oceana has recently bought back all its forward selling gold contracts which had locked it into pre-determined prices, and can now sell its gold on the global spot market, which has been hovering above $NZ1530 per ounce in recent months.

The difference in contract and open market prices could add tens of millions of dollars to Oceana's bottom line, Oceana's chief operations officer Mark Cadzow said.

"Now that Oceana Gold is selling on the spot market, as of April 1, depending on the [daily international] gold price, we would expect an extra $70 million to $80 million would flow to the bottom line per annum, from the Macraes operations," Mr Cadzow said.

Partly processed ore from Reefton, which is a slightly higher grade on average than that from Macraes, is delivered by rail from the West Coast and processed at the Macraes plant.

In an early draft of an independent report being compiled for Oceana by economic forecasters Infometrics, Oceana Gold's economic contribution ranks in the top 0.5% of New Zealand companies employing one person or more.

The report estimates Oceana's contribution to New Zealand's GDP is 0.17%, which equates to about $363 million in 2009, two-thirds of which is attributable to Otago - about $242 million.

Mr Cadzow said about 85% to 90% of Oceana's total revenue went into the local and national economy.

"The Macraes current life-of-mine is at least six years.

I'd see our level of [GDP] contribution to the Otago economy being maintained for at least that period," he said.

However, with successful exploration, that could be increased as Oceana looked at other opportunities to expand the business.

This would lead to additional capital being invested in the operation, he said.

Oceana had spent "and will continue to spend significant dollars" on brownfields exploration, at the Macraes and Reefton gold fields during the next two years.

"The company's ability to continue to add [estimated] reserve life is an important factor to sustaining the operations for years to come," Mr Cadzow said.

He highlighted that in Deloitte's Top 200 companies in the country, Oceana last year had the most improved percentage revenue change in the survey, being ranked at 101 by revenue and its total assets ranked 72nd.

Oceana had a workforce of 780.

When applied to an economic multiplier, it was estimated that each Oceana job underpinned a further three jobs in the community in the service and contract sectors, he said.

Oceana's staff and contractors were paid $63 million during 2009.

"It's a highly paid profession, about twice the national average [wage]," Mr Cadzow said.

[elZorro]

I was just reading from a perhaps more reputable writeup, that major economies try to hold back gold prices (presumably to curb inflation?).
Anyway, that didn't happen last night.

http://www.kitco.com/reports/KitcoNews20100506F.html

[elZorro]

Seems to make sense..


Forget the Dow and watch gold on Friday

The market's volatility today wasn't based on stocks -- it was based on currencies, sovereign debt and the flight to gold
Posted by InvestorPlace on Thursday, May 6, 2010 5:11 PM
By John Lansing, InvestorPlace.com

Wall Street suffered a brutal session today, with the Dow Jones Industrial Average dropping as much as 1,000 points intraday and temporarily dipping below the 10,000 mark. That’s a mid-day swing of more than 9% -- sending the benchmark index to its worst reading since February. The market ended up fighting back to 10,520 at the close, but still logged its worst intraday decline in history.

But the most important story, believe it or not, is not the stock market per se. The real chaos investors need to watch closely is the currency markets and gold. This will tell us whether the bull market is over or whether investors can count on the market recovering from today's sell-off.

Driving the market’s declines were fears that Greece’s $140 billion rescue package from the International Monetary Fund and euro zone nations is just the tip of the iceberg. Some of the nations footing the bill -- Portugal and Spain chiefly among them -- are in pretty dire straits themselves and may need a bailout of their own. On top of that, some fear that the bailout may not be enough to right Greece’s economy and prop up the euro zone.

Governments and investors alike aren’t asking whether Greece’s economy is too big to fail, but whether it’s too big to save. It was painful to prop up AIG, GM and Fannie Mae ... but it was within Uncle Sam's power (barely) to do so. But if an entire nation had to band together to bail out these companies, who will band together to bail out these nations?

Related: Don't Get Bitten by a Dead Cat Bounce

With no answer to that question, investors are fleeing to gold and roiling the currency markets. Some currencies, in some folks' minds, aren't even worth the paper they're printed on.

The Japanese Yen, the Swiss Franc, the Australian dollar all moved 4 to 6% during today’s volatile session. That’s no accident -- massive triggering of institutional stop losses can’t drive currency markets that crazy, nor can a flood of short selling. And certainly not a "glitch" or some trader with a fat finger registering the wrong trade on a Dow component stock.

The encouraging sign is that after the market’s gut-wrenching dip at around 2:45 p.m., it began a steady march back upwards. The Dow eventually closed down “only” 3.2% The S&P was also off 3.2% and the Nasdaq shed 3.4% when all was said and done.

So where do we go from here? Unfortunately with a Friday ahead of us it’s too soon to tell since investors really don’t like to go long over a weekend when uncertainty like this is gripping the market. We’ll know more based on the market’s movements tomorrow and early next week -- and here’s what you need to watch:

Gold: If the market is up a hundred points or so but gold is also up, it’s time to run for the hills. A clear sign of a dead-cat bounce in equities is if investors are still seeking shelter in gold and driving it up $20, $40 or $60 in a single session. A run in gold tomorrow and into early next week means Wall Street is stockpiling the yellow stuff before running to the bomb shelter. Stability in gold means that the panic selling has abated.

Related: Top Gold Stock to Buy Now

Currencies: If the Euro drops another 3% or so tomorrow, it means that Greece’s debt fears and the subsequent fallout are still weighing heavily on investors everywhere. It’s just plain impossible for the market to move higher if the euro doesn’t bottom out. If we’re seeing improvement in the currency then things may be stabilizing … but if not, look out below.

Related Articles:

Five of the Worst Stocks Out There
Gold Rises as Risks in Europe Grow (GLD, GDX)
VIX Explodes, Is the Market Going Up in Smoke?

[geezy]

elzorro , i think commods will be taking a big hit, gold included?

[elZorro]

Hi Geezy, I'll bite..:D
I don't know much about most commodities. I see Nickel has dropped a lot, implying lower S/S production estimates in a downturn. Gold on the other hand, has risen in the last few days, as widely predicted.

Is gold really just a commodity? In most cultures it has extra intrinsic value. While quite a bit of gold is used in the electronic industry for example, it is in such small amounts per component (very thin plating) that it doesn't affect the costs much. So POG could rise for this industry without much bother. Let's face it, being a heavy metal, it drops lower into the earth's crust every time it gets the chance, and it's getting more expensive to find it and recover it in the lower grades.

Mining companies with lots of gold in the ground at lower grades will only bring it out when the POG is high enough, like it is now. But there does seem to be a lot of demand for gold bars, with tonnes being purchased and shipped around the world in the last few months. I have read that the vast majority of gold traded is not available physically, and if you asked to view all of it at once, there would be a severe shortfall.

I don't want to see the value of equities worldwide being shot to hell, but I do think that companies like OGC with their gold exposure might do better than most. A slow and steady increase in the POG would be a tidy outcome, as perhaps inflationary factors become more important in the next year or two.

OGC is a leveraged gold investment. The value of its shares are still low because the market has seen their books. It cost nearly as much to recover the gold (even with fairly good grades) as they were getting for it under their hedged contracts, for the last year or two. We can estimate what the change will be over 2010-2011, and it's a lot better.

Take an imaginary example of a miner recovering gold for NZ$700 per oz, selling it on a contract for $800 per oz. No matter what the POG, the GP will always be $100 per oz (let's say the average POG was $1200). If the same miner keeps mining at $700 per oz costs, but the POG rises to $1700 per oz unhedged, the GP is now $1,000 per oz, 10x the previous level. The market capitalisation is strongly linked to the GP, all other things being equal. (perhaps 10x annual GP).

Note that from $1200/oz to $1700/oz, the POG increase is only 41%, but the GP of the imaginary company would go up 900% (unhedged to hedged) or by 100% (if it had been unhedged already)

Will the POG go up, or down, in the short term? Most think upwards.

http://www.kitco.com/reports/KitcoNews20100507_update2.html

It doesn't matter what commonsense tells us, most of us will follow a trend, play safe. In a way, that's why gold is so good. Most punters will wait until OGC puts out a press release saying how much money they have in the bank now, from the first 6 months or so of unhedged gold production. It'll be too late by then , to get OGC shares at a real bargain. (Sure, they were an even better bargain right under our noses a year or two ago).

Short answer: I don't think gold will take a hit, and OGC is my main equities investment at the moment :cool:

[elZorro]

From the ODT: OGC looks determined to raise its profile with investors. Thinking about it, their team is well connected with gold and the market prices for it. They must have a reasonable expectation that the POG is not going downwards in a hurry. And this news will add more profit and probably reduce the cost per ounce as well.


Oceana Gold takes over Frasers contract
Home » News » Business
By Simon Hartley on Sat, 8 May 2010
News: Business | Oceana Gold
Oceana Gold is taking over the Frasers underground mining contract, which was costing it about $25 million per year, and is offering the contractor's 100 staff employment with Oceana.

Australian-based Byrnecut Mining has been contracted at the East Otago Macraes site to mine Frasers - which cost $US54 million ($NZ75.8 million) to develop - since April 2006, with the tunnel fully commissioned in January 2008.

Oceana chief operating officer Mark Cadzow said the company would maintain manning levels and would offer employment to Byrnecut's 100 employees, plus Byrnecut would act in an advisory role until September.

Frasers has about 125 staff.

"The main advantage is leveraging off other parts of the [open pit] operation and utilising those synergies to reduce costs," Mr Cadzow said.

Oceana recently got out of its forward contract hedging arrangements to sell all its gold on the global spot market and expects an extra $70 million-$80 million if prices remain around the $US1100 per ounce level. Prices spiked yesterday above $US1200.

About 1 million tonnes of ore is taken out of Frasers annually. It is forecast to deliver 55,000-65,000oz of gold annually for three years.

However, the extent of the ore body remains undefined at depths beyond the present 580m.

Test drilling in adjacent areas recently delivered "promising results" of "significant" grades.

This is also fairly new, from the website. It graphically shows the current market perception of OGC is on the low side (at least half) by comparison with other unhedged producers. Still uses the lower resources quantities from 31 December 2009.

http://www.oceanagold.com/images/documents/presentations/100503_may_2010_ogc_corporate_presentation.pdf

OGC is not alone in closing out hedges: they are behind the trend.

http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=98957&sn=Detail

[elZorro]

Here are the voting papers and notes for the AGM and special meeting, to be held 4 June in Canada. There will be a vote for options to directors, a parcel of 100,000 each, at sensible prices depending on their term with the company.

http://www.asx.net.au/asx/research/companyInfo.do?by=asxCode&asxCode=OGC

Notice to market yesterday.

On the TSX last night, OGC finished at $3.23 equiv, was higher than that at times ($3.30), good volume. Looks like the ASX is having some issues today.

[elZorro]

http://cxa.marketwatch.com/tsx/en/market/quote.aspx?symbol=ogc&x=8&y=10

Much bigger volume on the TSX overnight, OGC is still climbing and should finish above CAD$2.55 (NZ $3.47).
A disturbing late increase in POG helping.

http://www.kitco.com/charts/popup/au24hr3day.html

[Vtrader]

Z
Thanks for the little and often approach here, valuable
V.

[elZorro]

Z
Thanks for the little and often approach here, valuable
V.

Hi Vtrader, thanks, thought I was a voice in the wilderness for a while there. My broking a/c is offline for 30 mins, but I hear things are looking up for OGC. Guess I was lucky to buy more yesterday.

OGC stands to benefit by about 12c/share for every $10 increase in POG (gold being sold on the unhedged market now), which is about how much the share went up today, nearly 30c. It should still crab its way higher in any case, as it is undervalued by about half on most measures against similar miners.

And this is before the lastest finds are quantified, and any new drilling results are presented to the market. Maybe it won't be too long before we hear about these.

[geezy]

u must be smiling today elzorro, my order was not met! :(

[mistymountain]

Thanks elZorro for your data analysis there and sentiments. I am looking forward over the next 5 years with this company given significant potential for resource upgrades, improved cashflow and growth at Didipio resuming.

Brilliant!

[elZorro]

Regards Geezy, thanks for your comments on the thread, perhaps a quick buy this morning will be OK, or in the middle of the day. Yesterday we ended up matching the Canadian final price, as did the ASX.

MistyMountain, that was an inspired thread start, OGC needed rebranding here on Sharetrader. Maybe OGC is also a coup for FA investors at the moment: you couldn't have picked the sudden change in price with TA, it would be too slow.

As I write this, OGC on the TSX has dropped back from heavy midday trading (Mum/Dad investors) to begin a climb again from CAD$2.78, up over another 8%, 1.8mill shares traded so far with 30 mins to go.

http://www.stuff.co.nz/business/market-data/3689377/Kiwi-goldminers-riding-high

[elZorro]

This is a new one for me: I've started looking at the Kitco gold price live, and as the Hong Kong exchange is in session, there has just been a spike in the OGC price. It's now over AUD$3.00. Is this because gold may trend higher on their watch? Any advice and clues from more seasoned investors would be welcome..

Maybe it's the lunchtime crowd in Australia.

@4.30: Gold is static/ trending up to $1240/oz, was nearly $1250 overnight at one stage.
Still a lot of interest on the ASX, and hardly any OGC for sale over here.

[elZorro]

Here's a story on Palmerston, the nearest township to the Macraes mine.

http://www.odt.co.nz/the-regions/north-otago/104744/palmerston-community-thriving-mine?page=0%2C0

A story out today, also from the ODT:

http://www.odt.co.nz/news/business/105973/oceana-shares-surge-18

As the POG has stabilised overnight just above 1230 at this stage, OGC on the TSX has still not reached the equivalent of the ASX close, NZ$3.89. But it is up 2%, heavy trading of over 1.2mill shares.

It looks like the market will take some time to revalue OGC in line with their peers. Plenty of upwards movement to go, IMHO.

Yesterday, there was a market release (OGC: ASX) about Baker Steel Capital Managers.

http://www.asx.com.au/asxpdf/20100513/pdf/31q9r59zpk87lt.pdf

As a group, they now own 9.2% of OGC (was 10.87%). They have purchased more shares in the same time period, but because of dilution are now below the 10% threshold. Interesting group:

http://www.bakersteelcap.com/

You have to have 100K to go here: and Genus Dynamic Gold Fund at least is LONG ONLY (3.9mill OGC shares). I couldn't navigate to the parts mentioning who they invest with, or to look at some other funds.

[fwu005]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10644781

[elZorro]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10644781

Hi fwu005, there seemed to be two sides to that article: see also

http://www.nzherald.co.nz/mining/news/article.cfm?c_id=64&objectid=10644778

OGC has state of the art equipment, it's still expensive getting gold out of the ground. The market at least has to pay for a sensible recovery amount. For OGC, any gold price over$1000/oz easily justifies the share price, without doing any maths.

The ASX noted the SP increase too: no problems there.

http://www.asx.com.au/asxpdf/20100514/pdf/31qbf7d2c8ycxd.pdf

[elZorro]

I keep an eye on the Stockhouse thread for OGC: a lot of blather at times, but Mieke69 has posted this.
A lot of OGC gets traded on the TSX, usually the market here follows their lead in the morning, and then follows the ASX.


Didipio project
mieke69
05/15/2010 10:33:00 PM | | 47 reads | Post #28247433

Given that we are likely to hear in July about the likely re-initiation of the Didipio project it is worth doing some forward thinking to see what this might mean in terms of re-valuation for the company.

In these estimations I am leaving out any contribution made by copper (I believe the most likely outcome is a joint venture with a copper interest so for the sake of argument I ascribe copper incomes to this as yet unknown company).

Didipio estimated production Au/year = 120,000oz
Production costs/depreciation allowances/other costs per oz = US$700 (this figure is highly conservative)
POG = US$1150

Extra earnings flow to OGC/annum = US$54m

On a P/E ratio of 10 such extra earnings would be worth of the order of NZ$4 a share or US$2.9.

I would expect the OGC share price to gradually start to reflect this upward revision once a Didipio deal was announced.

Allowing for a re-rating of OGC (using a P/E ratio of 10) based on the now dehedged annual earnings of say $US125m to around US$5.9 a share, I would then give a target of US$8.8/share (say C$8.5) for the shareprice incorporating the green light for the Didipio project.

None of these figures make any allowance for a) the almost certainly extensive resource upgrades to be announced from the NZ mines in the next 6 months and b) any increase in POG.

They also rely on the highly conservative view that OGC would only be trading on a PE ratio of approx 10. Given the growth opportunities attached to this company it would not be unrealistic to see that figure move up more towards 15.

Earlier, this was posted..


Up over 2% in a market down 100 points
mieke69 05/14/2010 5:13:45 PM | | 147 reads | Post #28245452
clarity 5 overall quality : 4
Average quality rating by the Stockhouse community. credibility : 5 usefulness : 5

Showing good strength. Not a good idea to trade this one as you may never be able to get back on board at a price you are happy with. I'm based in NZ and I can tell you that interest is starting to grow around Oceana (from a very low base).

There are several things short term we have to look forward to in the next 3 months (all of which should be very beneficial to the share price)

a) Continued upgrades in mine resources. I expect at least one announcement in late May/early June detailing a further resource expansion (of between 100-200K oz). Regular updates to follow that as the drills continue to turn

b) News in early-mid July as to what will happen with the Didipio project (in their recent post results audiocast the company explained that a decision would be occuring around then subject to a board meeting). My best guess is that they will re-launch it as a JV, possibly with a copper mining interest.

c) Results for this quarter on or around Juky 30th which will be stellar. I am estimating they will produce 70,000oz and clearing $US450/oz to give net profit of US$32m for the quarter (I have used conservative figures). Annualised this is pointing to profit of US$130m.

Present company valuation = about $US670m

Undervalued? You better believe it!!!

I agree with Mieke69, holders of this share have only one worry of the downwards kind: the price of gold. Any price over US$1100/oz should provide stellar returns, and a steady revaluation upwards. Or maybe it will be like we saw in the last few days, rather more spectacular :)

[corporateraider]

My thoughts are that OGC may be trying to retain the whole of Didipio. Remember that the capital that they have invested here is already substantial and so the balance required can not be too large. They are also talking of scaling down the capital required.
The rate that they are producing cash means that they will have a tidy nest egg in only a year or so.
My recollection is that the Cu from Didipio represents 80000 oz gold equivalent per year. To give 17 years of that away for the financing of the remainder of the project seems scant return indeed!!!!
We shall wait and see.

[elZorro]

My thoughts are that OGC may be trying to retain the whole of Didipio. Remember that the capital that they have invested here is already substantial and so the balance required can not be too large. They are also talking of scaling down the capital required.
The rate that they are producing cash means that they will have a tidy nest egg in only a year or so.
My recollection is that the Cu from Didipio represents 80000 oz gold equivalent per year. To give 17 years of that away for the financing of the remainder of the project seems scant return indeed!!!!
We shall wait and see.

Good points CR: I haven't looked into Didipio much further because the situation there still looks a little untidy. Some strong cashflow from the NZ mines, a bit of time for positive PR to do its thing, and perhaps an increase in POG still further, will all help make Didipio a no-brainer.

This came in from Minesite:


Weekly Review

We make no apology for returning to the subject of gold again. After all the price hit a high of US$1,248.50 last week. This is still some way below the all-time high of over US$2,000/oz reached in 1980, but that figure has been adjusted for inflation over the intervening years.

Nevertheless it provides a target and it is worth remembering that at the time the oil price was at a high point, inflation was high, the Russians had intervened in Afghanistan and there was a revolution in Iran.

So what has changed? The oil price is over US$80/barrel; the US is banging its head against a wall in Afghanistan: and Iran is still a problem. Now we have much less in the way of inflation, but fiat currencies are in a state of chaos as a result of budget deficits and the recent banking crisis. Last week the most striking event was the fall of the euro to an 18 month low against the dollar even after the announcement of a €750 billion package cobbled together to shore up the eurozone's sovereign debt markets. But people are already on the streets in Greece as a result of austerity measures and Portugal, Spain and Italy are likely to follow.

No surprise then to find that Germans are hoovering up gold as quickly as possible as it's position as a leading member of the EU will ensure that it has to pay for much of this shambles. Older citizens will remember the '30s so this is an inevitable outcome. In these circumstances it is strange that Lex of the Financial Times chooses to knock gold, but without suggesting an alternative investment. Modern art, coffee, copper or diamonds, perhaps?

Even stranger, this piece with the inevitable title of Fool's Gold contained the following sentence 'Gold has only enriched those who have known when to sell it to a greater fool'. This demonstrates two things clearly about the writer. First, he/she has no concept of the essence of investment - everything is for buying and selling and it is only with hindsight that a judgement can be made as to whether the sale was too early or the purchase too late. Second, that he/she is intent on kicking the reputation of Lex into the long grass yet again.

Lex has been knocking gold as a barbarous relic at regular intervals since the price was US$450/oz in 2004 so who has been the greater fool? Lex or the investors who have been buying and selling the metal ever since?

Here's a link to a newsheet that I wish I'd seen in May 2009..

http://www.goldstockbull.com/articles/oceanagold-worlds-most-undervalued-gold-miner/

[mistymountain]

Good on you elZorro! Good bit of hindsight research there though as we're looking at medium to long term I think OGC upside has a long way to go yet and articles like that are great reference points. Really appreciate all the techy analsis being uploaded too.

Cheers

[mistymountain]

Anyone doing some thinking on HGD resource ? I know there is a separate HGD thread (which I've posted to with my thoughts) however would OGC see HGD as a JV opportunity as Chinese are slow to come on board?? Two South Island mines but none in North Island...

[corporateraider]

elZorro
It's hard to do any meaningful research on Didipio. The company is contemplating a different operating model to that proposed initially, well that's what they seem to be saying. They are looking at mining higher grade resource first. And the required capital cost is difficult to estimate. And who knows what the price of copper might be.
I still see further share price appreciation just on the current price of gold. My pick is yearly earnings greater than 100m and on a pe of 10 that means a higher share price than we currently see.

[elZorro]

Anyone doing some thinking on HGD resource ? I know there is a separate HGD thread (which I've posted to with my thoughts) however would OGC see HGD as a JV opportunity as Chinese are slow to come on board?? Two South Island mines but none in North Island...

Hi MistyMountain, surely Newmont would be more likely to make an offer, and they haven't done so yet. There's a lot of capital needed for any extraction equipment. So I think OGC have got a great advantage in being able to find more gold (and at big grades) close to their existing setup and staff.

[elZorro]

elZorro
It's hard to do any meaningful research on Didipio. The company is contemplating a different operating model to that proposed initially, well that's what they seem to be saying. They are looking at mining higher grade resource first. And the required capital cost is difficult to estimate. And who knows what the price of copper might be.
I still see further share price appreciation just on the current price of gold. My pick is yearly earnings greater than 100m and on a pe of 10 that means a higher share price than we currently see.

Yes, I like the maths too CorporateRaider: one billion dollars divided by 228mill shares, it's already 11% more than $3.95 per share. And more if you're talking US$.

A bit of profit-taking going on today..the POG is drifting between 1210 and 1225, so no upwards push there to help offset this. Last I heard, OGC still has lots of gold in situ and can make a good profit mining it.

[elZorro]

Gold has dropped below US$1200 overnight, and the TSX should finish with OGC at CAD$2.75, down a bit. Turnover is high, over 2million shares traded.

A year ago, some pundits were picking OGC when it was in the range of NZ$1.00, and it climbed to $1.50 during May.

Go back a couple of months from there, and you'll see even bigger percentage gains for OGC, and very large volume. In February 2009, OGC reported the FY2008, which was a profit of 66mill. What excited the market was the increase over FY2007, which was 9mill. Perhaps it was during this time that Baker Steel (and funds like them) built up their big stakes.

From the information we're given about the costs of gold recovery by many miners, the POG is not going back to US$300/oz. In fact, the trend over 5 or 10 years is a very solid climb. This helps explain the investment in mining equipment worldwide, it only continues when the mining is profitable.

If (as Phaedrus has mentioned elsewhere) the NZ market suits FA to first pick a share, and then TA to select the buy/sell points, I have no problem waiting to pick up more OGC shares should they drop any further. By all measures they are already good value, as long as the POG stays above US$1100 or so, IMHO. And that's if OGC spend 7mill near their existing NZ mines and come up with no expansion to their reserves. Like that's going to happen...

[elZorro]

Dear Diary:
Took the opportunity to buy more OGC today, someone over in HK shorting gold? Where is the safe haven today..

[geezy]

no safe haven anywhere today el zorro, only safe haven is cash at the moment. OGC definitely on my radar at this price!

[elZorro]

no safe haven anywhere today el zorro, only safe haven is cash at the moment. OGC definitely on my radar at this price!

Hi Geezy, maybe this will cheer you up..:t_up:

http://www.kitco.com/ind/saville/may182010.html

If this article is to be believed, over 2 million oz of gold (over 3,400 million dollars worth) has already been recovered from the quartz reefs near Reefton, with an average grade of 16g/tonne, in the last 130 years or so.

http://www.teara.govt.nz/en/west-coast-places/5

It looks like there are people day-trading OGC on the ASX: it often trends lower in the morning, has a break of 30 mins or so with no trading (see today), and then starts trending back up. OGC finished solidly, with gold not far off $1180/oz.

[elZorro]

An article early this month from ODT, chatting to staff at Macraes.

http://www.odt.co.nz/the-regions/central-otago/104080/macraes-digging-our-backyard?page=0%2C1

Part of the reason OGC did very well at Macraes in 2008-2009, was new recovery equipment installed late 2007. An extra 6MT of ore per year could be handled.

http://www.miningmagazine.com/panorama/outotec-tankcell-success-at-macraes

Goldmining in NZ was the leading article on the business pages of the SST on Sunday: even Glass Earth had a couple of mentions, but the powerhouse of gold production was certainly OGC.

http://www.stuff.co.nz/sunday-star-times/business/3725240/Gold-production-heads-to-1b

[elZorro]

OGC is going for a run this morning in Aussie. Equiv of NZ$3.80 so far.
POG is climbing fast, to US$1185 by 12.30

[elZorro]

I was surprised - no trading activity on the TSX last night, but it's a holiday over there.

I did find this post on Stockhouse, it's one of the most informative ones for quite a while.


OceanaGold Post by Original_Braila 15/21/2010 12:29:02 AM | | 301 reads

Hi, I usually don´t post so much here because the quality of the Stockhouse chats are so low and not at all regulated. Basically what I see is heavy accumulation by some brokerage houses at the same time as new posters turn up and try to scare small investors about the danger of gold.

Still I want to point out a few things:
1. OceanaGold is producing in New Zealand and is not at all affected by the socialist government follies of doubling the taxes in Australia but suffers the consequences since they are traded at the ASX. They are however affected by the lowering of the corporate tax in April 2011 by the conservative government in New Zealand. For those that invest in Australian producers it might be nice to know that the socialists are dropping rapidly and that the election this fall might be a hung parliament.

2. The aussie dollar is dropping rapidly and the kiwi dollar is (unfairly) following it down. Please understand this:
- 1250 usd gold divided by 0,715 a week ago = 1748 nzd paid/ounce
- 1170 usd gold divided by 0,67 now = 1746 nzd paid/ounce

So we are looking at record high gold prices this week too. The effect shows up through lower cash costs and total costs due to the fact that they use USD in book keeping but the effect is the same.

3. I view OGC as basically debt free since the debts are convertible bonds at around 3,9 cad which I expect to be converted into shares as well as tax debts without interest rates due to the usual tax possibilities to postpone tax to encourage investments etc. Still if you really think that OGC had 300 musd debt, then you also must understand that since they are in AUD and in NZD they will be lower by 7-12% or average 10% measured in the next report.

4. The company closed out its hedges in Q1 and on average recieved 743 usd/ounce. The wholde Q2 it will be market price which should on average be between 1150 and 1250 depending on your own prognoses. What will 450 usd extra/ounce do to the EPS? My expectations is at least EPS 10 canadian cents/share.

5. Expect non cash profit to increase far above the 10 cent due to the buying back of hedges paid in early april and the lower mark to markets reports of debts.

6. Expect production to be sharply up due to the earlier close for service of the autoclave in Q1, Reefton concentrate delayed (through the autoclave) in March being delayed, richer mining sequence and higher recoveries as all tonnage is again passing through the autoclave.

7. Higher production will sharply lower cash costs even before currency effects.

8. Expect an update on Didipio sometime after the board meeting around June 5th.

9. Lower oil price are in general good for open pit producers such as OGC due to lower diesel costs. Still other companies have a higher exposure since OGC is on the electric grid for power rather than diesel generators.

10. If market turbulence continues it is probable that the aussie dollar continues down bringing the nzd down as well further protecting us against volatility.

I will not post answers here, anyone that likes to follow my opinion can read my blog through google translator at http://originalbraila.blogspot.com/ where you can also find our short essay about OGC from April 26 in English.

Please accept my appoligies for any abuse of the English language since it is not my native tongue. Best of luck with your investments.

If have yet to follow up the link.
All good for OGC and other goldies today, as the POG went up by $10 to US$1195.

Maybe it's this post:


torsdag 29 april 2010
A second opinion
The country's biggest gold miner OceanaGold is trading at a discount of up to 65 per cent below its ASX-listed peers, analysis from Austock has found.
Sydney-based analyst Anna Kassianos has increased her firm's 12-month target price for the stock from A$3.38 to A$4.61 following a site visit to the company's New Zealand South Island mines at Reefton on the West Coast and Macraes Flat near Dunedin.
OceanaGold is listed in New Zealand, Australia and Canada and closed here at $3.40 yesterday.
Kassianos - who was ahead of other analysts with a buy recommendation early last year - says the continued positive outlook now results from the cost of buying out its gold hedges coming in below what was expected, a ramp-up of exploration and an expected 86 per cent increase in ore reserve conversion rates.
OceanaGold had moved to Austock's number one pick for Australian-listed, middle-sized gold companies.
The company is the fifth largest ASX-listed gold producer but given new reserves and extended mine life, should be recognised as the third biggest physical producer, she said.
Upplagd av Original_Braila kl. 18.51 0 kommentarer

Some detail about how the Reefton mine and the concentration process is worked.

http://www.ruraldelivery.net.nz/absolutenm/templates/featuresTemplate.asp?articleid=565&zoneid=6

[elZorro]

The TSX is rallying towards the latter stages of its Tuesday, and most of the shares that are in the blue are resources or gold miners. In fact OGC is one of them, up 5%. So yesterday saw the normal sentiment for OGC:

The TSX is keen on OGC (NZ$3.88), especially when POG rises - the NZX is next but low volume (NZ$3.68) - and the ASX (NZ$3.65) can be a bit reserved on this one.

Gold has briefly broken through US$1200/oz three times overnight, and is now at about NZ$1800/oz partly on the exchange rate dropping. Oceana Gold will be keen to sell their output at this price.

I remember Reefton's prospects looking up in April:

http://www.oceanagold.com/images/documents/files/100412_reefton_exploration.pdf

While there are a few brownfields intercepts over 10g/tonne, the average must be better than 6g/tonne. This is still huge. Note, historically 16g/tonne was found in the quartz reefs, this was won by crushing the ore.

Once OGC get to these areas, they will be able to recover 1oz from about 5tonne of ore, which is only 3 cubic metres worth. Just think, 1.5mtr cubed will contain at least NZ$1800 of gold.. and the cost of recovery will probably be a lot lower per ounce than currently averaged.

[geezy]

el zorro what do u think of this stock AUZ.au ? gold miner at only 0.001 cents :D

[elZorro]

el zorro what do u think of this stock AUZ.au ? gold miner at only 0.001 cents :D

That share is bizarre: 100% gain today.. :cool:

The grades look OK, might be fairly small pockets outside the main pit. Of course they're not producing at the moment, just using up shareholders funds. But certainly this would be an exciting share to have a go at. Can you sell me some shares at 0.1c?

See Shasta's reply on the ASX side, you'd need to be careful with this one.

[geezy]

yes interestingly enough, someone created a new thread when i just asked about it. OGC still going strong there :)

[elZorro]

yes interestingly enough, someone created a new thread when i just asked about it. OGC still going strong there :)

You'd have to do a few hours of research before sending a lot of cash that way (AUZ), great fun if it worked out though.

Re OGC: When there are no press releases, this one follows the gold price. Why not, they're selling on the spot market. Just now POG is dropping back under 1205, but who knows what will happen tonight.

Any old day now, there might be some more news from Reefton or Macraes. That will almost certainly boost it a bit more.

9.15 pm: gold spotted heading for US$1215..

[elZorro]

Overnight the POG reached 1215 twice, stabilised at 1210.
This time the TSX reacted quickly, and at the moment OGC is at CAD$3.08 (NZ$4.28!) with 1.35 mill shares traded, still 20 mins of trading to go.

[darksentinel]

OGC leading gains on another day of NZX falls. Up over 14% to $4.32!

[geezy]

OGC outperforming the market by far . is it still too late to go in now ? :P

[elZorro]

Geezy, that's what I'm wondering too. If the POG rises higher again, which it may do when HK kicks in, it could carry on today. Usually the ASX price drops back in the middle of the day, then picks up again. I'd think there'd be a few daytraders in there, note that on the TSX the price dropped back in the last hour before picking up.

Medium term: Oceana Gold will make very good returns this quarter, but will the sharemarket continue to pay the same multiples on that return? We need some experienced feedback on that issue.

[Jay]

I was thinking is it too late now given the state of the markets and Phaedrus ASX MSI indicator (ta again Phaedrus)
Was in and now out for a small profit - tried to stick to my rules,(broke the trend line - short term we are talking about - A chart please Phaedrus ?) if i had not would be doing better, but that is hindsight.
Tend to agree elZ , not sure the market will continue to rate it unless the pog takes off again, but again would also appreciate a more informed opinion than mine

Would also expect some profit taking later today & tomorrow as well from short term traders

[elZorro]

Yes Jay, hard to tell what will happen. I do have a hunch that later on this afternoon the POG will go up over $1215, as it's heading that way, and as over 1mill of shares have already traded on the ASX, it'll probably end near the high point this morning. At the moment that's about a 3% gain, still have to risk a few thou to make anything sensible.

[corporateraider]

Of course with the substantial rise in the share price today there was some profit taking this afternoon. But the volume in OZ was very strong which makes me think that there is still more appreciation of the share price from here. I suspect that there are other drivers than the gold price but let's wait and see.

[Vtrader]

Z,
Your continued efforts appear to be paying off.
Hope you are (were) heavily leveraged on this one
V

[elZorro]

Z,
Your continued efforts appear to be paying off.
Hope you are (were) heavily leveraged on this one
V

Hello there VTrader, just obtained the use of the computer for the evening, all smiles today all right. It's my shout next meeting..

CorporateRaider:


Of course with the substantial rise in the share price today there was some profit taking this afternoon. But the volume in OZ was very strong which makes me think that there is still more appreciation of the share price from here. I suspect that there are other drivers than the gold price but let's wait and see.

I think you're referrring to a possible bigger resource at Macraes or Reefton affecting the price? There are some figures on Stockhouse suggesting that with current POG, OGC is still 34% undervalued compared to other miners, at 5x multiple. That's with Didipio dropped off.

If you watch the POG trendline, that is almost all of the movement in OGC during a trading session, apart from the unusual big starts and ends that happen if other sectors are doing badly. Not very scientific am I?..

So what will happen to OGC if the next press releases add to the reserves? - it should add to this upward movement. I have been checking on google for any snippets of mining info, nothing to see at the moment.

OGC finished on the TSX at $3.19, still up at least 10c on the majority of trading the day before, still 1 mill shares sold. $3.19 was about the average price traded all day, no weird spike at the end this time.
Current end prices are: TSX NZD$4.48, ASX NZD$4.41, NZ$4.34

[elZorro]

Another letter all listed businesses would like to respond to.

http://www.asx.com.au/asxpdf/20100528/pdf/31qkmx7vyksh0f.pdf

[Phaedrus]

I was thinking - is it too late now (to buy) given the state of the markets?Jay, it is not too late to buy so much as being quite the wrong time. The time to buy is when a stock has become technically OverSold and is just starting to rise again.


Was in and now out for a small profit - tried to stick to my rules, short term we are talking about - if i had not would be doing better, but that is hindsight. The aim of trading is to improve on the returns you would get by simply buying and holding. If you can't beat "buying and holding" any given stock, you are wasting time and money by trying to trade it. With stocks in a steady, strong uptrend (like this one) it is virtually impossible to beat simply holding the stock for as long as the uptrend continues. I have performed an awful lot of backtesting with OGC and have been unable to develop a short-term trading system that beats just holding it for the medium term.


Not sure the market will continue to rate it unless the pog takes off againWell, there is absolutely no sign of any technical weakness as yet.


Would also expect some profit taking later today & tomorrow as well from short term tradersI wouldn't, given the absence of any signals warning of impending weakness.

The chart below shows 6 "medium term" indicators which are suitable for monitoring this uptrend. You can see that all gave excellent Buy signals late last year and currently none are anywhere near triggering Sell signals. Jay, you say that in hindsight, your decision to bail out "for a small profit" could have been bettered, but I would claim that this was an ill-advised exit in the first place in that none of these indicators supported that decision. The fact that it later proved to be a mistake is therefore not very surprising.

I applied my Market Strength Indicator to the OGC price plot and you can see that it highlights some really good entry points. Note that it has illustrated strength ever since. It will be interesting to see how well its "Sell" signal (plot turning red) compares with those from the other indicators shown here.

The RSI plot at the top of the chart is the sort of indicator that might be used as part of a short-term trading system. It is set up using ideal parameters, found by back-testing and optimisation. Buy and Sell signals are marked by green and red arrows. As good as this looks, it underperforms simply buying and holding for the medium term.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/OGCnz528.gif

[shambles]

Thanks Phaedrus
Feel free to give us a 'heads up' when your sell signals start firing ;)
...Shambles

[yabster]

Thanks Phaedrus- can I ask what was used for the trailing Stop Loss ?

[Phaedrus]

The Trailing Stop is based on OGC's average true range, and in this instance is 6.2 x ATR. Not everyone has access to ATR based stops, but a simple 21% trailing stop gives an approximate equivalent. Trailing stops are often the last to be hit and so do not make the best exit strategy, especially when used in isolation. I would hope that one of the other 5 indicators featured here would fire before the Trailing Stop but only time will tell.

[elZorro]

The Trailing Stop is based on OGC's average true range, and in this instance is 6.2 x ATR. Not everyone has access to ATR based stops, but a simple 21% trailing stop gives an approximate equivalent. Trailing stops are often the last to be hit and so do not make the best exit strategy, especially when used in isolation. I would hope that one of the other 5 indicators featured here would fire before the Trailing Stop but only time will tell.

Thanks for your input Phaedrus, I think what you were saying earlier about OGC's trend, lines up with JBMurc's comment: "It's a no-brainer" at the moment.

On 13 May I posted this, hoping to get your attention..


MistyMountain, that was an inspired thread start, OGC needed rebranding here on Sharetrader. Maybe OGC is also a coup for FA investors at the moment: you couldn't have picked the sudden change in price with TA, it would be too slow.

I made this comment because there had not been much local buying of OGC, and I was looking hard at the share over just a few days. But I had also been doing some FA on the share, and so I concluded that not only was it a 'no-brainer', but it had plenty of room to go yet. I then didn't need to look at any indicators, just buy on the dips, and keep an eye on the POG.

That's where I get worried about TA systems: you look backwards, then extrapolate, but without some FA, surely you have to use more care and reserve. Is that why you're sidelined at the moment? Yet your charting tells you to buy and hold OGC. :confused:

[mistymountain]

ElZorro, I have bought and held this company twice since 2006. Never sold the share purchases. The relisting of the company sent SP to $4 from a buck then the GFC and Didiopio sent SP to $0.20. My take is that we are now in a significant SP rerating to where OGC was 3 years ago.

Now that we have some positive financial news I see the significant uptrend to continue for many years.

Now is not the time to sell. DYOR though...

Accumulation would be the best strategy methinks.

Here's a new question to think. If after 2 years POG stays above US$1100 average what's the chances of a dividend payout in 2012...?

Cheers

[Phaedrus]

OGC is also a coup for FA investors at the momentTA gave multiple clear Buy signals last September, and has given NO sell signals since then. What more could you possibly ask! You reckon FA trumps that? When was the FA Buy signal? What would constitute an FA based Sell signal?


Without some FA, surely you have to use more care and reserve? A good TA system will monitor a stocks performance far more tightly than any fundamental analysis could. Do you have a clear, documented and objective OGC exit strategy, elZorro? I suspect not, but technical trend indicators would provide exactly that. In the absense of any such exit strategy, you are the one that needs to use care and reserve!


Is that why you're sidelined at the moment? I'm not sidelined at the moment. I have acted on any recent Sell signals and continue to delay buying new stocks because of the global situation, but I still hold stocks that haven't triggered any Sell signals.


....yet your charting tells you to buy and hold OGC: confused.You sure have misunderstood me there! I thought I made it abundantly clear that right now OGC is most certainly NOT a buy! It IS of course a "Hold" in that it is in an uptrend and none of its trend indicators have triggered any Sell signals.


I don't need to look at any indicators, just buy on the dips....OK. So let's look at your FA based tentative 13/5/10 "Buy" comments (in red on the chart below) and see how they compare with TA based observations (in blue). It is pretty obvious that you would benefit from the use of some basic TA in timing entries.


You couldn't have picked the sudden change in price with TA, it would be too slow.What absolute nonsense! It is easy to see that the jump you refer to was very well flagged, being preceded by Bullish candlesticks and multiple Buy signals at just $3.20 days before the "sudden change in price".

http://i602.photobucket.com/albums/tt102/PhaedrusPB/OGC529.gif


That's where I get worried about TA systems: you look backwards, then extrapolate....Take another look at the chart. There is no looking backwards and the only extrapolation is with trendlines. (That's how they work). Even if all you did was buy when the Market Strength Indicator turned the plot from red to green you would have done well. Good opportunities to "top up" are flagged by short-term oscillators rising from "OverSold" levels as marked on the charts. No backtesting. No hindsight. No extrapolation.

I reckon you should stop worrying about TA systems elZorro - and start learning to use them to your advantage!

[Jay]

Appreciate your comments Phaedrus and the chart.
I got in quite late and it hit my "short term" trendline, However I now understand what you were saying and I did not look close enough at the overall longer term etc

[elZorro]

Thanks for the time you have spent on the reply Phaedrus, I don't mind taking a bit of flak if I'm learning something :) . This thread has been running for nearly 2 months, and we haven't had much input from many gurus. Maybe I could have framed the post better.


TA gave multiple clear Buy signals last September, and has given NO sell signals since then. What more could you possibly ask! You reckon FA trumps that? When was the FA Buy signal? What would constitute an FA based Sell signal?

Exactly, either an eyeball or TA spotted an uptrend, but most of us sold out too early on this trend, and it looks like TA would have kept us in there. 1-0 to you.

I was talking about the last 2-3 months, when FA data from Oceana Gold informed the market that the uptrend would accelerate, as long as POG stayed high, and goldminers enjoyed the same price multiple as currently.

A good TA system will monitor a stocks performance far more tightly than any fundamental analysis could. Do you have a clear, documented and objective OGC exit strategy, elZorro? I suspect not, but technical trend indicators would provide exactly that. In the absense of any such exit strategy, you are the one that needs to use care and reserve!

I would consider selling if OGC's Mcap surpasses the equivalent of similar goldminers, keeping in mind that price multiple rules may change, as they must have in the last big drop. Several hundred million dollars has been added to OGC's value in the last month, it's now just over a billion.

I'm not sidelined at the moment. I have acted on any recent Sell signals and continue to delay buying new stocks because of the global situation, but I still hold stocks that haven't triggered any Sell signals.


Phaedrus 25th May: Bermuda and 4be, I have no idea how low the market will go. Neither has anyone else. What I do know is that right now it is very weak and still falling, a time for caution. For me, this means no buying until the market begins to show some sign of recovery - when the plot turns light green, for example.

I began moving to cash 3 weeks ago when the Market Strength Indicator first flagged significant weakness (the chart plot turned red). I haven't got much left to sell!

I took this to mean that you think there is very little chance of an appreciation in nearly all stocks for now, and that made me blink. I'd just like to point out that some are inevitably buying gold and goldminers instead of cash, and that has helped OGC in its market revaluation. Again, not something that is picked up with TA until the market reflects it.

You sure have misunderstood me there! I thought I made it abundantly clear that right now OGC is most certainly NOT a buy! It IS of course a "Hold" in that it is in an uptrend and none of its trend indicators have triggered any Sell signals.

I meant to buy in dips, and TA certainly helps pick those. FA will give an indication of how long the trend might continue, thus the strength of the buy signal. The market might be a bit slower to react.

OK. So let's look at your FA based tentative 13/5/10 "Buy" comments (in red on the chart below) and see how they compare with TA based observations (in blue). It is pretty obvious that you would benefit from the use of some basic TA in timing entries.

What absolute nonsense! It is easy to see that the jump you refer to was very well flagged, being preceded by Bullish candlesticks and multiple Buy signals at just $3.20 days before the "sudden change in price".

Can't blame me for being enthusiastic, after 4 years this was the best pick I'd had :)

http://i602.photobucket.com/albums/tt102/PhaedrusPB/OGC529.gif

Take another look at the chart. There is no looking backwards and the only extrapolation is with trendlines. (That's how they work). Even if all you did was buy when the Market Strength Indicator turned the plot from red to green you would have done well. Good opportunities to "top up" are flagged by short-term oscillators rising from "OverSold" levels as marked on the charts. No backtesting. No hindsight. No extrapolation.

Fair enough, I've done well anyway, but next time an opportunity like this comes along, I want to hold onto more of it.

I reckon you should stop worrying about TA systems elZorro - and start learning to use them to your advantage!

TA and FA both have their place, it's a great debate starter though..;)

[darksentinel]

Thanks for the time you have spent on the reply Phaedrus, I don't mind taking a bit of flak if I'm learning something :) . This thread has been running for nearly 2 months, and we haven't had much input from many gurus. Maybe I could have framed the post better.
Well if you hadn't posted it, then we wouldn't have such excellent insight from the guru :).

[elZorro]

Well if you hadn't posted it, then we wouldn't have such excellent insight from the guru :).

Hi Darksentinel,

Yes, those charts look quite flash. However if you have a look at the period around early September 09, where the trendline angles changed, there was a large dip towards the end of the month. Because the trendlines wouldn't have been well established, perhaps that's when a few exited. No direction from TA. By late October, there was another dip which finally allowed the shown trendline to be started. Sure, the share happened to be moving upwards the whole time, which should have kept people in. The same thing might be happening now, where the sudden change upwards is uncharted.

What will the TA people do? Are there so many of them, all using the same software, that the trendline patterns are reinforced?

In my defence Phaedrus, I was buying OGC heavily (for me) on 10th and 11th May, about in the lower middle of your bullish indicators. I hadn't bought in the few days before that. So I was pleased that I'd 'got my eye in' at last, and I'm sure it was partly TA but more FA that helped me with the decision.

[darksentinel]

Personally I find the medium-term analysis and charts very useful. I'm easily blinded by short-term trends (and knee-jerk reactions) and my FA-based long-term decisions appear to poorly match the world's currently very volatile market situation, so I'm trying to learn about and adopt some medium term TA.
In principle I'm a believer in FA, but in practice I feel that I need a solid grasp of both, and given the current volatility, I feel TA may serve me better. For now.
And I do wonder what would happen if everyone used TA (with similar benchmarks). :)

[Phaedrus]

In theory, if enough people used the same system with the same parameters it would become a self-fulfilling prophesy and TA signals would be infallible. Don't worry about it though - there is no chance whatsoever that such universal agreement would ever be reached. There has been a lot written about this subject - here are a couple of articles :-

http://www.investopedia.com/ask/answers/05/selffulfillingprophecy.asp
http://www.ftpress.com/articles/article.aspx?p=1399906

The topic is covered in some detail from page 16 on in this (http://books.google.co.nz/books?id=5zhXEqdr_IcC&printsec=frontcover&dq=technical+analysis+of+the+financial+markets&source=bl&ots=oZGfvU9_fk&sig=e37fjx) extract from Murphies "Technical Analysis of the Financial Markets".

[geezy]

bottom line: buy more OGC even at current prices :) , now the question is..when to sell.. NEVER? :D

[elZorro]

bottom line: buy more OGC even at current prices :) , now the question is..when to sell.. NEVER? :D

Geezy, that comment is sure to have Phaedrus holding (his?) head in his hands! Surely we (FA people) can be a bit more sophisticated than that.

What I like about producing goldminers is the relative simplicity of their business. X amount of gold per annum, cost Y to extract per ounce, all can be sold, in this case at the spot market price known to all as POG. These businesses are normally profitable enough to repair any gear promptly, and staff are well paid (OGC: twice normal wages for NZ). So, little disruption to production, especially when open pit mining.

In OGC's case, the recent move to unhedged selling, the POG increase, and the new brownfields finds right near their setups, have created perfect conditions for a sharp increase in profitability in the months ahead.

We need to keep a good eye on the price multiples for other miners. I think the really big goldminers (Barrick, Newmont et al) enjoy a price multiple (MCap) of up to 10x their gross profit on gold sales per year. So let's be conservative, and give OGC just 5x.

OGC should recover 300,000oz this coming year, and if it was all sold at the current POG of about US$1215, GP would be around US$170mill, give or take. At the current low exchange rate, that conservatively values each NZ share at NZ$5.47 :)

BUT: POG could drop, the exchange rate could vary, the price multiples might not be valid in a new order, and OGC's current P&P reserves within NZ are small by comparison with many o/s miners. This factor can also be used in mining valuations. This is another really good reason for OGC spending $7mill right near their operations, to convert their M&I reserves to P&P, and to most likely find more gold as well.

All in all, I think there's still room for the OGC SP to move upwards. It does look volatile out there, so the TA people might have to wait a while for their trendlines..but Phaedrus might have something to say about that ;).

[Phaedrus]

If you have a look at the period around September 09, there was a large dip towards the end of the month. Because the trendlines wouldn't have been well established, perhaps that's when a few exited. No direction from TA.You have to know what to look for, elZ!

http://i602.photobucket.com/albums/tt102/PhaedrusPB/OGC531.gif

Let's put ourselves in the position of someone that wanted to buy OGC, but was very sensibly delaying their purchase because OGC was in a downtrend. By point (1) there was a confirmed trendline in place and potential buyers would be watching closely as the downtrend continued and the trendline was confirmed again and again.
At point (2) the trendline was finally broken, giving a Buy signal. This was confirmed by the RSI(14) rising from its "OverSold" level at point (3) and the Market Strength Indicator going from red to green at point (4).
Now, while this looked to be a very clear, well confirmed signal, nothing is certain and we must ask ourselves this question :- "What would the market have to do to make this Buy decision wrong?" Answer :- OGC would have to make a new low, continuing the downtrend that we were hoping had ended. Standard practice is to place a StopLoss just below the previous support level and sell if this is broken. OGC proceded to head North, though, and buyers would begin to relax a little. By point (5), a very satisfactory Uptrend was in place. Prices then began to slide a little and recent buyers would be monitoring this carefully, watching for any break below wherever they had set their StopLoss. Note though that the RSI never fell to anywhere near its previous level and the MSI had not turned the plot Red. In spite of falling a little, OGC was still relatively strong. No Sell signals had been triggered and recent buyers would not be overly concerned as yet.
From point (6) prices rose a little, enabling buyers to draw a tentative trendline (light green). By point (7) the previous resistance at point (5) was overcome and the uptrend confirmed as OGC made a higher high after the higher Low at (6). When Resistance is broken, it often becomes Support and that is exactly what happened here at point (8).
OGC continued to rise and by now it was obvious that the uptrend had accelerated, leaving the light green trendline behind, so a new tentative trendline was drawn linking points (6) and (8) (dark green). At point (9) this became a confirmed trendline as the uptrend continued.

No direction from TA? I disagree. Strongly!

[elZorro]

You have to know what to look for, elZ!

http://i602.photobucket.com/albums/tt102/PhaedrusPB/OGC531.gif

No direction from TA? I disagree. Strongly!

Yes, I see what you mean Phaedrus, resistance became support, and there were a couple of changes for trendlines. If I have a small niggle with your argument, it is that the interpretation could have been a step change upwards in the SP at (4) which was followed by a dip, and a trendline between that (unmarked) dip point and (6) is still heading negative.

Certainly, someone following the market with a holding would not have missed out, if using TA to add to their position.

In a market the size of NZ's, I would think that it would be quite easy for TA traders to have some effect on the market for certain shares, and I'll get a book to start reading up on this and other techniques.

For now, FA suggests the OGC SP will continue to rise towards its 5x multiple. The chances of positive press releases coming out soon can only help. (All other factors staying the same). Remember, the gold grades going in for processing at Macraes have a huge effect on profitability too.

[elZorro]

Copied from the Stockhouse forum, yesterday: some people discussing a cup and handle formation for OGC, whatever that is..


Martin:
I believe the Jan-April period could be interpreted as part of the cup. Technical analysis is as much art as science anyway. But no matter how we look at it, it is bullish both technically and fundamentally. What I like most is that is has been moving up without any additional news announcements. This means it IS IN FACT being re-rated upward by the market due to the hedges coming off.
GLTA

TA: As much art as science.. I like that guy GLTA.

Seriously, follow up some of the latest posts on Stockhouse, less rambling and more serious investors there now.

From the ODT in the weekend: a savvy move by OGC.

http://www.odt.co.nz/the-regions/central-otago/108210/8-million-even-bigger-digger


$8 million even bigger digger
Sat, 29 May 2010

Oceana Gold's 348-tonne Hitachi EX3600-5 mining excavator, here working at the Macraes mine, is about to get some help from a 360-tonne digger arriving soon.

Oceana Gold (New Zealand) Ltd will take delivery later this year of a massive 360-tonne mining excavator worth about $8 million.

The Hitachi EX3600-6 excavator, purchased from CablePrice (NZ) Ltd, will be the largest excavator in the Oceana Gold fleet, and one of the largest operating in New Zealand.

Due to its size, the new machine will be shipped from Japan to the Port of Timaru in 20 pieces and will require 16 truckloads to transport its components to the Macraes operation for assembly.

Two 80-tonne cranes will be used to assemble the excavator, CablePrice Otago-Southland regional manager Bruce Forrester said.

The excavator produces a maximum 1944 gross horsepower and a whopping 8346Nm of torque from its 16-cylinder turbocharged direct-injection engine. It is capable of a maximum digging depth of 3.91m and cutting height of 16.33m. The fuel tank holds more than 7400 litres of diesel.

The machine will be able to load a 191-tonne payload haul truck in five to six passes and is expected to move more than 25 million tonnes of overburden a year.

The new excavator will work alongside a 348-tonne Hitachi EX3600-5 purchased in 2005, which has clocked up more than 30,000 hours of operation at Macraes.

http://www.cableprice.co.nz/construction-equipment/hitachi/excavators/Large/EX3600-6/

[Lizard]

I am interested in what kept P in at around $2.10 in December when a downtrend briefly formed?

[JBmurc]

Action to take: Buy Oceanagold corporation
(ASX:OGC) at less than $3.50
Oceanagold is already well in production and is
indeed one of the top five gold producers on the
ASX. In the March quarter it produced 65,000
ounces of gold. Only Resolute mining (ASX:RSG)
and the monolithic Newcrest (ASX:NCM) and Lihir
(ASX:LGL) produced more gold last quarter.
Yet although it is in the big league, the company
looks very cheap in terms of gold production to
market cap. Oceanagold’s market cap per ounce of
gold produced in the March quarter is around 75%
less than Lihir’s or Newcrest’s.

[Phaedrus]

I am interested in what kept P in at around $2.10 in December when a downtrend briefly formed.... Extract from post #97, Page 7 :-
"With stocks in a strong uptrend (like this one) it is virtually impossible to beat simply holding the stock for as long as the uptrend continues. I have performed an awful lot of backtesting with OGC and have been unable to develop a short-term trading system that beats just holding it for the medium term. The chart shows 6 "medium term" indicators which are suitable for monitoring this uptrend."

NONE of these indicators were anywhere near triggering a Sell signal when OGC was around $2.10 in December (at the yellow line). In fact, at that time the MSI rated OGC as "strong". Why would you sell a strong stock in a strong uptrend?

http://i602.photobucket.com/albums/tt102/PhaedrusPB/OGC61.gif

The grey trendlines mark the "short-term" trends that comprise the "medium-term" uptrend. A short-term trader might well have sold at the grey arrow, but the focus of these charts is on the medium term trend.

NO SIGNALS - NO SELLING!

[Lizard]

Phaedrus, perhaps if you drew the graph to finish around early-mid December, it would be more obvious why those of us with limited charting ability might have got flicked out. I cannot see a reason not to draw an accelerated trend line.

I guess it comes down to the back-tested other indicators - however, the post #97 was only made last week, so I have difficulty determining how far back they were tested as the chart and indicators only show the current trend. The previous downtrend looks to my amateur eye as though it would not have produced so much leeway in the indicators. (Although my freebie chart got stuck on log-scale setting - which actually made the chart make more sense to me as it happened)

Impressive as this trade looks, I know that should I have been lucky enough to have entered at the correct time, I would almost certainly have got scared out by my weak TA long before now.

[Phaedrus]

Phaedrus, perhaps if you drew the graph to finish around early-mid December, it would be more obvious why those of us with limited charting ability might have got flicked out. I cannot see a reason not to draw an accelerated trend line.This chart finishes 15/12/09. There is no reason not to draw an accelerated trendline (light grey) so long as you realise that you have moved to charting the short-term trend. When this trendline was broken, that "Sell" signal (grey arrow) was unsupported by any confirmatory medium-term indicators. As an obvious exit point for short-term traders, this was not a bad place to be "flicked out" - and of course there was no reason at all why you couldn't buy back in again later.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/OGC61-1.gif


I guess it comes down to the back-tested other indicators - however... I have difficulty determining how far back they were tested as the chart and indicators only show the current trend.When backtesting to try and find a consistently profitable short-term trading system, I went back 3 years. Parameters for indicators are chosen to suit the desired level of trading activity. Longer time periods mean fewer buy/sell signals are generated.


The previous downtrend looks to my amateur eye as though it would not have produced so much leeway in the indicators.As down trends go, it wasn't all that steep - in fact for some medium-term indicators (such as the DMI shown here) it was not steep enough to trigger a Sell signal.


My freebie chart got stuck on log-scale setting - which actually made the chart make more sense to me as it happened.Log scales are good for long-term, wide-ranging plots like this one.


I know that should I have been lucky enough to have entered at the correct time, I would almost certainly have got scared out by my weak TA long before now.The important thing is not so much entering at the "correct" time, as entering at a good time - and NOT entering at a bad time. A short-term oscillator such as RSI(14) (default setting) will flag plenty of suitable entry points - no luck required! Your TA is not weak - you are simply focussing on short-term moves rather than the medium or long-term trend. The use of more conservative (slower) indicators would stop you being "scared out" of positions by short-term market fluctuations.

The Market Strength Indicator continues to work well with OGC. The rules covering its use are very, very simple.
(1) NO BUYING when the market is weak (the plot is red).
(2) NO SELLING when the market is strong (the plot is green).
As a trend-follower, to me this is just commonsense. (Devout contrarians reverse this logic!)
For those who do not have access to the MSI, there are plenty of readily available conventional indicators that give essentially the same information. The 3 shown in this chart work just as well. It is easy to see that around December none of these were anywhere near triggering "Sell" signals.
The big advantage of the MSI is that you do not have to select a suitable time period. The big disadvantage is that it cannot be "tuned" to specific stocks should you want it to be more (or less) sensitive.

[Jay]

"For those who do not have access to the MSI, there are plenty of readily available conventional indicators that give essentially the same information. The 3 shown in this chart work just as well. It is easy to see that around December none of these were anywhere near triggering "Sell" signals.
The big advantage of the MSI is that you do not have to select a suitable time period. The big disadvantage is that it cannot be "tuned" to specific stocks should you want it to be more (or less) sensitive."

Thnaks again Phaedrus for your insight and teachings (thoughts), Very helpful.
I thought the MSI was of your construction and not available to us mortals :-)
I do use Metastock but not very good at programming my own indicators/ explorers - have done a few basic ones however.

[elZorro]

I have to admit that the TA graphs are quite interesting when there's money involved. The maths teacher at school never came up with a good reason for using linear and log graphs, but that's one of the few trickier (compared to multiplication) maths concepts that I've found useful in real life.

But enough TA, I say..have a look at this in-depth FA research ;)

Market Caps of some well-discussed NZX shares: as at yesterday's close.

TEL $3585M
FPH $1634M
OGC $1003M
NZO $ 548M
PGW $ 424M
FPA $ 405M
PRC $ 404M
ALF $ 97M
THL $ 76M
BLT $ 13M
GEL $ 10M
HGD $ 9M

I know some of those values have been wildly up and down over the years, but OGC management must be happy with the current ranking. As Mistymountain says, they've been here before. This time they'll be more careful with market perceptions I think. All the activity at Oceana Gold seems to be in the right direction at the moment.

[elZorro]

Oceana hits a record $4.40
By Simon Hartley on Fri, 28 May 2010 - ODT

Oceana Gold shares hit a record yesterday of $4.40 after gaining 15% in value.

It is the second time in a fortnight Oceana shares have risen 15% and beyond during a day's trading, having gained 18% in mid-May to trade at $3.80.

Yesterday's 15% gain pushed shares briefly to $4.40; before settling back to trade around $4.30; leaving Oceana with a market capitalisation of almost $800 million. It closed 56c up at $4.34.

The 20-year-old triple-listed Oceana took its principal listing to the mining-friendly Toronto stock exchange in June 2007, raising about $110 million at the time.

The eurozone sovereign debt issues and all-market volatility during the past three weeks has seen a resurgence of investors going to the historical safe-haven of gold - pushing spot prices to a record $US1238 ($NZ1858) on May 14, while yesterday spot gold was retracing earlier losses and trading up at $US1212.

Craigs Investment Partners broker Peter McIntyre said Oceana trading volumes were "solid" and higher than usual at 81,000 shares.

Australian analysts yesterday were predicting gold to reach $US1600 an ounce within a year. Mr McIntyre believed it would pass $US1450 within eight months.

He thought the more risk-taking Canadian-based investors in mining stocks were the likely driver of Oceana's recent gains, rather than the more cautious Antipodean investors.
Helped by gains in the DOW last session, OGC shares on the TSX should finish at about NZ$4.50. Most of the big revaluations of the share have happened first, over there.

If Mr McIntyre is about right, by the time the new digger turns up, with OGC perhaps reaching 400,000oz recovered per year, in about January 2011, the shares could be worth over $11 each (Didipio not factored in).

Not possible? If the Macraes recovery plant can handle 6Mtonne p.a., the grade would have to be better than an average 1.5g/t, more like 2.1g/tonne. Reefton becomes important, with its far higher grades. Or, like Oceana did a few years ago, the plant could be upgraded. With plenty of capital sloshing about, OGC can remove every bottleneck as it occurs, as long as the POG stays up, and their geologists keep finding better grades.

That new digger will move a lot of overburden at Macraes, but when they get to the good stuff at 1.5g/tonne or better, it will take 35 tonne with every scoop, so the spot price for that amount of gold will be at least US$1200 x 1.7oz = NZ$2,900 !

[COLIN]

That new digger will move a lot of overburden at Macraes, but when they get to the good stuff at 1.5g/tonne or better, it will take 35 tonne with every scoop, so the spot price for that amount of gold will be at least US$1200 x 1.7oz = NZ$2,900 !

A double-scoop for me, thanks!

[mistymountain]

Hey ElZorro... How about dividends... 2012 ? Cheers

[elZorro]

Hey ElZorro... How about dividends... 2012 ? Cheers

Hi MistyMountain, I haven't thought too much about dividends, but I guess by 2012 the NZ end of the operation should be very tidy and going extremely well. But by then something should be happening at Didipio, capital equipment and preparation costs might be a better use for any spare cash. I'm new to all this, and the few dividend cheques I have received have not been a major source of cashflow.

To be honest, the fairly clear opportunity for a big capital gain on the OGC shares is my main interest at the moment.

If a dividend were to be paid, how many cents per share would be expected?

A bit of a dip in the SP, developing in Aussie. This item (below) might explain it. Gold dropped $15 overnight before recovering somewhat, but it could just as easily go the other way in a day or two.
Again - it's well over $1200, all is fine.


Bloomberg

Canada Stocks Fall as Gold, Copper Drop on Rising U.S. Dollar
June 03, 2010, 1:18 PM EDT
Canadian stocks fell, led by materials producers, as the U.S. dollar advanced for a fifth day and concern mounted that Chinese demand for industrial metals will diminish.

Barrick Gold Corp., the world’s largest gold-mining company, dropped 2.3 percent as the U.S. currency rallied following reports of expansion in U.S. service industries and a decline in initial jobless claims there. Teck Resources Ltd., Canada’s largest base-metals producer, lost 4.1 percent after the chiefs of the world’s two biggest copper-mining companies said business may suffer from China’s efforts to cool its economy.

The Standard & Poor’s/TSX Composite Index retreated 66.94 points, or 0.6 percent, to 11,713.73 at 12:39 p.m. in Toronto.

“China has been by far the largest force supporting the global economic recovery,” said Marcus Xu, director of equity investments at Genus Capital Management in Vancouver, which manages about C$1.6 billion ($1.54 billion). “If that softens up, that’s going to be having a very big impact on the future of the market.”

The S&P/TSX has tumbled 4.7 percent since April 26 as China has taken steps to rein in rising housing prices and investors speculated austerity measures in Europe may inhibit economic growth.

Copper retreated for a fourth day after chief executive officers of Freeport-McMoran Copper & Gold Inc. and Codelco said China’s plans to restrain its economy threaten to reduce demand for industrial metals.

Coal Demand

Teck, which also sells coal for use in Chinese steel mills, lost 4.1 percent to C$34.58. Demand for the fuel will be slowed by the Chinese government’s measures to cool the property market, Wu Chenghou, a senior advisor to the China Coal Transport and Distribution Association, said at an industry conference in Shanghai today.

Copper producer Quadra FNX Mining Ltd. slumped 5.7 percent to C$12.82. HudBay Minerals, which mines copper and zinc in Canada, retreated 3.8 percent to C$11.49

S&P/TSX gold companies fell for the first time this week as the U.S. dollar gained against the euro, yen, Canadian dollar and British pound, leading to lower gold prices.

The U.S. currency gained after the Institute for Supply Management’s index of non-manufacturing businesses in the U.S. held at 55.4 for a third month. Readings above 50 signal expansion. Also, first-time unemployment claims decreased by 10,000 to 453,000 last week, the U.S. Labor Department said.

Barrick dropped 2.3 percent to C$43.79. Kinross Gold Corp., Canada’s third-largest producer of the metal, declined 2.1 percent to C$17.72. Eldorado Gold Corp., which mines in Turkey and China, slumped 2.6 percent to C$17.58.

--Editors: Stephen Kleege, Joanna Ossinger

To contact the reporter on this story: Matt Walcoff in Toronto at mwalcoff1@bloomberg.net.

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

As it happens, a drop of US$20 in POG would impact each share in OGC by 17c or so, IF they happened to sell all their annual production at the same point in time. That's how much the share dropped today, for a short while. Of more interest to long-term holders (like me) will be the ability of the POG to steadily improve in the face of market unease and continuing demand.

No doubt about it though, the price of OGC shares is strongly tied to the gold price, even now, when many would consider a broad revaluation upwards is justified.

Still dropping late in the day, tempted..but what would Phaedrus say?

[mistymountain]

Yes there is quite a bit of volatility associated with the POG however looking at the bigger picture OGC was in a significant uptrend before POG was a factor.

Ironically stabilising credit markets as opposed to financial volatility may well have contributed to OGC becoming revalued upwards.

I think with resource upgrades, mine extensions and Didipio on track there is significant growth to come.

POG is the icing on the cake...

[elZorro]

Hi there MM, I'm looking forward to press releases for the next big revaluations.

Looking for bottlenecks to production, as I'm sure OGC will be doing, there are a few articles mentioning the autoclave. Turns out OGC has a market advantage there, from doing some of their own developments.


Gold producer has ‘record year’ Mining NZ

Basking in the confidence of record gold production of 300,044 ounces in the 2009 financial year, New Zealand’s biggest gold producer, OceanaGold Corporation is buoyant about the prospects for the coming year.

OceanaGold, whose two mines at Macraes in east Otago and its Reefton mine on the West Coast are in full production, had what chief executive, Paul Bibby, described as “a record year” in 2009 with both gold sales and cash costs “finishing ahead of guidance” issued at the beginning of the year.

“The New Zealand operations have now demonstrated consistent operating performances over the past six quarters, and this provides a stable production platform for the company moving forward,” says Bibby.
Recently, Oceana announced a 259,000oz increase in the mineral reserves at its Macraes opencast mine, in addition to an increase of 495,000oz posted at the end of last year.
“There is a significant resource base at Macraes, and over the past few months we have added three years to the mine life, extending the operation out to 2016,” Bibby says.
The increase in reserves came as the result of a capital raising last year that funded exploration at both Macraes and Reefton.
The company has no fewer than seven exploratory drills working at the moment, six of them at Macraes, while the seventh at Reefton has added 122,000oz in reserves there.
The strengthening outlook for the company encouraged usually mining-shy New Zealand investors to hike the price of locally-listed shares by 79% to $2.50 in January, a gain they have built on since.
The company’s guidance for gold production in calendar 2010 is just below last year’s record, in a range of 270,000-290,000oz.
Bibby says the cash cost of each ounce sold last year was $US411/oz, which he says is a “competitive level”.
A major contributor to this has been the highly efficient autoclave at Macraes, which processes concentrates from both there and the mine at Reefton.
The autoclave, one of only 10 in the world modified to process gold, was installed by Perth-based Gold Resource Developments (GRD) before it spun the Macraes operation off as Oceana Gold in 2004.
Without the autoclave, only 70% of the gold in the Macraes rock could be recovered, and only an uneconomic 15% at Reefton; with it the extraction rate for both is around 85%.

The “pressure-cooking” technology for gold was first developed by global mining giant Newmont Mining Corporation at its Twin Creeks tenement in Nevada, and was extensively modified by GRD and OceanaGold at Macraes.
The modification work was supervised for both companies by OceanaGold’s chief operations officer, Mark Cadzow.
“The reason the autoclave is so economic for us is that we produce a concentrate first – a lot of other autoclaves around the world use whole-of-ore oxidation pressure,” Cadzow says.
Aside from reducing the bulk of material to be processed, concentration raises the sulphur grade beyond the minimum of 6% needed to make the reaction exothermic, or heat-producing, thus removing the need to add steam to the autoclave except at start-up.
The Macraes concentrate has about 12% of sulphur while the concentrate from Reefton runs to 22-23%.

A bit about the processing plant (mill) at Reefton:

http://www.isamill.com/downloads/CIM%20-%20May%202009%20-%20IsaMill%20Article%20on%20Macraes%20(2).pdf


Good use of a pressure cooker

It’s the only one in New Zealand, and one of only 10 in the world processing gold, but the autoclave at Oceana Gold Corporation’s Macraes site is a key to the viability of both its Macraes and Reefton goldmines. By HUGH DE LACY.

Without its autoclave, only 70 percent of the gold in the rock at Macraes could be recovered, and only an uneconomic 15 percent at Reefton. With it, the gold extraction rate for both is around 85 percent.

Autoclaves are essentially pressure-cookers and there are thousands of them working in a range of industrial processes throughout the world, but they come into their own in the goldmining industry when dealing with highly refractory ores from which the gold is difficult to extract.
The Macraes autoclave, which handles ore concentrates from the Frasers underground and Macraes opencast mines, as well as concentrate railed down from Reefton, was built by the former owner of the East Otago mine, Perth-base Gold Resource Developments (GRD), which spun the Macraes tenement off as listed company, Oceana Gold, in 2004.
GRD sank $20 million into the development and commissioning of the machine which was based on pressure oxidation technology licensed by its developer, Australian multinational Newmont Mining Corporation. Since then the technology has been further refined at Macraes under the direction of Oceana’s chief operations officer, Mark Cadzow.
“The reason the autoclave is so economic for us is that we produce a concentrate first – a lot of other autoclaves around the world uses whole-of-ore oxidation pressure,” Cadzow told Q&M. They include the Twin Creeks project in Nevada where Newmont developed the technology, making GDR/Oceana’s use of a flotation concentrate a world first.
Aside from reducing the bulk of material to be processed, concentration raises the sulphur grade beyond the minimum of six percent needed to make the reaction exothermic, or heat-producing, thus obviating the need to add steam to the autoclave except at start-up. The Macraes concentrate has about 12 percent of sulphur while Reefton runs to 22-23 percent.
The autoclave has a capacity of 57 cubic metres, is built from 40mm steel plate, has an overall length of 12.6 metres and an inside diameter of 3.5 metres. It’s lined with a proprietary membrane and two layers of acid-resistant brick, with the latter also used to divide it into three compartments. The first of these contains two agitators, and there is one in each of the others.
Apart from start-up steam, oxygen and quench water are all that is added to the autoclave compartments as the concentrate undergoes oxidation. The plant producing the oxygen is the second biggest in New Zealand after that at the Glenbrook steel mill near Hamilton??. At the rate of 180 tonnes a day, the plant takes oxygen from the air, cleans it and compresses it to liquid for storage in one 20-tonne high-pressure and two 75-tonne low-pressure tanks. The oxygen plant is manned five days a week but for the rest of the time is run remotely from Auckland, 1500 kilometres away.
The autoclave’s first compartment operates at temperatures ranging from 205ºC to 220ºC and the other two at 225ºC, with concentrate being fed in initially at the rate of up to 29 tonnes per hour at the operating density of 40 percent solids, though subsequent modifications now allow it to handle up to 40 tonnes an hour.
The machine’s life expectancy is about 30 years. Most parts are replaceable, and regular maintenance involves changing the acid-resistant bricks, as well as pipes and valves. Macraes is a round-the-clock operation and, with stops only for maintenance, the autoclave is in operation 95 percent of the time.
Q&M Vol.7 No.1 February-March 2010
All articles on this website are copyright to Contrafed Publishing Co. Ltd.

See the item in on the ASX today: latest presentation from the website but with some mods. For example there are now 18 geologists and field assistants working at Reefton, another 5 staff. They are very keen on Reefton.

Are we going to have to wait until the end of the year to get the updated reserves and resources chart? We can at least make a start on some figures ourselves. See the coloured chart showing the new drills at Frasers for example. The bright red ones are the go. Note the radius of these blobs is about 100mtr.
Using college maths, 6mtr depth@5.08 g/t x 100mtr radius is about 61,000 oz.
11mtr @2.72g/t is 60,500oz
13mtr@6.78g/t is 178,000 oz.

That's assuming the whole blob is the same grade, and these are the sweet spots, but even so, Frasers could be upgraded by at least 500,000 oz, or a GP of about $500mill at todays prices (underground is a bit more expensive, but these are big grades). If that's interesting, why the sudden extra exploration at Reefton? Expect even better from those sites.

If the good news keeps going, maybe we'll see plans for another autoclave at Reefton (or Macraes). The whole operation seems to be fairly tied to the one plant, and it's not as if they can get the special ore processing done anywhere else in NZ.

[elZorro]

Oceana Gold still struggling to make an impression on the Aussies, maybe there are plenty of miners to choose from over there. Despite some reasonable purchases today, OGC's only 2% up on the ASX (beats the main market, just 1% up).
If their recovery price is US$450 (assume good grades next calendar year, 280,000 oz) and POG sits at $1240, a 5x multiple prices OGC at NZ$7.31 per share, or AU$5.93.

Which might mean those asks are a bargain, or not..

MistyMountain is probably right, we need both a stable credit market and a high PoG for OGC to shine?
Today didn't turn out like I thought it would. Still, it'll be interesting to see what happens to gold overnight, and what the TSX does.

[elZorro]

Very quiet day today. At least there should be some good news in June, as we're going to hear about Round Hill, one of the deposits at Macraes.


MELBOURNE, Australia, Nov. 10, 2009 /CNW/ - OceanaGold Corporation (the "Company") is pleased to announce an updated mineral resource estimate for the Macraes Goldfield located in the South Island of New Zealand.

The Macraes Mineral Resource Inventory, updated to June 30, 2009 has increased against the previous, December 31, 2008 inventory by 153,000 ounces of Measured and Indicated Resource and 1,291,000 ounces of Inferred Resource. The majority of these ounces can be attributed to the addition of the Round Hill resource to the inventory.Paul Bibby, CEO commented, "This updated resource estimate has materially increased the resource base at Macraes and is an important step towards our objective of extending the mine life of the operations in New Zealand. The current brownfields exploration drilling program is active on a number of fronts, particularly Round Hill, where the drilling is focused on upgrading Inferred Resources to the Indicated category. This program will be completed this quarter and will allow us to undertake a study to examine expanding the mineable reserve."

We now have:


June 2010 report:
EXPLORATION
Exploration expenditure for the first quarter totalled $1.8 million.
New Zealand
Macraes Goldfield
The drilling program at the Round Hill deposit was completed during the quarter with results now being reviewed. This program consisted of both an infill and step out program and the Company expects to provide an update on the results during the second quarter.

An infill drilling program utilizing two reverse circulation (rc) rigs continued to operate at the Frasers pit stages 4C and 5. 3,554 metres of drilling was completed during the quarter and this program is aimed at improving confidence of the in-situ resource. This program is expected to be completed during the second quarter.

J. Taylor from miningstocks.com in Vancouver is keen on OGC (has been for months), gave it and another share a plug on BNN (Business TV news channel) on 18 May at least. He used such terms as 'emerging juniors', 'soon to be household names', 'under the radar' and 'surprising to the upside'. The turnover was high the next day, but it didn't take off pricewise until the 26th May.

http://www.miningstocks.com/

[elZorro]

Dug this link up off the Stockhouse thread: again OGC mentioned.


Gold: The Only Asset Worth OwningBy Eric Jackson, Senior Contributor 06/10/10

Eric Sprott founded Sprott Asset Management in 2001 and has over $5 billion in assets under management. He has been an outspoken gold bull since 2000 and warned that the bursting of the Nasdaq bubble was the start of a long-term deflationary trend that is playing out. I met him last week in Toronto for an interview.

EJ: You've loved gold for a long time but, when the crisis hit in 2008, gold and junior miners got killed like everyone else. How do you explain that?
ES: I treat what happened to gold stocks in 2008 as anomalous. Now, two years later, gold's at a record price and gold stocks have come back from an absolute pasting. I'm not convinced the market is always right. The market can be very wrong for a certain time period. I remember in 2006 when homebuilder stocks rallied 60% because people thought housing was turning.
We love gold and silver stocks. I'm still bullish on my prior stock picks of junior miners.
[At the May Value Investing Congress, Sprott recommended OceanaGold Corp., which is listed in Toronto under OGC, Avion Gold (AVGC.PK), and East Asia Minerals (EAIAF.PK).]
Why? Because there could be times in the life of investing when people only buy one thing. That's what happened in the mid-1930s. They only bought gold stocks. So much so, there were 80,000 gold mines in the States then because they could get financing.

I just get the feeling that that could easily happen again. When you look at a system that's in trouble, you think: what's the one thing I could do to get through it? You're thinking survival, because it's not going to be fun. By owning gold, you can survive it because it will have its purchasing power vs. anything out there. If we're still eating food and trading things, you will be able to use gold to buy those things.
EJ: So you see us staying in a deflationary environment?
ES: I do, certainly for paper assets. I think you might end up getting necessary inflation in food, energy, precious metals, where there could end up being real shortages.
EJ: Is that why you like energy?
ES: Yes. Unfortunately, one of the things that could happen if the whole financial system has a problem is that your whole ability to produce things goes down. If you can't borrow money in the energy business and you can't drill, your production is going down this year... immediately.
The same thing happens in agriculture. When they had the credit crisis, the farmers couldn't buy fertilizer -- just as little as a year ago. The shortages could develop quickly because of financial problems. So prices will initially drop due to a lack of demand, but then supply plummets.
Press releases from OGC often come out on a Monday, three of those left this month ;)

[elZorro]

There was a whisper from someone on the Stockhouse thread a few days ago, no-one believed them, but looks like it was the real deal..


Standard & Poor's Announces Changes In S&P/TSX Canadian Indices
Canada NewsWire

TORONTO, June 11

TORONTO, June 11 /CNW/ - Standard & Poor's Canadian Index Operations announces the following index changes as a result of the Quarterly S&P/TSX Composite Index Review. These changes will be effective at the open on Monday, June 21, 2010:
<<
S&P/TSX COMPOSITE INDEX
-----------------------

-------------------------------------------------------------------------
ADDITIONS
---------
-------------------------------------------------------------------------
Live Composite
Issue Name Symbol 60/Completion GICS Sector Index
-------------------------------------------------------------------------
BlackPearl Exploration
and Production Ltd. PXX Completion Energy
-------------------------------------------------------------------------
DundeeWealth Inc. DW Completion Financials
-------------------------------------------------------------------------
First Capital Realty Inc. FCR Completion Real Estate
-------------------------------------------------------------------------
Fronteer Gold Inc. FRG Completion Materials
-------------------------------------------------------------------------
Harry Winston Diamond
Corporation HW Completion Materials
-------------------------------------------------------------------------
Questerre Energy
Corporation QEC Completion Energy
-------------------------------------------------------------------------
Ventana Gold Corp. VEN Completion Materials
-------------------------------------------------------------------------
Westport Innovations Inc. WPT Completion Industrials
-------------------------------------------------------------------------
>>

Changes to the S&P/TSX Composite Index will also affect the S&P/TSX Capped Composite Index. Stocks added to or removed from the S&P/TSX Composite Index will also be added to or removed from the appropriate Global Industry Classification Standard (GICS) sector index.


<<
S&P/TSX GLOBAL GOLD INDEX - JUNE 2010 - QUARTERLY REVIEW
ADDITIONS
---------
Issue Name Symbol Exchange
Anatolia Minerals Development
Limited ANO TSX
Andean Resources Ltd. AND TSX
Banro Corporation BAA TSX
Fronteer Gold Inc. FRG TSX
OceanaGold Corporation OGC TSX
Premier Gold Mines Limited PG TSX
Ventana Gold Corp. VEN TSX

DELETIONS
---------
Issue Name Symbol Exchange
Extorre Gold Mines Limited XG TSX


S&P/TSX GLOBAL MINING INDEX - JUNE 2010 - QUARTERLY REVIEW

ADDITIONS
---------
Issue Name Symbol Exchange
Andean Resources Ltd. AND TSX
Banro Corporation BAA TSX
Century Aluminum Company CENX NASDAQ
Dundee Precious Metals Inc. DPM TSX
Harry Winston Diamond Corporation HW TSX
Hecla Mining Company HL NYSE
Imperial Metals Corporation III TSX
International Coal Group, Inc. ICO NYSE
OceanaGold Corporation OGC TSX
Premier Gold Mines Limited PG TSX
Ventana Gold Corp. VEN TSX

DELETIONS
---------
Issue Name Symbol Exchange
Extorre Gold Mines Limited XG TSX
Forsys Metals Corp. FSY TSX
Vale S.A. ADR VALE NYSE


S&P/TSX GLOBAL BASE METALS INDEX - JUNE 2010 - QUARTERLY REVIEW

ADDITIONS
---------
Issue Name Symbol Exchange
Century Aluminum Company CENX NASDAQ

DELETIONS
---------
Issue Name Symbol Exchange
Anatolia Minerals Development
Limited ANO TSX
Fronteer Gold Inc. FRG TSX
Vale S.A. ADR VALE NYSE
>>

Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.


About Standard & Poor's Index Services


Standard & Poor's Index Services, the world's leading index provider, maintains a wide variety of investable and benchmark indices to meet an array of investor needs. Over $1 trillion is directly indexed to Standard & Poor's family of indices, which includes the S&P 500, the world's most followed stock market index, the S&P Global 1200, a composite index comprised of seven regional and country headline indices, the S&P Global BMI, an index with approximately 11,000 constituents and the S&P GSCI, the industry's most closely-watched commodities index. For more information, please visit www.standardandpoors.com/indices.


About Standard & Poor's


Standard & Poor's, a subsidiary of The McGraw-Hill Companies (NYSE: MHP), is the world's foremost provider of independent credit ratings, indices, risk evaluation, investment research and data. With offices in 23 countries and markets, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for 150 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit: www.standardandpoors.com.



This information should be important enough for a press release on Monday. I had a quick look at the other gold miners alongside OGC who were ushered in as well:
Standouts would be the tickers ANO, AND, FRG, PG as far as recent results. All on the TSX of course, with Mcaps of at least several hundred million.

I think this means that some bigger company buying policies will now allow their brokers to trade OGC, as it is on an approved index.

As an aside, there has been some indication of the sort of new gold levels that have been found near Macraes and Reefton. We can all have a guess at how many ounces are involved (probably quite a lot), but the pressure will be on OGC management to release data as soon as it is available.

[mistymountain]

Interesting news .... Thanks ElZorro. You're damn good at the research ! Cheers and thanks.

[elZorro]

Not at all MM, I saw the guts of the information on the Stockhouse site, posted yesterday :)
I just have a look there most days, and it's a good barometer on what will happen here.

Here's the link to the top of the OGC page, shows all posts below it.

http://www.stockhouse.com/Bullboards/SymbolList.aspx?s=OGC&t=LIST&f=26&l=50&c=2&r=0

Also posted there recently, a site that gathers info on broker trades each day, for each share. The OGC page shows a lot of daily interest by RBC and TD Securities, for example.

http://www.dresuccess.com/index.html?x=OGC

Tap in OGC, tick the box and GO, then scroll to the bottom to see the OGC data. A lot of churning of the share. On some days it must be good. RBC did the right thing on Friday, lots of buying, a net CAD$264,000 worth. Wonder what profit that will be getting on Monday :cool:

I think OGC is being used in the S&P/TSX Global Mining Index as one of only 36 representative goldmining companies. High praise.

[elZorro]

There are just 49 goldminers in the S&P/TSX Global Gold Index at the moment. They are all large caps, weighted at the top end. Barrick, Newmont, Kinross, Lihir, Semafo, Jaguar, Goldcorp are included.

http://www.standardandpoors.com/indices/sp-tsx-global-gold/en/us/?indexId=spcadntxg-usdcw--p-rna---

Because of the weightings with the more established miners (top 10 have 73.5% weight), the performance of the index is stable generally. It dipped in late 2008 but recovered quickly. Ticker 'XGD' on the TSX.


Press Release Source: Minefinders Corporation Ltd. On Monday March 15, 2010, 4:48 pm EDT
VANCOUVER, BRITISH COLUMBIA--(Marketwire - 03/15/10) - Minefinders Corporation Ltd. (TSX:MFL - News)(AMEX:MFN - News) is pleased to report that Standard & Poor's Canadian Index Operations has announced that Minefinders will be included in the S&P/TSX Global Gold Index and Global Mining Index effective at the market open on Monday, March 22, 2010. The S&P/TSX Global Gold Index and Global Mining Index are leading benchmarks of the global gold and mining industry sectors.
"We are very pleased to be added to the Global Gold Index and Global Mining Index," said Mr. Mark Bailey, President and CEO of Minefinders. "This is reflective of our transition from development into commercial production at our Dolores mine in Mexico and is an important milestone in the corporate development of Minefinders as we seek to grow our business and to create greater value for our shareholders."


Should OGC outperform as I hope, it will not affect the index much. But in theory, the profile of OGC will be a lot higher with some big investors.

It'll be interesting to see how trading on the TSX went, tomorrow morning. And MFL? did trade big volumes the day before it went on the index. Nothing startling otherwise?

[elZorro]

Not a bad day for OGC, this release ready for the TSX, but not the NZX or ASX?

http://www.oceanagold.com.au/images/documents/100615_ogc_sp_indexes.pdf


MEDIA RELEASE
15 June 2010
OCEANAGOLD ANNOUNCES INCLUSION IN THE S&P TSX GLOBAL GOLD
AND GLOBAL MINING INDEXES
(MELBOURNE) OceanaGold Corporation (ASX: OGC, TSX: OGC, NZX: OGC) (the “Company”) is pleased
to announce that the Company has been added to the Standard & Poor’s (S&P) TSX Global Gold Index
and the S&P TSX Global Mining Index. This will be effective at market open on Monday June 21st, 2010.
Chief Executive Officer, Paul Bibby commented, “This marks another important milestone for OceanaGold
and acknowledges the improved investor recognition and trading volumes as OceanaGold continues to
unlock value across the Company.”
- ENDS -

[Vtrader]

elZ,
Thanks for our 'daily dose', we must be the privelidged few to know information prior to release on NZX.
Considering a balanced perspective, perhaps it is not necessary to know what happens on the other side of the world where it is summer already.
A few threads back we recieved a lesson in TA tells all, best I can do is predict that OGC will continue to rise over time, but tomorrow up or down a little is a guess for me?
V.

[COLIN]

Not a bad day for OGC, this release ready for the TSX, but not the NZX or ASX?

http://www.oceanagold.com.au/images/documents/100615_ogc_sp_indexes.pdf

It was released by the ASX at 4.29 p.m. - but of course that was after market close. There was a bit of an upwards blip towards the close of trading there, doubtless due to some having earlier knowledge.

[elZorro]

Thanks for the comments Vtrader and Colin, I'd expect a bit of positive movement overnight, probably not as much as would occur with additional reserves or resources reports.

Vtrader, I'm shocked you think TA is the be-all, just because I was out-graphed by the guru...I'll be doing my swot for the next breakout (hopefully it'll be on the upwards side of those trendlines :)

Regards.

[COLIN]

Thanks for the comments Vtrader and Colin, I'd expect a bit of positive movement overnight, probably not as much as would occur with additional reserves or resources reports.

Vtrader, I'm shocked you think TA is the be-all, just because I was out-graphed by the guru...I'll be doing my swot for the next breakout (hopefully it'll be on the upwards side of those trendlines :)

Regards.

Well, it worked as expected, EZ.

[elZorro]

Thanks Colin, that was lucky, or was it FA doing its job again? :D

Stuff.co.nz marked OGC as a share to watch yesterday, nothing new from that short article though.
On Stockhouse, they are also wondering what OGC is likely to do pricewise, now it is in the indexes. Someone's doing some research.

Regards.

[elZorro]

Oceana valued at $1billion - ODT By Simon Hartley on Thu, 17 Jun 2010
Otago-based Oceana Gold became a $1 billion-plus company yesterday, hitting a record share price high following announcement of its inclusion on two international rating indexes on the Toronto stock exchange.

Shares in triple-listed Oceana gained more than 6% yesterday, from $4.38 to a record $4.65 after announcing international rating agency Standard & Poor's had included New Zealand's largest gold producer on its separate S&P TSX Global Gold Index and S&P TSX Global Mining Index.

Gold, and some non-Australian gold producer stocks, have enjoyed a revival during the past two months, resuming their mantle of safe-haven investments, on growing concerns over European sovereign debt issues in world financial and commodities markets.

Oceana bought back its entire forward-contract hedge book in March for $102 million, following a $119 million capital raising, and now sells 100% of its gold on the daily spot market - potentially adding up to $80 million to its bottom line if spot prices are sustained.

By December 2008, Oceana's shares had spiralled down to languish at 22c, valuing Oceana at $50 million, but at the all-time high of $4.65 yesterday its market capitalisation stood at more than $1 billion, Craigs Investment Partners broker Peter McIntyre said.
"This [share strength and index inclusion] will have exceeded the expectations of everyone, probably including themselves," Mr McIntyre said.
In a brief statement to the markets, Oceana chief executive Paul Bibby said: "This marks another important milestone for Oceana Gold and acknowledges the improved investor recognition and trading volumes as Oceana Gold continues to unlock value across the company".

Mr McIntyre said Oceana's inclusion on the S&P indexes meant it was "now on the radar" of big institutional investors who tracked the larger companies using the index ratings.

"For such a brief statement from Oceana, it's one of its most significant," he said.

The global gold index is an international benchmark on the Toronto exchange, while the global mining index covers mineral companies around the world, including 36 gold producers.

No report back from Stockhouse yet on what happened with other miners entering into the indexes. But OGC may be in a special place, as they are finding more gold near their mines, have one big mine temporarily out of action, and have the potential to perhaps ramp up production, by upgrading any bottlenecks.


Jun 17, 2010 (The Australian Financial Review - ABIX via COMTEX) --
Some commentators think the planned amalgamation of Lihir Gold and Newcrest Mining could give rise to opportunities for mid-level gold miners. Goldman Sachs JBWere suggests that industry consolidation could pave the way for groups such as OceanaGold, Avoca Resources and St Barbara to raise their production to 500,000 ounces.

Publication Date: 18 June 2010

I think the NZ and AU markets will need to adjust to the new TSX price on Monday.

[Vtrader]

And gold trading up to an intraday high of $1262 USD...
V.

[elZorro]

And gold trading up to an intraday high of $1262 USD...
V.

Hi Vtrader, PoG seems to be pointing the way ahead, this must give great confidence to the managers and executives at OceanaGold. Maybe we'll get a press release about Round Hill soon. Signs of short-term traders on the TSX: overnight 1.5mill shares traded in large blocks near opening at (or near) a new high, to trend downwards to Friday's close.

Yes, the market is bearish, the MSI confirms it, but OGC fights the trend. This company is going places in 2010.

[elZorro]

Here's a classic article pointing out that some goldminers aren't linked to the PoG as you'd expect them to be.

http://goldnews.bullionvault.com/gold_mining_061520104

Note these guys want you to buy bullion of course :mellow:

Not sure how OGC would look against the spot price, but it's surely outperforming it in a leveraged way. OGC goes up in fits and starts (usually big ones based on new market info) and then drifts back a bit (yes I know, not very TA of me is it?). Watch out for a press release next week, one is due. There has been a lot of analysing of core samples going on, millions being spent on drilling etc, so what are the chances that any press release will mention a few hundred thousand ounces of gold?

[elZorro]

No OGC news overnight, the TSX falling a little flat towards close.

They did say they expect to release details this quarter, not that they would.. so I have put my neck on the line just a bit.

I've had another thought: how would the ticker OGC look on the NZX50?

It's not there yet, but plenty of smaller cap shares are. I think the rules are that the share has to be listed on the NZX (not domiciled here? see AMP and APN) and likely to remain within the top 55 companies in terms of market capitalisation for the forseable future. NZX doesn't like changing the list too often.

I had a look at the NZX50 shares trading at the same low level that OGC often does here, and their MCaps are fairly low.

See ABA, CAV,EBO, MHI, NZS,PPL, RAK, SAN for example. All below $400 mill at the moment, lowest is $100 mill. OGC is 10x bigger in terms of MCap right now, and has been higher than $250mill for over 12months.

The trading volume here doesn't seem to be a criteria either.

I think the NZX50 is revised every six months, and recently there was an issue with Allied Farmers over inclusion. Will OGC be a contender this time around? :)

BakerSteel Capital Managers have advised the ASX that they bought a few quite a few OGC shares on the TSX in May (12th and 13th), and have been selling OGC on the ASX and the TSX since 8th June. Note, they don't appear to be involved on the NZX.

http://www.asx.com.au/asxpdf/20100629/pdf/31r1sp3rd7yf1q.pdf

Accordingly, their ownership of OGC has dropped from 9.27% to 8.21%. Guess they have made a very good return, is this financial year work? They could buy back in just as easily. They are the only substantial shareholder under Canadian rules as at 16 April 2010.

All major shareholders over 5% of a share are judged as strategic holdings, and have to be taken out from free market valuation calculations when considering being included in the NZX50. I'm not sure what happens with holders on behalf like CDS &Co, a clearing house in Canada that holds 39% of the shares.

Page 77 of the 2009 annual report has more details. Only 64 shareholders have more than 100,000 shares, out of 6254 shareholders, as at 16 April.

[elZorro]

OGC has just come out of a trading halt:
The press release on the ASX seemed to be about 5 minutes earlier.


GENERAL: OGC: OGC Increases Exploration Activities at Reefton Goldfield 11:41a.m.
OGC
29/06/2010
GENERAL

REL: 1140 HRS OceanaGold Corporation

GENERAL: OGC: OGC Increases Exploration Activities at Reefton Goldfield

29 June 2010

OCEANAGOLD ANNOUNCES INCREASE TO EXPLORATION ACTIVITIES AT REEFTON GOLDFIELD

(MELBOURNE) OceanaGold Corporation (ASX: OGC, TSX: OGC, NZX: OGC) (the
"Company") is pleased to announce that the Board of Directors has approved an
additional exploration program at the Reefton goldfield and surrounding
areas.

Highlights

- The exploration budget for the Reefton goldfield has increased by US$4.4M
for 2010/2011 (previous FY2010 budget for Reefton exploration was US$2.8M);

- The increased exploration activities will focus on new drill programs
targeting potential underground mining targets; a review of the Sam's Creek
project to examine the best strategic option to progress this deposit and an
increase to technical staff for the exploration department.

The Reefton goldfield is one of the most prolific goldfields in New Zealand,
historically having produced more than two million ounces of gold from hard
rock mining and an additional eight million ounces reportedly from alluvial
mining making it one of the more significant goldfields in Australasia.

The expanded exploration program includes a drilling program and
technical/economic assessments for a potential Reefton underground operation.
Historical production and recent drilling suggests continuation of economic
mineralisation below the Globe Progress pit. This will be analysed for the
potential to exploit via underground methods in addition to likely expansions
of the current open pit. Following the drilling campaign, a pre-feasibility
study will be undertaken. The expanded program will also include drilling and
technical/economic assessment of other underground targets.

An independent assessment of the Sam's Creek deposit will also be undertaken
to determine the best strategic option for this project moving ahead. The
Sam's Creek deposit, which is located at the northern end of the South
Island, contains an inferred resource of 770,000 ounces of gold (13.5Mt @1.78
g/t Au).

Paul Bibby, CEO commented, "The decision to expand the Reefton exploration
program and to undertake the economic studies represents OceanaGold's
continued commitment to invest in exploration at our New Zealand projects and
is a reflection of the significant prospectivity of the region."

Qualified Persons
Rod Redden, Exploration and Development Manager and Jonathan Moore, Principal
Resource Geologist, both of Oceana Gold New Zealand Limited are the
"qualified persons" pursuant to National Instrument 43- 101 of the Canadian
Securities Administrators. Both are members of the AusIMM.

The Qualified Persons, Mr Redden and Mr Moore have prepared the technical
information and approved the contents of this news release.

- ENDS -

For further information please contact:

Mr Darren Klinck

Vice President, Corporate and Investor Relations

Tel: +61(3) 9656 5300



Compared to the new digger's capital cost, a few million on exploration seems to be the cheap end of the work. Good to see they're concentrating on NZ at this stage.

Sam's Creek is in the Tasman area, here is the Crown Minerals Link for this EP:

http://data.crownminerals.govt.nz/PermitWebMaps/StaticReport.aspx?permit=40338

On 24th June, OGC were granted a change in conditions for the permit. By 14 years out (2012) they need to supply quite a bit of detail, including drilling results and mine design pre-appraisal, under standard terms.

No mention of Round Hill yet, but there has to be a good reason why management thought the above news was significant to the market. 700,000 ounces worth at Sam's Creek..plus 10Moz from the Reefton area using mostly crude methods. I think they are finding good grades there all right.

[mistymountain]

This is really encouraging. There is gold in them hills!

[elZorro]

This is really encouraging. There is gold in them hills!

Thanks for posting MM, July should be another great month for the OGC share.

http://www.ob-research.com/A_Record_Quarter_For_Goldminers

http://www.ob-research.com/ogc_q2_july29

Despite this, for some reason the TSX has gone off the boil with OGC overnight, people sitting back waiting to buy at a bargain. CAD$3.04 at close.

But OGC has not reached a standard price multiple for their gold sales, the market must be waiting for the inevitably good 2nd quarter report. I wasn't expecting this reaction or a nil report on Round Hill, so have been buying as the dip started. There will be better deals today I'm sure. Now where was that TA software website someone told me about? ;)

On the ASX at 11am, down to equiv of NZ$4.00! But good buying pressure down there. Someone bought 200,000 shares.

In this latest quarter OGC should have recovered 280,000 oz/4 = 70,000 oz with a gross profit of about $900 NZ per ounce, so GP of $63 mill, annually $252mill, and a very conservative 5x multiple covers the shareprice at its peak recently. But if their profit is in fact higher, and if later their recovery rate increases with extra plant, the market will revalue OGC upwards.

We have not been told of any issues with the mining or plant, so at the latest the share will be looking a lot better on 29th July.

[elZorro]

Just a bit more expansion on the press release earlier on the 29th.


OceanaGold to investigate underground goldmine
NZPA | Tuesday June 29, 2010 - 03:21pm
OceanaGold is looking at moving from opencast to underground mining at Reefton, on the West Coast, and at expanding its current opencast pit.

An underground mine could involve digging below the opencast pit at Oceana's Globe Progress mine, vice-president, corporate and investor relations Darren Klinck said today.

Oceana had increased its Reefton exploration budget from $US2.8 million ($NZ3.8 million) for 2010 to $US7.2m for 2010/2011, Mr Klinck said.

"We think that it makes sense to invest additional capital in the exploration programme and that's one of the areas, looking for the possibility of underground extensions."

Oceana had carried out similar work in Otago where it had commissioned the Fraser's underground mine in 2008 on the site of its existing opencast pit.

"The geology is different in Reefton, but the same sort of idea."

Digging the existing Reefton pit deeper was another option.

"Ultimately it comes down to the geology and what sort of gold bearing mineralisation is in place"

"It's still early, I don't want to speculate one way or the other," Mr Klinck said.

"But the fact we're investing this additional $US4.4m over 2010/2011 at Reefton demonstrates the amount of prospectivity we see in that area."
Fraser mine employs about 100 people. Whether a Reefton underground mine could employ a similar number would depend on the size of the resource and of the mine, Mr Klinck said.

However, any new development would mean more staff. Oceana currently employs 190 at Reefton, including full-time contractors.

Based on current reserves, the Globe Progress mine is due to continue until 2013/14. But the potential for expansion was good, Mr Klinck said. The results of drilling to date had been promising, backed up by strong gold prices.
The expanded exploration programme would include more drilling and technical/economic assessments for a potential underground mine.

"If you look back to 2009, there was virtually no one in exploration. It's been built up to 13 and it's now going to go to 18 ...
"We think the prospect of extending the opencast mine, along with any potential underground operations, is quite good."

Oceana would also conduct an independent review of its Sam's Creek exploration project, near Takaka, to examine the best way to progress the deposit which contained an inferred resource of 770,000 ounces of gold.

The Reefton goldfield is one of the most prolific goldfields in New Zealand. In the past it produced more than two million ounces of gold from hard rock mining and an additional eight million ounces from alluvial mining, making it one of the more significant goldfields in Australasia.

And from the ODT:


Oceana Gold paying more to exploreBy Simon Hartley on Wed, 30 Jun 2010
News: Business
Oceana Gold Corp has increased its exploration budget at Reefton by almost 60% to $US4.4 million ($NZ6.2 million) as it seeks to add a second underground operation to its open pit operations on the West Coast.
In 2008, at Macraes in east Otago, OGC commissioned Frasers, its only underground mine, which cost $US54 million to develop.
It is expected to deliver 55,000oz to 65,000oz a year, for at least three years.

OGC chief executive Paul Bibby said the increased exploration activities at Reefton would focus on new drill programmes to identify potential underground mining targets, reflecting the "significant prospectivity" around Reefton, which had historically delivered 8 million oz of loose, alluvial gold and 2 million oz from trapped, hard rock gold.

Another beneficiary of the increase will be OGC's 640ha Sams Creek tenement near Takaka, bordering the Kahurangi National Park, where there is an estimated 770,000oz of gold.

The prospect was discovered in 1974 and lies in rugged terrain, about 50km northwest of Nelson and has been test-drilled by Oceana in the past.

[elZorro]

MistyMountain, what do you think of this? A representative of OceanaGold is also speaking at a mining conference in Singapore in the middle of this month.


World's 5th biggest mining firm eyes RP
By Marianne V.Go (The Philippine Star) Updated April 05, 2010 12:00 AM


MANILA, Philippines - Harmony Gold Mining Limited, the fifth largest gold producer in the world with operations in South Africa, Australia and Papua New Guinea has expressed interest in investing in the Philippine mining sector.

Harmony expressed its interest in the Philipines to Environment and Natural Resources Secretary Horacio C. Ramos on the sidelines of the recently concluded Asia Mining Congress in Singapore.

“There is a lot of interest in the Philippines despite all its problems,” Ramos said.

According to Ramos and Mines and Geosciences Bureau (MGB) director Edwin Domingo, Harmony is looking, among others, at Oceana Gold’s Didipio copper-gold project which is currently on maintenance operation only.

Oceana Gold has suspended mining operations at its Didipio copper-gold project and is merely maintaining the site.

Oceana Gold has been seeking interested investors in the project.

Aside from Harmony, Ramos and Domingo said, CGA Mining Ltd. had likewise expressed interest in Oceana Gold’s Didipio project as well as Benguet Corp.’s King-King mines among other investment prospects.

The Japan, Oil, Gas and Metals National Corp. (JOGMEC), likewise, Ramos said, has also expressed interest in looking for copper-gold projects in Northern Luzon.

Ramos is actually offering JOGMEC several prospects in the CARAGA region as well as in Mindanao.

Unfortunately, Ramos said, JOGMEC is still wary of the security situation in the south.

MRL Gold Philippines, for its part, Ramos and Domingo said, assured that it is proceeding with its Agata nickel mine exploration and a sulfide ore plant.


OceanaGold Corporation Presents at 3rd Contract Mining Asia Conference, Jul-12-2010 03:40 PM 06/28/2010
OceanaGold Corporation Presents at 3rd Contract Mining Asia Conference, Jul-12-2010 03:40 PM. Venue: Hilton Hotel, Singapore. Speakers: Jose Leviste, Non-Executive Director, Member of Sustainability Committee and Chairman of Oceana Gold (Philippines).

[elZorro]

OGC being sold off in Aussie again, but is it a bargain there, or a time to sit back and wait?

The second quarter report will be discussed after ASX trading on 29th July, so 30th July should be interesting (the TSX would have responded to the news by then).

http://www.oceanagold.co.nz/images/documents/files/100419_oceanagold_q1_2010_financial_results_confer ence_call_webcast.pdf

Those of us who are tinged with a bit of goldbug dust might expect equities to fall a bit more in the meanwhile, and gold to go up a bit more. Will OGC follow the equities path, or the gold path? Commonsense says the latter, but the market has trashed OGC for no good reason before. That's why there were such spectacular returns over the last year or so.

The big difference this time, is that Oceanagold should have a really good set of books to put on show.

Round Hill: I have just read this old article at Crown Minerals, now I think I'm getting it.

http://www.crownminerals.govt.nz/cms/news/2010/oceanagold-lifts-gold-reserves-by-617-000-oz

Round Hill was filled in (backfilled), but with the higher PoG it can be opened up again. Lots of gravel to be moved no doubt. Hence the new digger?

[GR8DAY]

.........what goes up must come down elZorro.............punters now bailing OGC in favour of HGD??? ( LOL , yea right)

[elZorro]

.........what goes up must come down elZorro.............punters now bailing OGC in favour of HGD??? ( LOL , yea right)

I'm not going to poke fun at HGD, with my luck it'll announce a JV the next day..:)

It's a great shame there are not more FA inspections on OGC made by those on this forum who are qualified. I am only looking at the outside edges, without any real comparisons to other companies.

Is OGC destined to follow other shares down? There will most likely be a further market release(s) before the 29th July. Apparently the Round Hill data set is not completed yet. Most press releases come out after close of trading on the ASX, and that's because most of the shares are traded on the TSX.

Some on Stockhouse report needless/unexplained selling there, but on the upside, those who pick up this share near the bottom of any dip before 29th July should be fairly safe in getting an immediate return.

Gold has not strayed far from USD$1200, so that's something I guess.

Below is a very disturbing graph, that explains almost all that we see in the markets at the moment. Equities are becoming increasingly less favoured than gold. By all rights, OGC is in the right sort of game to cover itself. It's a good, sound business, and it's sitting on at least 3 or 4 goldmines.

http://www.usgold.com/about-gold

GR8DAY, all is not lost - some sign of a recovery later today: gold price is heading up, and a bit more interest in OGC on the ASX :cool:

[elZorro]

General notes:
Too early to say, but there was a return to higher volume of over 916,000 OGC traded on the TSX last night. The price ended up about the same as the day before. It's the equivalent of NZ$3.85. This could be the bottom of the dip (but then I'm not a TA person am I?). Looking for someone to supply a plot from one of those wizzy software packages that should help us out here. :cool:

Comment from Commoditybull8 on Stockhouse overnight:

They are estimating OGC's net profit for the 2nd quarter in CAD$ and guessing how much the share price would increase by..


That's close to my estimate of $26.5 M assuming $1196 gold, 480 COS, and expenses consistent with 2009.

I believe $5 is attainable as well, however I think it might take until October before that happens, considering the current economic circumstances. How favorably do you think people might react to these numbers? 10-20% increase from whatever the price is (assuming price $3 or less) within a couple of days?

The latest press release has me puzzled, was there another 8Moz of gold recovered near Reefton? If so, that is a big amount in world terms.

About 2Moz from the mine itself already:

http://www.mineralswestcoast.co.nz/gold_oceana.html

Here is the likely source of the 8million oz figure: all known placer/alluvial gold from the West Coast rivers and beaches. Fair enough.

http://www.crownminerals.govt.nz/cms/news/2005/news_item.2007-04-30.2348255044

[elZorro]

This link was kindly posted on the Stockhouse website. I haven't seen it before.

It's very detailed, a little bit out of date, but it's timely to look at it, good FA work.

http://www.ob-research.com/sites/default/files/OceanaGold%20April%2026%202010.pdf

Has anyone found any recent blog sites in Aussie running with OGC? All goldminers are dropping at the moment, I'm not taking it personally...

[elZorro]

At last some better news: the TSX finished higher for OGC, up to CAD$2.85 on good volume (NZ$3.88). Quite a bit being bought at the higher price too. Some bargain hunters evident anytime the price dipped during the session.

This mirrors the gold price, which had dropped 5% from its highs. The effect on goldminers for the duration is lower GPs of say USD$60 per ounce, about 10% of the high GP that they had. But their profits would be dented only if the PoG stays low for weeks, and it hasn't. It's rocketing back up at the moment, up almost $20 overnight (USD$1204 or so). OGC has dropped 17% from its high. That's obviously too much, if you expect that it didn't reach a proper valuation in the first place.

More good news, gold being purchased in India for their festival season.
http://www.stockmarketsreview.com/commodities/commodities_daily_update_precious_metals_base_meta ls_crude_oil_20100707_19904/

[elZorro]

That was a better day for us for a change..

We must keep a good eye on Stockhouse, there are some very clever traders posting some good data. Here's the latest one, a must read. Suggest you read the whole thing..

http://www.theaureport.com/pub/na/6735

A part of it below.. wow!


TGR: Alright, your portfolio has gone up something like 16,000% since 2002. You've identified precious metals as a sector that you want to be in. You see the second market correction as happening now, much like what happened in the 1930s after the big crash in 1929. But anyone can invest in gold stocks and not have your kind of success. What do you look for in companies that makes you trigger on those stocks?

CL: Actually, you raise a very good point. Individual gold stocks didn't go as high as gold. The gold stocks are lagging gold, which is a very interesting phenomenon. You know, we've traded commodities for a pretty long time, and usually commodity stocks go up exponentially to the commodity price, because each time the commodity price goes up, the profit margin just goes up exponentially. For example, gold producers' average cost right now is probably around $500. Back a few years ago, in 2007 the gold price was $600; you make a little bit of money. Then in 2008 you have $800, and you make a little bit more. Now it's at $1,200. Every gold producer is making an incredible amount of money, and the market doesn't appreciate that much. That's a very interesting phenomenon.

One thing will happen—either gold has to come down significantly or gold shares will go up significantly. I believe it's the latter; so, we could have a phenomenal gold run. I don't know when, but it could happen this year; it could happen next year. People will look at it and say, "Wow, that's a great run on gold stocks." It hasn't happened yet; we have actually seen gold stocks come down from the beginning of the year. As I was telling my subscribers, "Okay, just buy these bargains, buy these gold stocks." Traditionally, gold stocks are weak in June, July and August. In these three months, I want to load up as much as I can on gold stocks and I'm looking for a breakout after.
TGR: But are you looking at cash flow, earnings per share, ounces in the ground, management, jurisdiction, metallurgy—what are you looking at?

CL: That's a very good question; it's changing from time to time. Of course, jurisdiction is always very important because if someone comes to confiscate your mine, you're finished. Right now, we are in a bear market; cash is king, so I want to look at cash flow more heavily. If you have a significant cash flow—especially free cash flow—after all capital expenditures are paid, that's real money. That is very important to a company.

However, if market conditions improve and we have a blowout gold market, then you may want to look at how many ounces are in the ground—those will weigh more and more heavily (in an investment decision). But right now, we're in a defensive mode; so we're putting more weight on cash flow.

TGR: Another advantage you have over other newsletter writers is that you know people on the ground in China. We're told all kinds of things about China here, some of which are true, some are partially true. What's really going on there?

CL: The Chinese government has tried to put on the brakes, to slow down the red-hot economy. At some point this year, they're going to let their foot off the brake; they don't want the economy to really go down. They just want to slow it down. They're trying to crack down on the real estate speculation; the housing prices are coming down, which is a good thing. They probably want it to correct 20%–30%. It's creating some interesting opportunities for traders.

TGR: You said it was creating some interesting investment opportunities. What are some of those?

CL: Well, Wall Street and CNBC always exaggerate—they see a small correction, and they say it's a crisis. Part of it is the news media always wanting to catch your ear. But if you know what really goes on, you can buy when everybody thinks something is finished. Then you sell when sales start turning up, and then everybody in the news media says, "Oh, the correction is over!," and you can take profits. So, that's how we create a lot of trading opportunities.

TGR: You go against the popular sentiment? Is that what you do?

CL: It's not exactly against; I go with my own sentiments. When I see it is overvalued, I sell and, when I see it as undervalued, I start to buy. The more undervalued, more I buy. But sometimes when it goes down, you don't know where the bottom is.

TGR: What are some companies that are benefiting from the current economic conditions in China?

CL: Pulp and paper stocks will benefit. And the energy stocks—I owned some, and I want more focus on land-based drilling after the BP disaster. Actually, I sold all of my ocean drillers when news of the BP disaster first came out. When they first said the oil leak was 1,000 barrels, I started selling everything because I know it is impossible to leak only 1,000 barrels per day (bpd) in that gusher. I'm a pretty cautious person and, when I see that something goes wrong, I try to get out as soon as I can. That's my own money.

TGR: Your largest shareholding is in OceanaGold Corp. (TSX:OGC; ASX:OGC). In describing that company, you said in a recent newsletter, "It's not a homerun, but it's an easy double." Tell us why folks can double their cash with OceanaGold.

CL: My subscribers know that I recommended Oceana last year at $0.43. Right now, it's trading at about $3. It was my top pick last year; it will continue to be my top pick this year. The reason is pretty simple—this company has become a unhedged producer, producing about 300,000 ounces a year in gold. The company's (cash cost) guidance was $500/oz., but I think they tried to under-promise. They were producing at about 300,000 oz. last year at a lower cost. Compared with other producers on that scale, you can put OceanaGold neck to neck with other companies, like Semafo Inc. (TSX:SMF), New Gold Inc. (TSX:NGD; NYSE.A:NGD), etc. These companies are trading at $2–$3 billion market cap right now, and Oceana is at $700 million. That's why I say it could easily double.

Part of the reason is that they just unwound all their hedge contracts; this quarter will be their first unhedged production. Their base is in New Zealand, a very politically safe place. The company just got over a crisis; because of the credit crisis, they couldn't finish a mine. But now, they have three mines producing—all doing very well, and two of the three were built in about as many years. They have brand new mines generating incredible cash; I calculate more than $200 million per year at the current gold price. They're trading at about 3x cash flow, which is incredible; and each year, they have more than $100 million in free cash flow—that's after all the expenses. They're just going to continue to grow; and they can organically grow their existing projects and increase their gold production.

TGR: Do they have some debt? That might be one thing keeping their share price down.

CL: The total debt is $165M Australian (AUD), but it's due in two to three years and they generate more than $200M cash flow per year; so that debt can be easily serviced. I was talking to the company to see if it had the cash to buy back those debts, which are actually convertible at about AUD$4. I don't want to see those become converted; $4 per share is higher than current stock price, but I still don't want to see the dilution.

TGR: Is there growth potential?

CL: Yeah, they have another 120,000 oz. gold mine fully permitted and half built. They were forced to stop it in the midst of the credit crisis when their credit line was very tight. Now, they have a lot of cash so have a lot of options.

TGR: What mine is being ramped up?

CL: It's called Didipio—a gold/copper project in the Philippines. They also have three mines in New Zealand. They own a very, very large property in New Zealand where some 20 million ounces of gold have been mined before. Then there's very large exploration potential; they can do a lot of good things with their cash flow. They can do a lot of exploration; they can make their current milling more efficient to increase production. I wouldn't be surprised if New Zealand production increased by 10%–20% in the next couple of years. It should be clear that that's their future, so that's why I feel very comfortable about them.

[Vtrader]

Z, you really are the researcher, I appreciate your posts very much.
Whole market seems to have a different feel this week...
Different again next week...?
V.

[COLIN]

EZ: THanks for that article. Quite encouraging, I must say.

[elZorro]

Thanks for the comments Vtrader and Colin. Please keep posting with your thoughts- this is a NZ company going big, and I'd like to see it on the NZX50. It deserves to be there. Of course, we cannot get emotionally involved with share picks, or buy in a downtrend, etc...

Overnight the TSX ended with a peak price for OGC of C$2.92 or NZ$3.95 approx. The same original article (so positive for miners and OGC) I copied last night has already been copied onto Mineweb, so I assume it'll be all over the web in a day or two. Maybe it'll reach the Aussies, who are the least interested in the share most days..

I think the next few days should be positive for OGC, as long as the PoG stays where it is, or climbs back up. Any thoughts on the direction of gold?

Saturday: the answer is it will head back up (1210), OGC finished at the equivalent of NZ$4.10 on the TSX with good volume. OGC has an 11-14% gain needed to get back to its previous high, and we are also getting closer to the 29th report release.

[elZorro]

MINE: OGC:
OGC Announces Panel 2 Deeps Update at Frasers Underground 11:33a.m.
OGC 12/07/2010 MINE

REL: 1133 HRS OceanaGold Corporation

MINE: OGC: OGC Announces Panel 2 Deeps Update at Frasers Underground

MEDIA RELEASE
12 July 2010

OCEANAGOLD ANNOUNCES 20 METRES @ 3.73 g/t AU AT PANEL 2 DEEPS
- FRASERS UNDERGROUND MINE

(MELBOURNE) OceanaGold Corporation (ASX: OGC, TSX: OGC, NZX: OGC) ("the
Company") is pleased to announce results from an underground exploration
program at the Panel 2 Deeps area of the Frasers underground mine in Otago,
New Zealand.

Highlights
-Infill drilling within the P2 Deeps inferred resource boundary recorded
significant grades and
thicknesses including 20 metres of 3.73 g/t Au (UDH5729) and 9 metres of 3.39
g/t Au (UDH5762);
-Results to date are expected to extend indicated resource boundary and
therefore expand P2 Deeps reserves;
-The follow-up drill program at Panel 2 Deeps is underway.

P2 Deeps Infill Drill Program
In April 2009 OceanaGold reported high grade mineralisation encountered from
drilling at Panel 2 Deeps below the hangingwall shear and under Panel 2C of
the Frasers underground mine. Further infill drilling resulted in a resource
estimate for P2 Deeps which was announced on 14 September 2009 and included
over 0.5Mt of an inferred resource. Approximately 40% of the indicated
resource announced at the same time has subsequently been upgraded to
probable reserves and mine development of this area commenced in March 2010.

The first 14 diamond drill holes of an infill drill program targeting the
southern part of the inferred resource was completed in June 2010.
Significant intercepts are listed in Table A
below with good widths and grades reported in all holes. The widths and grade
tenor continue to appear as good as or better than the current Panel 2 mining
area.
An updated resource estimate will be calculated for release later this year
and it is expected that a
significant portion of the current inferred resources will be upgraded to
indicated resources and then
integrated into the mine plan as reserves.

N.B. The hangingwall shear refers to the geologically continuous mineralised
zone immediately below the over-lying waste sequence. In the underground
operation this is the principally targeted zone for mining due to its higher
and more consistent gold grades.

Figure 1 - Panel 2 Deeps area in relation to Frasers underground current
development design

Table A - Significant Intercepts from the Frasers Underground Panel 2 Deeps
Infill drill program
Hole ID From
(m) To
(m) Intercept
Length
(m)
True
Thickness
(m)
Grade
(g/t Au)
UDH5715 20.00 31.00 11.00 6.0 4.27
UDH5716 24.65 36.00 11.35 7.0 3.24
UDH5728 36.00 47.00 11.00 6.0 2.91
And 53.00 62.00 9.00 5.0 7.11
UDH5729 25.60 52.00 26.40 20.0 3.73
Including 25.60 32.60 7.00 5.0 4.55
And 37.00 43.95 6.95 5.0 6.21
UDH5730 34.50 52.00 17.5 6.0 3.52
UDH5731 38.50 44.00 5.50 4.5 3.74
UDH5732 16.30 25.20 8.90 7.0 5.29
UDH5733 28.00 32.20 4.20 3.5 4.29
And 37.10 43.90 6.80 6.0 2.96
UDH5734 50.90 69.75 18.85 12.0 2.53
Including 54.25 63.95 9.70 6.0 3.29
3
UDH5735 38.70 52.00 13.30 10.0 3.00
UDH5761 21.00 26.00 5.00 3.0 3.18
UDH5762 6.00 23.00 17.00 9.0 3.39
Including 12.00 23.00 11.00 6.0 3.77
31.00 34.20 3.20 2.0 6.32

Figure 2 below provides a plan view of the infill drilling program targeting
the sub-parallel P2 Deeps deposit
and the extensions beyond the current indicated resource boundary. A
follow-up drilling program is
underway and is focused on further expanding the indicated resource boundary
as well as to test the limits
of the area of mineralisation to the south and southeast where the deposit is
still open.
Figure 2 - Plan view of Frasers Underground P2 Deeps Infill Drilling Program

CEO Paul Bibby commented, "The resource at P2 Deeps, originally announced in
September last year, now represents the potential for an additional 1.5 years
of underground mine life providing we continue to be successful upgrading the
confidence of the resource through the infill drilling program. The results
from this most recent program further point to an expanding mineralised package
which should be integrated into the mine plan. We expect to be able to
determine the total extent of P2 Deeps through continued drilling programs
scheduled through to the year end."
Qualified Persons
Rod Redden, Exploration and Development Manager and Jonathan Moore, Principal
Resource Geologist, both of Oceana Gold New Zealand Limited are the
"qualified persons" pursuant to National Instrument 43- 101 of the Canadian
Securities Administrators. Both are members of the AusIMM. The Qualified
Persons, Mr Redden and Mr Moore have prepared the technical information and
approved the contents of this news release.

Quality Control Mr Jonathan Moore, B.Sc (Hons) Geology and Dip.Grad. Physics,
is the Principal Resource Geologist with
Oceana Gold (NZ) Ltd and is the Qualified Person under National Instrument
43-101 - Standards of Disclosure of Mineral Projects ("NI 43-101") for the
technical disclosure in this release and has verified the data disclosed,
including sampling, analytical and test data underlying the information
contained in this
release. The geological interpretation was completed by Mr Peter Edwards,
Senior Project Geologist, MSc (Hons) Geology, Grad. Dip. Business, Grad. Dip
Computing, MAusIMM. Samples, collected at 1m intervals from sawn diamond
core, were prepared and assayed by fire assay methods at the OceanaGold
facilities
at Macraes, New Zealand and the SGS facilities in Westport and Waihi, New
Zealand. Standard reference materials were inserted to monitor the quality
control of the assay data.

For further scientific and technical information (including disclosure
regarding mineral resources and mineral reserves) relating to the Macraes
Project, please refer to the NI 43-101 compliant technical report entitled
"Independent Technical Report for the Macraes Project located in the Province
of Otago, New Zealand" dated February 12, 2010, prepared by R Redden and J.
G. Moore and available at www.sedar.com under the Company's name.

- ENDS -

For further information please contact:
Mr Darren Klinck
Vice President, Corporate and Investor Relations
Tel: +61(3) 9656 5300

End CA:00197165 For:OGC Type:MINE Time:2010-07-12:11:33:52



3.5g/tonne in a 20 metre thick seam, that's very profitable to mine...
more good news.

[GR8DAY]

.....who's a happy man (or woman?) then ??!!

[elZorro]

.....who's a happy man (or woman?) then ??!!

Hi GR8DAY, a nice start to the week all right..:t_up:

elZorro is a bloke, just in case you were wondering..
(note to self: no sensitive posts in future, don't apologise for stupid comments..;) )

[GR8DAY]

LOL...gud one zorro!.........and enjoy the ride.

[corporateraider]

All of the pieces are starting to drop into place. Up until now the relatively small resources in NZ have been a brake on the share price.

I still think that the next profit result will give further impetus to the share price. Of course it won't tell anything new, but it will re-state the result without the hedging which I am sure has confused many.

Disc: hold a few

[Vtrader]

Some speculation recently regarding OGC and inclusion to the NZSX50.
After the flip flop with ALF in February, eligibility changes were threatened.
see pages 6,7 for current criteria regarding liquidity.
http://file.nzx.com/000/170/3723170.pdf

Document suggests methodology update due from NZX in July, and first implementation at September 2010 Quarterly review.
If there is possibility for OGC inclusion to NZSX50 at September review we will have plenty of time to do the math.
V.

[JBmurc]

20 METRES @ 3.73 g/t AU I'm jealous wish my goldies would announce a drill as good ----good one EZ

[mistymountain]

Good to read the last week of updates after a break away in the mtns and on Coast.

I'm still sticking with a SP $6 by Christmas... OGC is on a roll and growth opportunities just keep developing.

Wonderful! Even to a bloke ElZorro! Cheers

[Vtrader]

3 Days and no post from elZorro,
Has anyone seen him lurking around the mines? Likely dredging up some more information...
V.

[GR8DAY]

....think he's bailed Vt.....Im sure I wud have with those sort of gains.....damn, to think I looked hard at them at $1.60 not that long ago!!

[Vtrader]

During the absence of elZorro.
OceanaGold Corporation’s financial and operational results for the quarter and half year ended 30 June
2010 will be released following the close of the ASX market on Thursday 29 July (Melbourne time) and
will be posted on OceanaGold’s website at www.oceanagold.com.
The Company will host a conference call / webcast to discuss Q2 2010 Financial Results. The call will
take place at 7.30am on Friday 30 July (Melbourne time) / 5.30pm on Thursday 29 July (Toronto time).
Webcast Participants
To register please go to the “Bulletin Board” section in the Company’s website (www.oceanagold.com) or
copy and paste the link below into your browser:
http://event.on24.com/r.htm?e=228902&s=1&k=4934A66C3DC705ED979C5D7C07C5EF01
Teleconference Participants (required for those who wish to ask questions)
Local (toll free) dial in numbers are:
Australia: 1-800-287-011
New Zealand: 0-800-450-745
Canada & North America: 888-231-8191
All other countries (toll): + 1 647-427-7450
Playback of Webcast
If you are unable to attend the call, a recording will be available for viewing on the company’s website
from 9.30am on Friday 30 July (Melbourne time) / 7.30pm on Thursday 29 July (Toronto time).
- ENDS -

OGC lining up with many others reporting in the last week of July, will be an interesting week.
V.

[elZorro]

Hi there fellow OGC holders: I've been away on holiday for a week with the family, didn't get as far as the mines, it was Taupo!

GR8DAY thinks I might have bailed on OGC? not at all. It's at least 10 days until we see what will occur after the second quarter report. If you google this event, the time of release and ways to access it are broadcast all over the web. There will of course be a large positive difference in the gross profit figures between the last two quarters. Production should also be near a record.

I had another careful look over the Frasers Panel 2 Deeps report out last week. If this resource will extend the Fraser underground mine by at least 1.5 years as stated, and current ore taken out is nearly 1Mtonne per year, then we are looking at 1.5Mt of ore with a probable grade average of say 3.5g/tonne, or 170,000 oz. Let's be positive and assume a round NZ$1,000 per oz GP on that gold. There will be very little extra low grade ore to move, and the mine is well established. So this is an extra GP of $110million p.a. for 1.5 years above what was known before the drilling. And that's just the start of their latest exploration.

What on earth would happen if OGC found a way to remove the autoclave bottleneck that is there at present? This equipment is another ace in the hole - OGC look to have improved the recovery rates over other gold miners for some ores. The market would be very interested if the recovery throughput went up say 50%. So would the share price. Apart from the wait while more equipment was commissioned, there might be an issue with power demands. I spotted this submission from OGC: they are a major power user. In 2006 they used 110 million kWHrs, at least $11million worth.

http://www.med.govt.nz/upload/47062/126.pdf

Maybe the idea is to spread the capital equipment use out over more years. There might not be many other spots in NZ that can handle gear on their scale. Glass Earth have been trying to find something for several years, although Muirs and particularly WKP (Newmont has most of that location) look to be interesting. Nothing major has surfaced in Otago yet.

I read an interesting book over the week, "The Successful Investor" by William J. O'Neil. He proposes a brutal approach to selling shares if they have gone up 20-25%, and quitting if they drop less than 1/4 of that. Sure that system would work, but with OGC you'd be popping in and out of ownership.

There was one exception to his rule. If your analysis spotted a share that then went up dramatically soon after, you have to hold it for several weeks or months at least. These are for shares that are market leaders in their area. Some of the TA graphs for the types of American shares that fitted the category looked like OGC. OceanaGold is without doubt one of these very special shares that is taking a big run. I don't think the finishing post is in sight yet. :)

[GR8DAY]

....only joking Ez! hey that book and its philosophy sounds like a bit of me.....Im gonna chek out the book stores today thanks m8.

[Phaedrus]

I don't think the finishing post is in sight yet.Neither do I, but the really good thing here elZ is that you recognise that there IS a finishing post and that no uptrend lasts forever. Time after time here on ST you see people making really good profits - and then giving them back to the market. Do you have a defined exit strategy? Without one you are simply holding and hoping that you will eventually know when to quit.


I read an interesting book over the week, "The Successful Investor" by William J. O'Neil. He proposes selling shares if they have gone up 20-25%, and quitting if they drop less than 1/4 of that. Sure that system would work, but with OGC you'd be popping in and out of ownership. Indeed. So the system as proposed by O'Neil is no good - right? Firstly he violates one of the simplest and best investment rules. "Let your winners run". By selling out simply because you have made a gain of some arbitrary amount is foolish. Such an approach absolutely guarantees that you will never, ever, make big gains on any stock. Why sell an uptrending stock just because you have made a small profit?

Trailing stops can be useful though, especially for people with little TA expertise. Trailing stops at least follow the "cut your losers" dictum and limit the amount you give back to the market when the uptrend ends and the stock begins falling. As you have realised, elZ, the 5% - 6% figure as proposed by O'Neil is way too tight - especially for a relatively volatile stock such as OGC.

Here then, just for you, elZorro, are 5 suggestions that you might like to consider as part of your OGC exit strategy. Note that the trailing stop must be at least 20% (as set in Dec '09) to avoid your being prematurely flicked out of the ongoing uptrend.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/OGC719.gif

[elZorro]

Thanks for that Phaedrus, I will be able to use that info, I still don't have a package to plot trailing stops. O'Neil did say to let the winners run, and then showed how to identify them. So all in all, his system looked OK, but it was also a massive advert for his "Investor's Business Daily" setup, not sure if it's still online. The book was published in 2004: so not too sure you're going to find it in the bookshops GR8DAY. :( Try the second-hand bookshops, that's where mine came from.. Which begs the question: what happened to the previous owner of this book: did they make so much moolah that the book was redundant? One can only hope ;).

The site and a bit about these books: http://www.investors.com/Store/Default.aspx

I'm a bit happier knowing that one of the top TA chartists on ST also thinks OGC has a way to go yet. It's going to be a very interesting month.

Don't think this has been posted, some extra tidbits of info from OGC about Frasers.


OceanaGold says Frasers could last longer
By ALAN WOOD - BusinessDay.co.nz Last updated 05:00 13/07/2010

BETTER MARGIN: OceanaGold is benefiting from the high gold price and a decision to close out its hedge contracts in March. OceanaGold Corporation says potential exists for an extra 1 1/2 years of life at its Frasers underground mine.

This follows recent test drilling giving it further confidence in the Otago gold resource.

The goldminer's shares shot up 9.09 per cent, or 35c, yesterday to close at 420. They have retreated from a recent high of $4.76 but have been in an upward trend from a 12 month low of 103c.

The shares have been helped by a surge in the gold price.

OceanaGold's exploration budget has been extended with the increase.

The Frasers underground mine has been tested under a US$9m (NZ$12.7m) New Zealand exploration budget in 2010, including the Frasers-Macraes mine area in Otago and Reefton on the West Coast.

Infill drilling (drilling between existing test holes) within the Frasers resource known as Panel 2 Deeps was showing significant grades, investor relations vice president Darren Klinck said.

The P2 Deeps seam ran in parallel but 10-20 metres deeper than the existing Panel 1 and Panel 2C seams that were already being mined, he said.

Mining of the P2 Deeps seam could begin in later 2011 and a follow-up test drilling program was already underway.

Chief executive Paul Bibby said the resource at P2 Deeps, originally announced in September last year, now represented the potential for an additional 1 1/2 years of underground mine life.

That was providing the miner continued to be successful upgrading the confidence of the resource through the infill drilling program.

Klinck said OceanaGold was benefiting from the decision to close out its hedge contracts in March. It had bought back the contracts at $1565 an ounce. In recent weeks gold had been trading around $1740-$1850 an ounce, meaning OceanaGold was getting extra margin.

The company's recent share price performance in part reflected high gold prices and the fact that it had taken an unhedged position, he said.

Drilling results at the P2 Deeps seam were expected to expand reserves.

"The focus is to try and upgrade the resource from inferred into the indicated category or possibly into measured (reserves)," Klinck said.

Frasers underground mining had so far resulted in mineral grades of around 2.5-2.7 grams of gold per tonne mined at an average seam thickness of 6 metres.

The infill drilling within the P2 Deeps inferred resource boundary showed one 20 metre thickness with 3.73 grams of gold a tonne, and a 9 metre thickness of 3.39 grams a tonne.
An updated resource estimate would be calculated for release later in 2010.

[elZorro]

OGC closed at about CAD$2.97 or NZD$3.97, up a little with the gold price, which recovered by $18 overnight to 1193 or so.

From the Kinross? site, reposted on Stockhouse by TTSB (perennial pump/dump expert, with occasional flair)


Let's compare the stock price for some gold producers in function of their actual P/E ratio and a fixed one, for all of them

Price EPS Actual P/E ratio IF P/E = 50 the stock price s/be IF P/E = 33.5 the stock price s/be

Kinross $16.75 $0.50 33.50 $25.00 $16.75 OK? Reference
Agnico-Eagle Mines $60.67 $0.35 173.34 $17.50 $11.73 Well overpriced
Allied Nevada Gold $19.25 $0.31 62.10 $15.50 $10.39 A bit high
Alamos Gold $14.72 $0.55 26.77 $27.50 $18.43 A bit low
Eldorado Gold Corp $16.95 $0.32 52.97 $16.00 $10.72 A bit high
OceanaGold Corp $3.09 $0.34 9.09 $17.00 $11.39 VERY LOW
Red Back Mining $25.34 $0.51 49.69 $25.50 $17.09 A bit high
Semafo $7.39 $0.19 38.90 $ 9.50 $6.37 About right
Yamana Gold $10.30 $0.28 36.79 $14.00 $9.38 About right
Iamgold Corp $17.40 $0.31 56.13 $15.50 $10.39 A bit high


So what companies are undervalued/overvalued ? Or in another words which companies are pushed by some "experts" and which are "killed".
... and don't tell me is about the location of the projects. The big companies invest in the "worst locations" in the world with a reason. Do you know it?

Piedone

I tried to make this chart easier to view, no luck. You can see it in the raw form on the Stockhouse site.
The point is that if you accept a P/E of 35 or so for gold miners, then OGC looks very cheap, and Semafo is about right. But all of the other miners might be overpriced, and I haven't checked the background figures.

It's very unlikely that OGC is overpriced, and the interesting thing will be looking to see what happens after the Q2 report.

Update on the ASX, Baker Steel have continued to sell OGC, one parcel yesterday helps explain the low. They still have just under 8% of the company as a group. Would these partial sales simply be a way of meeting investor requests for a cashup? If PoG breaks out upwards, I'd expect this situation to reverse.

http://www.asx.com.au/asxpdf/20100721/pdf/31rf5ccmxxyzx6.pdf

[trackers]

On the ASX, A close below 3.06 would break the 80day SMA, a close below 3.00 would break my interpretation of the long-term trendline.

[elZorro]

On the ASX, A close below 3.06 would break the 80day SMA, a close below 3.00 would break my interpretation of the long-term trendline.

No problem with that today Trackers, news on the ASX: at 12.00 today

http://www.asx.com.au/asxpdf/20100721/pdf/31rf99l0r5bgf7.pdf

Because not enough of us trading OGC on the NZX, we didn't get the news first..

Is there nowhere that OGC drills that is not lined with gold?? What a business we're in :t_up:

It looks like an area of at least 300mtr x 300mtr, with one or two veins each up to 13mtrs thick, although most are averaging 3mtr. The grades are high. Some of this area is outside the Dec 2009inferred perimeter, which means reserves and resources will change. Note that as they went further away, at least a couple of big gold grades and thicknesses appeared (hangingwall intersections).

Even a pessimist can expect 60-70,000 oz of new gold in the close cluster of drillhole data.

[trackers]

Hah! Right you are, well thats good stuff indeed :D

[elZorro]

Hah! Right you are, well thats good stuff indeed :D

Trackers, maybe better than I thought:


Article – Businesswire

July 21 (BusinessDesk) – OceanaGold Corp. released its second strong indication this month of extensions to known resources at its Frasers Underground mine, in Otago, with “the first indication of a new possible new area of mineralisation”, …


OceanaGold testing new minerals area at Frasers Underground
July 21 (BusinessDesk) – OceanaGold Corp. released its second strong indication this month of extensions to known resources at its Frasers Underground mine, in Otago, with “the first indication of a new possible new area of mineralisation”, which it described as “very encouraging.”

Shares in the Melbourne-based gold producer jumped 3.1% to $3.97, although they had fallen from heights reached after the July 12 confirmation of significant additional gold reserves in the Panel 2 Deeps area of Frasers. The shares rose to $4.20 on that announcement, and are still showing a gain of almost 200% over the past 12 months.

The company’s underground diamond drilling programme has identified “further extensions to the gold mineralisation at depth and down dip from the current workings in Panel 2,” OceanaGold said in a statement to the NZX.

Significant intercepts had occurred within the Hangingwall Shear structure at true widths including 5 metres at 5.55 grams of gold per tonne of tailings (g/t Au) and 5 metres at 3.17 g/t Au, demonstrating “grades and lode thicknesses similar to the current Panel 2 mining area.”

Significant intercepts below the hangingwall structure included estimated true width finds of 4 metres at 4.87 g/t Au, 6 metres at 4.9 g/t Au, and 3.5 metres at 7.5 g/t Au.

“This is the first indication of a new possible area of mineralisation and these intercepts may represent one or more sub-parallel lodes similar to the Panel 2 Deeps discovery announced last year,” said vice-president Darren Klinck.Signs are that mineralisation may extend to the north, south, and south-east, with further diamond drilling occurring in those areas.
(BusinessDesk)
Content Sourced from scoop.co.nz
Original url

Perhaps there's more like several hundred thousand ounces sitting there..it's about as good as the current mining grades, and looks similar to Panel2Deeps. This report is right up to date, some of the holes are waiting for assay results. A lot of it was done in June, by the look of it.

The geologists cannot spout numbers until enough data is gathered, but I think we can get the picture. It's very good news. I was buying today, I'm expecting a solid run up to the 29th July and who knows what after that, but I have been wrong before. DYOR.

The ODT has a message too (probably written before today's press release):


Oceana Gold dipsBy Simon Hartley on Wed, 21 Jul 2010

Profit-taking and a weakening of global gold prices are likely behind the 10% decline in Oceana Gold Corp shares.

Until now, the shares have enjoyed a stellar run.

During the past year, shares in East Otago Oceana rose from $1.03 to a high of $4.85 on June 21, coinciding with the spot gold high of $US1265 ($NZ1781) on the same day.

Oceana's shares eased 10% to $3.84 yesterday, while spot gold was down 6.7% to $US1180 yesterday from the June 21 high.

Craigs Investment Partners broker Peter McIntyre said Oceana had "been an outstanding performer" during the past year, with only good news hitting the markets, in its efforts to extend the lifetime of its Macraes open-cast and underground mining by boosting exploration.

However, Mr McIntyre believed the high share price prompted some shareholders to take the opportunity to take profits, in combination with falling sentiment over the weakening global spot price.

Oceana has four times this year increased its estimates of gold resources, or released information on positive exploration results, bought back its gold hedge contracts for more than $100 million, and upped exploration spending at Reefton on the West Coast to $6.2 million to consider an underground mine proposal.

Oceana's half-year financial report is due out at the end of next week.

[mistymountain]

Short term profit taking, weakness in POG BUT the big picture is increasingly far more positive...

Just wait for Didipio to fire up...!

Cheers

[elZorro]

Short term profit taking, weakness in POG BUT the big picture is increasingly far more positive...

Just wait for Didipio to fire up...!

Cheers

I'm in no hurry to see OGC starting up Didipio, MM. They will need to take their time, do it properly, and there is no need to take risks when things are going so well in NZ.

OGC might be looking at the idea of building another autoclave, this time at Reefton, for example. That would remove a bottleneck on gold production, and the risk to Oceanagold if the current sole plant did fall over, like it did for a short while early this year. But as I mentioned before, maybe there is a shortage of power over on the West Coast.

The Bluff aluminium smelter uses about 20% of NZ's power. Just one global scale business. There is no room for any other players here on that scale, and hasn't been for decades.

OceanaGold are simply following the smart trends of the bigger miners.

Leading gold miners see ore boost near mines



Thu May 20, 2010 11:32am EDT

* Gold miners say 'brownfields' key to finding more ore
* Analyst sees choppy gold prices in economic uncertainty
* Gold companies eyeing polymetalic deposits - Newmont

By Eduardo Garcia

LIMA, May 20 (Reuters) - Leading gold miners say they see "brownfield" exploration as a low-risk, cost-effective way to boost output in the medium term, as global economic uncertainty could make prices for the yellow metal wobble.

And, if prices stay where they are now, near all-time highs, adding onto existing mines would be the quickest way to lift production and profits.

Executives from Barrick (ABX.TO), Gold Fields (GFI.N) and Newmont (NEM.N) told a biannual gold mining summit in Lima this week that exploration near existing mines -- areas known as brownfields -- is key in their plans to increase ore body.

"The best and the lowest risk expansion opportunities are brownfields ... That's why we're spending a third of our exploration budget on brownfields opportunities," Gold Fields Chief Executive Nicholas Holland told Reuters in an interview.

Other major gold miners told the meeting in Lima that near-mine exploration is also a centerpiece of their expansion programs in the medium term because developing a new mine from scratch typically takes more than eight years.

"An ounce found within 5 or 10 km (3 to 6 miles) from an existing mine is worth a lot more than an ounce that is remote," said Barrick Executive Vice President Peter Kinver.

About half of Barrick's exploration budget this year is slotted for near-mine areas, Kinver said.

ECONOMIC UNCERTAINTY

Holding up on riskier projects in "greenfield" areas, where there is no mining activity, seems reasonable as many investors do not yet see clear signs that the global economy is rebounding from the downturn of the past two years.

"Often you have to establish basic infrastructure before you even get the mine going. You have to be sure of the economics before you press the button on those decisions," Holland said.

And, traditionally, gold prices have moved in sync with oil prices, which would likely mean higher production costs for gold miners if prices for the yellow metal rise.

"It is going to be pretty choppy. Prices never go up indefinitely, I think there is some upside risk to gold prices," said Bart Melek, an analyst with the BMO financial group.

"Our official forecast is $1,200 an ounce for 2011 ... We're concerned about potential monetization, high debt levels in Europe and North America," he added.

Fears of contagion from Greece's debt crisis have driven gold to a record as investors ditched the euro and bought the metal as a safe haven from volatile currencies and stocks.

But gold prices dropped more than 2 percent on Wednesday, despite a tumbling euro, stirring concerns the precious metal may be ripe for a correction. [ID:nLDE64I0SL]

COST SAVING, SYNERGIES

Another reason why gold miners are focusing on boosting production at existing mines, or exploring near them, is because developing mines in the same area is cost effective.

"We've been quite lucky to find stuff near mines (in Peru), because the infrastructure is already there," said Kinver.

Buenaventura (BUEv.LM) (BVN.N), Peru's largest precious metals miner, and Newmont, its partner, are considering a tie-up with Chinese companies to jointly develop two major gold deposits in Peru that are near each other. [ID:nN06137920]

Exploring for gold near the areas where other companies have found world-class deposits is also seen as a safer bet.

Newmont Executive Vice President Guy Lansdown said that, as of recently, gold miners are developing polymetalic deposits because pure-gold deposits are hard to come by.

"Discoveries have reduced significantly over the last five years ... It's just a mature industry. It's hard to replace them (existing deposits). We're finding that we have to go into very difficult environments," Lansdown said.

Also, gold miners cut their exploration budgets when gold prices were low, which means that there are not many new projects scheduled to come on stream in the short term.

"We're seeing some of the lead-lag effects of the deferred and reduced exploration span in the past and, unfortunately, it is going to take some time for us to catch up," said Holland.

"I think exploration will pick up again, but it is going to take some years for us to see the impact of that, and gold companies are going to have to start looking into new frontiers to find new gold deposits," he said. (Additional reporting by Teresa Cespedes and Patricia Velez; Editing by Walter Bagley)

OGC held its price on the TSX last night, after some initial higher prices on the Frasers news. Some are still selling. Gold recovered to nearly 1197 before dropping back to about 1185.

Have you guys noticed the increasingly large international trades coming in overnight? Someone is accumulating. Good for the NZX volume too.

I'm still very curious about Baker Steel's reduced holding. Anyone the wiser?

http://www.businessspectator.com.au/bs.nsf/Article/Baker-Steel-Capital-Managers-sells-604k-OceanaGold-7K7EE?opendocument&src=rss

Found on the web:


July 21, 2010
Oceana Gold (OGC.TO) Drill Results...
Ok, I'm a little rusty on my Jr and Mid-Tier gold producers comparables, but...
Here's my read (tell me where I'm wrong) on today's Oceana Gold drill results (click here):

o Grade and thickness is similar to what they are already mining.
o This continues the progress in increasing mine-life (which had been OGC.TO's biggest weakness).
o No progress on their other weakness: Lack of a clear growth path.

Still, very undervalued for a mid-tier, unhedged, in-production oz/year and cash-flow, especially when considering its very safe political situation.

I'm quite comfortable with my oversized position in this company.

Again, tell me where I have this wrong?

MontyHigh, www.worldofwallstreet.us

Trace the link back and have a read, interesting data there.

[elZorro]

A backwards look at OGC and the gold market late 2009. I can't remember reading this before.

http://www.odt.co.nz/news/business/87689/oceana-gleaming-after-bad-start-2009

(More reasons to be careful with Didipio). These commentators turned out to be accurate.

[elZorro]

OGC ended up at CAD$3.05, so NZ$4.05 target start today, up 4%. Gold sits at about 1195. Everything seems to be going to plan.

If you look at the volume and price charts for Oceanagold (TSX) over the last 10 days, you can see the effect of the Baker Steel repositioning. Especially on Tuesday, 20th. The market has climbed back on lower volume since then, with the odd big purchase.

[GR8DAY]

elZ........why do you think POG climbed overnight in tandem with Dow?..........don't they usually head in different directions??

[elZorro]

elZ........why do you think POG climbed overnight in tandem with Dow?..........don't they usually head in different directions??

First I have to say that I'm no expert. PoG has been up and down $10 over the last 2 weeks, often these jumps are very fast, so I guess there's some shorting and playing around with the market going on, as many say. When the market gets really jumpy the first reaction is to buy (or move back into) USD, then that may flow onto higher gold prices, a bit later (inflation hedge, from USD to gold). If the market gets more positive, the PoG often trends up there also, or perhaps it's just not such a good bet to short gold over the duration.

So a warming market like today usually helps OGC in both ways: normal equities are rising, and gold stays the same price or may trend up, if that was its general inclination.

There must be some experts out there who could offer some more insightful comments though..please do.

[GR8DAY]

...cheers Elz, jst one of those anomolies that happens occasionally i guess?........don't actually think there is such an animal as an "expert" is there?

[elZorro]

...cheers Elz, jst one of those anomolies that happens occasionally i guess?........don't actually think there is such an animal as an "expert" is there?

This might help..

http://www.businessspectator.com.au/bs.nsf/Article/THE-DAILY-CHART-Gold-goes-rogue-pd20100723-7M3J4?opendocument&amp;src=rss

This one is better.

http://www.thestreet.com/story/10814063/2/gold-prices-drift-lower.html (http://www.thestreet.com/story/10814063/1/gold-prices-drift-lower.html)

[elZorro]

Well, OGC has just posted 3 straight days of steady climbing on the TSX. Volume there is improving too.
As usual, the NZ market for OGC is fairly slow, and I'd expect that next week you won't see many OGC shares for sale here.
The "INT" (international sales) are still coming in at sharp prices, to start the day.

On Friday quite a few big 'XT' sales (NZ?) were being made on the ASX, and people were paying a good price too. Begrudgingly almost, the Aussie market ended up with the same closing price that the TSX had reached the day before.

Just after the ASX closes this Thursday, the Q2 report will be released to the media. The TSX will have two days to trade with the info next week, we'll only get one. But no doubt it will be a very satisfying result for the management of OceanaGold and shareholders :)

[corporateraider]

Gidday elZorro
Like you I think that the numbers on Thursday will be very good.
However I think that what the company needs is to rapidly grow their NZ reserves. Yes the recent Reefton announcement was good, but it represents only a further 18 months mining. I appreciate that they have a big drilling programme.
My thinking is that until they increase the reserves there is little point in mining the gold more quickly. Therefore I am still looking to Didpio for growth and from the company' comments I think that they are too.
Can't see a dividend with the capital requirements for Didipio.

Disc: still hold

[elZorro]

Gidday elZorro
Like you I think that the numbers on Thursday will be very good.
However I think that what the company needs is to rapidly grow their NZ reserves. Yes the recent Reefton announcement was good, but it represents only a further 18 months mining. I appreciate that they have a big drilling programme.
My thinking is that until they increase the reserves there is little point in mining the gold more quickly. Therefore I am still looking to Didpio for growth and from the company' comments I think that they are too.
Can't see a dividend with the capital requirements for Didipio.

Disc: still hold

Well, maybe they'll use a JV partner for the copper at Didipio and that will reduce the risk and costs, looks like they are trying to get some interest internationally.

It doesn't happen often, but I found an article on OceanaGold in our Waikato Times today, a bastion of top reporting (not anymore?). It's a Fairfax paper. So it was also in the Dominion Post. Try getting a Dominion Post in Wellington in the morning, and returning to see the same paper wrapped up as the Waikato Times in the evening, and you'll get what I mean. Anyway the article isn't too bad, and has some new data.


Golden run keeps trucking
The Dominion Post Last updated 05:00 24/07/2010

To borrow a line from Charles Dickens, it is the best of times and the worst of times to be a gold-mining company.

World prices for the precious metal are sky high ... but here in New Zealand mining has become something of a dirty word. Opposition has been so great the Government has now backed down on a scheme even to assess whether schedule 4 conservation land should be opened to mining.

"I think when you ask a question about mining, a lot of people don't understand what modern mining is about," said Mark Cadzow, chief operating manager of OceanaGold – New Zealand's largest gold producing operation.

"We've struck what I believe is a good balance between extracting the resource and continuing to be a sustainable and environmentally responsible company.

"At the end of the day things are either mined or they are grown. People have to understand to have the particular lifestyle we have, you have got to have mining. So therefore, mining in an environmentally sensitive way is what people are looking for."

Open pit mines such as Oceana's main operation at Macraes were always going to be the best way to extract gold close to the surface, Mr Cadzow said. As the gold became deeper underground mining – such as the nearby Frasers – was preferable.

Either way, large piles of rubble and big holes got left behind, and what happened at that stage made all the difference. Oceana took a lot of time and trouble to rehabilitate mined land, Mr Cadzow said.

"The perception people have of mining is huge waste dumps and large holes in the ground. Where it's opportune, we will backfill those holes and all of our waste rock is rehabilitated to a standard that is probably better than the grassland that was there before ... we get contractors in to do the remedial stuff and we have an environmental team out there. We also have a team here in the office which deals with consenting issues and things like that."

The company's efforts to be a good neighbour to the nearby Otago towns include lending a hand to rehabilitate local wetlands, establishing a heritage park to tell the story of mining in the district – which dates back to the 1870s – and a park with major outdoor artworks on display.

"We have a community there which has relied on mining for a certain period, so there's a nice little hotel and school and all those sorts of things," Mr Cadzow said.

"To try and maintain that, one of the ways we wanted to have a life after mining was to have some sort of a tourist attraction.

"People will pay to see where a large mine was, and if you have the added attraction of a heritage and art park, then that's blending the centuries-old mining with the modern remnants of mining and some art features as well.

"It becomes a destination. The rail trail isn't far away and if we could develop a tourism link with the rail trail that could be quite attractive."

Oceana knows the gold will run out one day, so it not only has to consider what it leaves behind in Otago, but where it mines in the future. The Philippines copper project was one such example of diversification, but Mr Cadzow believed there was still considerable life left in Oceana's current New Zealand mines.

Just last week, Oceana announced its test drilling programme at Frasers showed a likely extension of 18 months for the life of the mine work done as part of its $12 million exploration budget. Further drilling is expected to increase Oceana's reserves still further.

"It's a very large system at Macraes," Mr Cadzow said. "The line of strike is 25km long, at least, and we have tenements over that. Currently, we have concentrated most of our mining within a 10km zone around our current processing plant.

"Our life of mine plan is still expanding ... and we're still exploring. You will come to a point where you run out of ore, all mines close eventually but Broken Hill (in Australia) has been going for more than 100 years now, and this is a world-class ore body.

"We've produced almost 3 million ounces of gold from Macraes and it's got around about a 4.5 million ounce resource at the moment, so there is significant gold still to be won.

"We're doing a lot of exploration at Reefton as well."

OceanaGold is proud of its Otago heritage, but is an international business and is listed on the Toronto, New Zealand and Australian stockmarkets.

The firm's New Zealand staff are spread across mines in Reefton (200), and Macraes (450) and its Dunedin office.

The extracted ore is processed in Perth, and its corporate head office is in Melbourne. OceanaGold also owns the Didipio gold copper project in the Philippines. "Most of our strategic work is now done in-house. Where expertise is needed such as Gough Gough and Hamer, who are Caterpillar experts, then that's contracted out," Mr Cadzow said.

"We have a very small head office in Melbourne: there's only 12 or 13 people there. We've got the Philippines project, and then there is the 500-odd employees here in New Zealand and 200-odd contractors.

"In the Dunedin office it is mostly technical services and the financial team. There are probably around 25 people here.

"It's good for the local economy ... We're looking to build a long-life mine. We've been operating out of Macraes for 20 years now and we want to build on that.

"We're looking at a life of the mine at Macraes of at least 80 years, and that's seen very positively in the marketplace. With the build in our share price, then you can look at doing other things."



So another 60 years of mining at Macraes is proposed, that'll help to amortise plant costs. And this article doesn't even attempt to cover what might happen at Reefton, where there is a whole lot of brownfields exploration effort going in.

Technical link for Reefton, dated 2007. How the mine is set up, GRD history etc.

http://www.contrafedpublishing.co.nz/QM/Reviving+Reefton.html

[elZorro]

Gold shares rebound on results
By Simon Hartley on Sat, 24 Jul 2010

Shares in triple-listed Oceana Gold have rebounded to more than $4 on the back of its fifth announcement this year of "encouraging results" from expanded exploration at its 20-year-old Macraes site in east Otago.

Oceana is on a drive to extend its mine-life prospects at both its Macraes and West Coast Reefton sites as it benefits from a year of stellar share price gains.

This coincides with a successful capital raising of more than $100 million which rids the company of its forward contract hedge book; allowing it to make the most of a surge in global gold spot prices.

Shares in Oceana, which hit an all-time high of $4.65 last month, had slipped below $4 but were again trading slightly above $4 yesterday after the positive test drilling results.

Oceana has forecast its mine life at present is "at least six years" - to 2016.

Oceana has recently been underground test drilling outside the boundary line of its existing Frasers underground mine at Macraes, which is forecast to deliver up to 70,000 ounces of gold this calendar year, and the latest assay results from 20 diamond drill test holes were "very encouraging", according to chief executive Paul Bibby in a statement.

"As we continue to expand the infill drilling programme outwards we expect this to further improve the confidence of the resource and lead to increased mine life," Mr Bibby said.

Among the 20 assays were 5m of drill samples at 5.55 grams of gold per tonne (g/t) 5m at 3.17 g/t, 11m at 2.72 g/t, 6m at 2.71 g/t and 5.5m at 2.96 g/t.

The latest results were the first indication of a "new, possible area of mineralisation" which may represent one or more lodes similar to the Panel 2 Deeps announced last year.

"Consequently we will continue with this underground [test drilling] programme to test for further extensions," Mr Bibby said.

Frasers underground, which cost $NZ74.3 million and was commissioned in January 2008, was estimated at last December to have a further three-year lifespan, but this was dependent on further drill testing results.

Last calendar year Oceana delivered a record 300,391 ounces of gold and expects a slight downturn this year to between 270,000-300,000oz as it works through lower grade ore. Frasers underground is expected to contribute 55,000-65,000oz per year.

We've been told that the autoclave runs 24 hours a day, except for relining operations (on a shedule usually). So the quickest and cheapest way of increasing the annual recovered ounces might be to get to the point of mining higher grade ore. The new Frasers finds might be a big help.

Stockhouse has helpfully posted a video clip link, Sprott Assett Management continues to be positive about OGC, interesting to see their perspective. Just a short sound bite, but the other info before it would be of interest to PRC holders etc.

http://www.ob-research.com/Peter_Imhof_On_BNN_About_OceanaGold

[corporateraider]

Good work elZorro. I had never seen any suggestion that there may be another 60 years at Macraes. That is very encouraging.

I still think that the company with its current cashflow will be able to do Didipio alone, maybe not this year, and that should ensure the best return for shareholders. If they could have got a good deal on a JV then I think it would have been done by now. We saw with CFE flogging Lady Annie how hard it was to get a good price- although that wasn't a great asset given the small reserves.

[elZorro]

Good work elZorro. I had never seen any suggestion that there may be another 60 years at Macraes. That is very encouraging.

I still think that the company with its current cashflow will be able to do Didipio alone, maybe not this year, and that should ensure the best return for shareholders. If they could have got a good deal on a JV then I think it would have been done by now. We saw with CFE flogging Lady Annie how hard it was to get a good price- although that wasn't a great asset given the small reserves.

Thanks CR, I see Reefton is a massive tenement too, and twice the average grade of the main Macraes pit.

I haven't spent much time on the OceanaGold website, it always looks a bit hard to navigate, and is a bit short on recent detail. For example I just had a look for the power account for a year, it's inside general costs of goods sold with wages/salaries I think (total annually US$121mill). That might be quite normal reporting practice.

Small Studio developed OGC's CMS site, looks like it's the biggest job they've done. Is it time to look at a makeover? They can now afford to spend a bit more effort on shareholder information presentation. Don't get me wrong, it's already quite good, but it could be better.

http://www.smallstudio.com.au/2008/02/oceanagold-website.html

[trackers]

Chart looking better, Does this fit the bill of a symmetrical triangle? Breaks out 54% of the time according to Bulkowski... Slope is -0.025 over 0.011

http://iforce.co.nz/i/lukmkdta.bmp

Had a nibble at these last week at 3.18 on the ASX

sp has crossed the 12 day EMA, and is close to breaking 40day EMA

[Hoop]

Chart looking better, Does this fit the bill of a symmetrical triangle? Breaks out 54% of the time according to Bulkowski... Slope is -0.025 over 0.011

http://iforce.co.nz/i/lukmkdta.bmp

Had a nibble at these last week at 3.18

sp has crossed the 12 day EMA, and is close to breaking 40day EMA


Trackers ..It seems you have Bulkowski's book ...Look up Gaps Edit: go to Bulkowski's free pattern website (http://thepatternsite.com/)
..I wouldn't use or rely on typical triangle formation strategy with OGC (probably work though)..I would use Gap formation strategy incorporating resistance and support lines + helpful TA indicators and use stop loss strategy.

I often don't jump into these stocks as I haven't the self- discipline nor the ability of quickness to enter and exit these types of fast moving stocks..I've learn't from getting my fingers burn't to invest using my strengths not my weaknesses.

However if you want to see spooky TA...Gap analysis will present you with some.

reference below is ignoring dividend gaps
....Gaps make excellent support and resistance line levels
....Gaps normally get filled at some later stage (2 edge sword) usually at similar support/resistance levels.

Below I have made a chart OGC.ax as an poor example of using S/R lines and Gap strategy ..I didn't have time to find a Matterhorn type formation with upside peak and downside to properly demonstrate the effectiveness of Gap formation strategy in the resulting downtrend
..
..


Trackers and others... fire up a chart program ..find a quick up / down trend stock using a time frame to cover the entire period, use the candle sticks or OHLC feature to show the gap days and start drawing S/R lines.. you can just about see when the next gap (up or down) is going to occur as well as correctional bottoms (and tops).....spooky huh :eek2:.......enjoy.:):):)
.
.
http://i458.photobucket.com/albums/qq306/Hoop_1/ogc_ax23072010.png

[trackers]

Heya Hoop,

Yeah I've been trying to get a handle on Bulkowski's chart patterns off his website lately :) Didn't know he was responsible for gap analysis too, what a machine...!

The only experience I have with gaps is some guy on HC who kept predicting fairly large pullbacks on NGE after it had gapped up - He got it right an annoyingly large amount of the time!! :D

One thing I've found with TA so far is that it is amazing at getting you out of bad stocks quickly, but I haven't had much luck at doing the opposite - Getting me into good trending stocks early (or predicting future events rather than just acting on whatever happens). Maybe Bulkowski can help with this.... Though his ideas aren't in Metastock so hopefully I can create them myself and start backtesting...

Thanks for your help I really appreciate it

[elZorro]

Thanks for the graphs Hoop and Trackers. I'm going to have to stick with my day job, it's easier.

Can anyone advise who the party was that was selling today on the ASX? There were no shortage of takers at a small discount, which was good to see. When there were a few tens of thousand orders on the BUY side, they were all snapped up in 60K parcels. Well over 1mill shares traded, the highest for nearly two months. I don't think you can fight the market (now who warned me about that one?).

[Vtrader]

Trackers ..It seems you have Bulkowski's book ...Look up Gaps Edit: go to Bulkowski's free pattern website (http://thepatternsite.com/)
..I wouldn't use or rely on typical triangle formation strategy with OGC (probably work though)..I would use Gap formation strategy incorporating resistance and support lines + helpful TA indicators and use stop loss strategy.

So I looked and think the eedb pattern could be close to OCG currently. http://thepatternsite.com/eedb.html
Seems that no matter the similarities drawn, the belief remains trending upward.
We will be more informed late morning on FRIDAY, "The Company will host a conference call / webcast at 7.30am on Friday 30 July (Melbourne) / 5.30pm on Thursday 29 July (Toronto) times. "
V.

[elZorro]

VTrader, good luck with the charts..but this share seems to be dominated by the odd large transaction at the moment. There is some evidence of other 60K OGC parcels being bought and sold at the start and end of trading on the TSX, alternate days. Maybe just a bigger fish trading in the shares for short term gains. Looks like they're doing OK, but it makes the SP look a little untidy.

Still a lot of international interest in the shares, see this morning's parcel?

I'm lost for words - OGC still being sold, yet ASX and gold holding up OK, do the big funds need the money or something?

[Vtrader]

Z,
Is this recent OGC activity something foreboding?
I consider that due to the recent enthusiasm of international markets, many are unloading gold and 'safe positions' into whatever they normally invest in. So too will be those who 'hedged' in gold producers.
It may be that they could have sold better next week.

Lost for words? Based on your recent performance, you will find some words... and they will be glowing.
V.

[elZorro]

Z,
Is this recent OGC activity something foreboding?
I consider that due to the recent enthusiasm of international markets, many are unloading gold and 'safe positions' into whatever they normally invest in. So too will be those who 'hedged' in gold producers.
It may be that they could have sold better next week.

Lost for words? Based on your recent performance, you will find some words... and they will be glowing.
V.

Like the rest of the market Vtrader, I'm in two minds today. OGC has been a shining beacon of profit for so long, I am half expecting it to carry on that way. But we are small traders, bobbing along in the market. So I have done a bit of research into Baker Steel.

They have plenty of goldminers that they invest in, and several funds. So they must be moving money about between the shares from time to time.

http://www.digitallook.com/companyresearch/103740/Ruffer_CF_Baker_Steel_Gold_O_Acc_NAV/company_research.html

http://www.selectfunds.com.au/download/other/Baker_Steel_Gold_Fund_-_Sept_09.pdf

This latest one shows that the principals are fairly young looking, been in business for themselves less than 10 years. And also that this fund was still heavily into OGC as at late June.

http://www.offshore-rebates.com/pdf/ruffer/BSGF.pdf

But there is also advice on the net about largish sales of OGC by Baker Steel for the last two months.

http://businessspectator.mobi/bs.nsf/Article/Baker-Steel-sells-24m-OceanaGold-shares-6VCUF?OpenDocument#Scene_1

http://www.businessspectator.com.au/bs.nsf/Article/Baker-Steel-Capital-Managers-sells-604k-OceanaGold-7K7EE?opendocument&src=rss

There are also some prepared to try shorting OGC, and at the end of March 2010, nearly 5 million shares were in that category, although it wasn't tried much again on the TSX for a month or two.

http://tmx.quotemedia.com/article.php?newsid=32163639&qm_symbol=OGC:CA

I don't know much about shorting anyway, but maybe early in August we'll see if that was a factor in this pattern we're seeing. Open to suggestions here.

Gold dropping a bit, that doesn't help, but it won't change the Q2 report for cash$$$ earnt up until 30 June. And gold could go the other way anytime.

So OGC might be a bargain today, and the big players have found something even better (and are having fun shorting the share), or it is a time for caution.

Any thoughts?

[trackers]

On the ASX, the volume for the last two days has been equivalent to that of about 8 days before it, so someone's offloading/offloaded a decent sized parcel, the question is why?

[elZorro]

On the ASX, the volume for the last two days has been equivalent to that of about 8 days before it, so someone's offloading/offloaded a decent sized parcel, the question is why?

Could be lots of smaller traders all added up, stop loss signals etc.

Have you seen the absolutely massive no. of OGC "IN" shares sold already on the NZX this morning?

Since Baker Steel has already sold a lot and have cash waiting perhaps, are they buying back in? If they are not, who is? As the market has steadily woken up to the phenomenal return with OGC, and its further potential, there would have been less chances for the bigger players to get good buying deals. Have they simply engineered all this sell-down? Wouldn't be hard to do would it?

And now the buyback is being spread around, even into our little market, where it is a bit too obvious.

[Vtrader]

For every sell there is a buy.
Now should I buy more, or sell some?
V.

[elZorro]

For every sell there is a buy.
Now should I buy more, or sell some?
V.

I'm buying, Vtrader.

[GR8DAY]

......be careful guys, don't forget they were only $1.60 not so long ago!

[elZorro]

Yes, I'd be interested too. But I don't think TA is going to help us understand the situation today. It will tell us to be very careful.

More likely you'll see massive volume in Aussie today, there are only 2 days to go before the Q2 report. Volume before price: if you look back on the 2yr chart (NZX) you'll see OGC price moving up after large volumes seen.

[trackers]

Yes, I'd be interested too. But I don't think TA is going to help us understand the situation today. It will tell us to be very careful.

More likely you'll see massive volume in Aussie today, there are only 2 days to go before the Q2 report. Volume before price: if you look back on the 2yr chart (NZX) you'll see OGC price moving up after large volumes seen.

Quarterly released after close of ASX tomorrow night, will certainly be interesting. I'm most likely going to take my loss today

[Hoop]

Quote from my earlier post...
However if you want to see spooky TA...Gap analysis will present you with some.

reference below is ignoring dividend gaps
....Gaps make excellent support and resistance line levels
....Gaps normally get filled at some later stage (2 edge sword) usually at similar support/resistance levels.
They say that exhaustion gaps get filled but breakouts and continuation gaps don't get filled....Well this is true if the prices never revisit those gap levels again...but when they do they can get filled when the opposing trend line hits their similar price levels at some future time...examples of that are happening now


Yes, I'd be interested too. But I don't think TA is going to help us understand the situation today. It will tell us to be very careful. .....

Wrong!
The careful.. watched the shareprice fall 20% then got out
TA said if 3.80 Gap+R&S broke the price would be expected to fall (could be a gap down) to the next R&S at 3.50 - 3.55 ish level ..will this support hold today? ...tomorrow?...spooky huh the 2 edge sword swinging...gap up gap down


......be careful guys, don't forget they were only $1.60 not so long ago!

Words of wisdom..methinks


Interesting thing is that the $3.80 Gap+support line was also the trailing stop on P's TA chart....showing the point of exit...it seems the high volume the last 3 days is the disciplined getting out.

Hands up those who listened to P :t_up:


I'm buying, Vtrader.

I would interested in your reasons why?
EL Z you should expect a slap from P.. so this would be a good time to put your armour on. ;)

[elZorro]

Hi Hoop, I am still comparing OGC with other miners, most of whom are not in sharp decline. Most of these miners don't have a wizz-bang report due out, that should show a remarkable turnaround in profits. And I have seen some sales being made at the top of its recent price, by large holders of the share.

Who is now buying in, that is the question. They have deep pockets, that's for sure. Please check back in two days time.

Note the huge purchase on the NZX this morning was at $3.76, just below the 20% stop loss. Did they get it wrong too?

[Hoop]

Hi Hoop, I am still comparing OGC with other miners, most of whom are not in sharp decline. Most of these miners don't have a wizz-bang report due out, that should show a remarkable turnaround in profits. And I have seen some sales being made at the top of its recent price, by large holders of the share.

Who is now buying in, that is the question. They have deep pockets, that's for sure. Please check back in two days time.

Yep .OK see you in 2 days.

[geezy]

the sp is closely related to the falling POG imo and i guess traders are expecting to lower further.

[BigBob]

the sp is closely related to the falling POG imo and i guess traders are expecting to lower further.

You've got it geezy.... POG has just broken down through the support level at 1170/1180... indicates test of primary support around 1060 is on the cards....

[waterboy]

thought you guys might this interesting ogc vs gold price

Disc: holding ogc

[elZorro]

thought you guys might find this interesting - ogc vs gold price

Disc: holding ogc

That's quite interesting Waterboy, too realistic to be a coincidence. It means that OGC reacts by 26% scaling to gold changes of $100US. Based on a GP valuation on gold sales at their recovery cost, it should be more like 16%, or less. It overeacts when gold goes up, and it pulls back sharply when it goes down. Once it was unhedged, OGC followed gold much more closely.

The chart lines up well because OGC has not been able to ramp up recovery ounces in the last year or two. That could change in future.

Anyway, it all helps. Cheers.

This article is along the line of my suspicions about the sharply dropping OGC price. Watch out for a sharp improvement if either of us are right.

http://www.kitco.com/ind/Conner/jul272010.html

If a fund were able to sell near a high, then buy back later once the share had dropped 25% say, they could report to their investors a 33% extra return, that return being made on the way back to its high point in theory, all other things being equal. In our case, the lowered PoG has helped in reinforcing any short.

[Vtrader]

Could be lots of smaller traders all added up, stop loss signals etc.

Have you seen the absolutely massive no. of OGC "IN" shares sold already on the NZX this morning?

Since Baker Steel has already sold a lot and have cash waiting perhaps, are they buying back in? If they are not, who is? As the market has steadily woken up to the phenomenal return with OGC, and its further potential, there would have been less chances for the bigger players to get good buying deals. Have they simply engineered all this sell-down? Wouldn't be hard to do would it?

And now the buyback is being spread around, even into our little market, where it is a bit too obvious.

And another transaction pre-open today, similar size to yesterday.
elZ, I think you may have got the observation right...
V.

[elZorro]

Hi Vtrader, this time buyer "IN" is twice as happy with the price, nearly half a million shares purchased.

The lesson here is that next time we see Baker Steel and other funds selling OGC in a big way, without any market info telling us there is an issue, we might need to look at copying them, bacause their effect on the share is large. With the cash, we can rejoin the share the same time they do. Of course, they didn't wait for a 20% loss to do most of their selling, because they started it. Looks like a 22-26% drop is the target they were looking for, now they're buying again.

[Jay]

And another transaction pre-open today, similar size to yesterday.
elZ, I think you may have got the observation right...
V.

I don't think I understand how this works - large parcels of shares crossing off market - I too would assume 1 big player buying, but where do the shares come from - another large holder selling or is it whats holders have already advised their brokers and loaded in to the system (either online or manually) to sell.

[GR8DAY]

.......brokers shift larger parcels around between themselves "off'market" for theiir individual clients........sometimes moving their own (broking house) stock.....a lot of "in-house" negotiations are done that we (joe blows) are not party to........well that's my understanding anyway? Im now an OGC shareholder.

[elZorro]

On the Direct Broking site, these purchases that came in overnight are labelled IN, I think that means international sales. They are ON/OFF market? Direct Broking were not easily able to tell me who the orders were from, or that info is not provided. Maybe someone else can advise us here?

I think the point is that $3.50-$3.76 NZ$ is a good price for the shares in the last two days, if their massive orders are anything to go by. Notice the fund(s) could not purchase NZ shares during normal trading hours as the qty on offer here is way too small.

Not sure if the Aussies have caught up with this, lots on ASK at a low price at the moment.

These are the Direct Broking codes.


Condition codes

Condition codes apply to the Course of Trade display available on the depth veiw and denote any unusual trades. Note that some conditions may not apply to all Exchanges.

The following details the various conditions for NZX trades:

IN International
LT Late Reported
OS Overseas
OL Market Trade (too small for price setting)
PF Portfolio Marriage
SP Off Market
SS Short Sell
XX Extra-ordinary


The following details the various conditions for ASX trades:

Transaction Types

AM ASX match facility trade
BK Buy back
BP Bookin purpose only
BV Book value switch
BW Buy write
BZ Board broker sale
CT Combination trade
CO Standard combination trade
DR Direct reporting
EC Exercise of Call
EP Exercise of Put
LN Loan
LR Loan return
PR Prompt re-booking
PS Prompt Sale
PT Put through
IA Interstate Accounting


Time or Location

LT Late
ON Overnight
OS Overseas


Delivery

EF Delivery of a future
FD Forward delivery
OF Overseas delivery
OR Overseas resident
BL Blocked from transaction netting


Market Information Only

MI Market Information


Crossing/Special

XT Crossed trades
IB Index replicating special crossing
SP Special sale
CS Contingent special
SX Special sale portfolio
SO Other special sale
SA Special crossing sale

[elZorro]

.......brokers shift larger parcels around between themselves "off'market" for theiir individual clients........sometimes moving their own (broking house) stock.....a lot of "in-house" negotiations are done that we (joe blows) are not party to........well that's my understanding anyway? Im now an OGC shareholder.

GR8DAY, welcome aboard..that puts you well up the tree in terms of patience and smarts.

[GR8DAY]

......cheers ElZ, yes took a bit of patience and plan on buying more shud the opportuniy arise..........do you think they will perform better than my HGD's?? LOL! Thanks for all your research m8.....I dont have the time or skills so please keep it coming.

[elZorro]

......cheers ElZ, yes took a bit of patience and plan on buying more shud the opportuniy arise..........do you think they will perform better than my HGD's?? LOL! Thanks for all your research m8.....I dont have the time or skills so please keep it coming.

If I had any skills, I'd be like you, all smiles today, and with more previous profit to boot. It's been 1.5 hours and the Aussies are starting to figure out that the "crisis" is probably over. The big fund(s) spent a lot of dough over here this morning, perhaps to keep it below the radar. Notice all the trades are well below 50K volume now, so smaller traders are doing all that you see perhaps. It must be amusing for the big traders.

[Jay]

Thanks elZ
Been in and out a few times, presently a holder

[Silverlight]

On the Direct Broking site, these purchases that came in overnight are labelled IN, I think that means international sales. They are ON/OFF market? Direct Broking were not easily able to tell me who the orders were from, or that info is not provided. Maybe someone else can advise us here?


The way "Internationals" work on the NZX is a reporting, not trade, of a trade that has occured already on another market (usually ASX, but sometimes LSE (ie GPG) or NYSE (ie TEL)).

The price that is reported is the price that was executed on the other market times the currency rate, not at the time of the trade, but the currency the local broker bought or sold NZ dollars to cover the trade. Most NZ brokers will do this at the end of the day in one lump sum, hence why the reports come through pre market the next day, as they don't know the NZ price until after the market as closed for the day.

The majority of international trades are re-reports and not real trades, so should not be used as an indication of market buying/ selling or liquidity.

[geezy]

today increase should be due to increased in POG and the NZ dollar falling?

[elZorro]

The way "Internationals" work on the NZX is a reporting, not trade, of a trade that has occured already on another market (usually ASX, but sometimes LSE (ie GPG) or NYSE (ie TEL)).

The price that is reported is the price that was executed on the other market times the currency rate, not at the time of the trade, but the currency the local broker bought or sold NZ dollars to cover the trade. Most NZ brokers will do this at the end of the day in one lump sum, hence why the reports come through pre market the next day, as they don't know the NZ price until after the market as closed for the day.

The majority of international trades are re-reports and not real trades, so should not be used as an indication of market buying/ selling or liquidity.

OH..that changes everything back to an unknown quantity. Thank you for sorting that out for me Silverlight.

I must apologize to anyone who takes any of my ramblings as gospel. I have been way off beam a few times. Of course the Q2 report is out, and while the Stockhouse people haven't reported their findings yet, I did spend 30mins wading through it.

The Macraes pit got waterlogged for a few extra days (about 4) which slowed production. On top of that, the average grade was lower than a year ago. Everything else looks as expected. Much better cashflow from the gold sales the last quarter, highest EBITDA for 8 quarters. If the gold grade had been at levels of a year ago, it would have been maybe twice as good profit wise. So that'll be why some extra cashflow has been diverted to brownfields exploration. They are still on track for 270-290,000oz annual production, meaning the next half will need to be a little better. There was also mention of a high priority on Didipio being sorted out, with various options to be considered.

At this stage it looks like Baker Steel sold out of part of their position as gold trended down, and I think there might have been mention somewhere about heavy rainfall in Otago, perhaps they picked up on it. The lower grades had already been mentioned in the first quarter report.

http://www.oceanagold.com/images/documents/files/100729_oceanagold_q2_2010_results_summary.pdf

http://www.oceanagold.com/images/documents/files/100630_q2_2010_mda.pdf

http://www.oceanagold.com/images/documents/files/100630_ogc_q2_2010_financial_report.pdf

Some articles on the reports so far follow:

http://www.guide2.co.nz/money/news/business/oceanagold-forecasts-increased-production/11/18384

Don't expect much from the ASX today: how to look at the data from another viewpoint:

http://news.smh.com.au/breaking-news-business/oceanagold-profit-down-80-pct-20100729-10xm6.html

Other miners will have tidier books, the results easier to report:

http://ca.news.finance.yahoo.com/s/29072010/6/finance-barrick-eldorado-profits-soar-record-gold-price.html

Silverlight: I rang Direct Broking and spoke to Johnny on the helpdesk there: an example of an international trade is when a larger outfit or broker buys (say OGC) on the TSX and makes the step of bringing the shares back to the NZ exchange. Some brokers offer this as an overnight service, Direct Broking don't. The idea is often to onsell here, and a small margin for the reseller is OK if the volume is large. But I take your point about a re-reporting or paper transaction.

So the IN figure sometimes represents more OGC shares over here, and if the transaction(s) were done in a short duration, we can get an idea on the prices some larger firms are paying for the shares. This morning the activity is much lower, so I guess the Q2 report is not seen as that exciting. The IN figures could also be a whole lot of small transactions.

Johnny did say that they are keeping an eye on OGC relating to it possibly being in the NZX50 in future, the only issue he could see that might now be holding it back, is the number of shares tied up in large blocks. Not their decision of course.

[GR8DAY]

...Elz, how cud you possibly take anything but a HUGE positive out of those numbers?? OPERATING MARGINS HAVE INCREASED FROM $192 AN OUNCE TO $629 AN OUNCE!!! Man alive that is just phenominal or however you spell it....someone's pushing all the right buttons at the top that's for sure.

[elZorro]

...Elz, how cud you possibly take anything but a HUGE positive out of those numbers?? OPERATING MARGINS HAVE INCREASED FROM $192 AN OUNCE TO $629 AN OUNCE!!! Man alive that is just phenominal or however you spell it....someone's pushing all the right buttons at the top that's for sure.

OGC also made some great money at times when their gold was hedged, depended on the timing I guess. That's why this report is difficult to follow, I'd need more time. Do keep an eye on the PoG, as at this stage there is no quick option for much more production from the plant. Your timing has been good, mine not so good for now, and I'm learning a lesson.

As these historical debts and costs get moved back and paid off, there should be a dramatic cashflow improvement in the reports, assuming gold stays up. OGC stated that their policy at the moment is to remain unhedged.

A bit of info on Stockhouse about taxes. OGC pay most of their tax in NZ and at the moment are working through their 'tax assets' (read - previous losses).

http://www.stockhouse.com/Bullboards/MessageDetail.aspx?s=OGC&t=LIST&m=28451315&l=0&pd=1&r=0

[mistymountain]

From my readings gold is predicted to drop a wee bit then bounce back and up through 2011 , 2012. This is when OGC will get tremendous traction.

Combine that with Didipi, resource upgrades and we have some positive reports to look forward to.

My guess is dividends by 2012

[elZorro]

From my readings gold is predicted to drop a wee bit then bounce back and up through 2011 , 2012. This is when OGC will get tremendous traction.

Combine that with Didipio, resource upgrades and we have some positive reports to look forward to.

My guess is dividends by 2012

Thanks MM, I take your point that OGC is a bigger opportunity than the trading over the last two months has indicated. The linkage of the share price to the gold price is one of the more useful trends to emerge (thanks for the post Waterboy).

In mid-May Baker Steel Capital Managers announced an increase in the number, but a dilution in voting power of, their OGC shares, and at that stage CF Ruffer Baker Steel Gold Fund had 13,501,918 shares, and three other funds had some more, a total of 21,133,143 shares, 9.27% of the company. They are held on the ASX and TSX. The share price rose for some weeks after that, gaining another 25% at its peak in mid June, helped mostly by the gold price it would seem. It's about then that Baker Steel might have decided to take some of these gains.

By June 24 they had sold a net 2.4mill (good timing in retrospect), and by July 21 had sold another net 0.6mill, for less return. The PoG was trending down during this stage.

If the FA work is correct, there will be plenty of opportunities for Baker Steel to re-invest in OGC for another period of strong gains, and they probably still have 85% of the holding they reached on May 12. It's quite probable they are buying and selling quite frequently as dips and peaks occur.

I'm going to keep an eye on the OGC press releases and the PoG, which is holding at US$1182 for the weekend after a swift $10 rise.

[waterboy]

This quarterly report is a bit hard to follow or to compare against other quarters. In future it should be a lot simpler as hedge contracts are now paid off according to the following.
The net outflow includes a 56.7 million payment to settle the balance of hedge contracts.

Without this outflow and if gold prices hold then one would have to expect a much better profit in the next quarter. Not sure if there are any other liabilities due next quarter from report, it would appear not but they may use money to pay off longer term debt.

The POG on Friday was up on reuters, but down on CNN but pretty flat on nymex, anyone know which is the most up to date....I think there has been some after hours changes.

[elZorro]

This quarterly report is a bit hard to follow or to compare against other quarters. In future it should be a lot simpler as hedge contracts are now paid off according to the following.
The net outflow includes a 56.7 million payment to settle the balance of hedge contracts.

Without this outflow and if gold prices hold then one would have to expect a much better profit in the next quarter. Not sure if there are any other liabilities due next quarter from report, it would appear not but they may use money to pay off longer term debt.

The POG on Friday was up on reuters, but down on CNN but pretty flat on nymex, anyone know which is the most up to date....I think there has been some after hours changes.

No help on this one from me, I'm just hopeful PoG might move up next week. Some on the Stockhouse thread think so.

This might be getting ridiculous, but if your graph is correct, here's a formula to calculate what OGC should be priced at, assuming that the price oscillates a bit, but returns to be in line with the gold price every so often.

OGC price (in NZ cents) = [1.16 X PoG (in US$)] -1000 (error might be as much as +/- 50 cents).

Not sure why the intercept turned out to be close to exactly 1,000, but I just took some crossover points from your graph.
This makes more sense to me than TA graphs, because investors know that OGC has a fixed output of ounces per quarter.
This would change if higher grades were used, the plant changed, another mine opened, or a very positive press release changed the fundamental valuation. Take no offence TA posters...

I plotted some other points from the TSX over the last 2-3 months, and these all lined up in a linear way too: a strong correlation of PoG to OGC price at the peaks and ends of the month.

Canadian price OGC (c) = [0.8 x PoG (US$)] -660 approx.

Of course, if this equation is of any use, there's no point doing any FA work is there? Except to spot any effects on the equation.

Special note: use of the equation is probably fraught with danger ;)

[Hoop]

.........
......Not sure why the intercept turned out to be close to exactly 1,000, but I just took some crossover points from your graph.
This makes more sense to me than TA graphs, because investors know that OGC has a fixed output of ounces per quarter.
This would change if higher grades were used, the plant changed, another mine opened, or a very positive press release changed the fundamental valuation. Take no offence TA posters...

None taken el Z...:)

[Phaedrus]

This makes more sense to me than TA graphs, because investors know that OGC has a fixed output of ounces per quarter.... Take no offence TA posters...Why on earth would TA posters take offence elZ? Entering/exiting gold stocks in accord with the PoG is in fact quite a common practice.
Here, then, is an example of a purely technical approach to trading OGC, based on the price of gold. You can see that all the indicators shown here would have had you out of gold (and OGC) a month ago. OGC has fallen a further 45 cents since then.
Note how the Double Top (Bearish) and the Bearish Divergence flagged incipient weakness.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/PoG81.gif

OGC(NZ), OGC(Aus) and Gold charts are all much of a muchness - just as you would expect. Because of the much higher volumes traded, Aus data probably monitors OGC slightly better than NZ data.
Observe the very close correlation between signals derived from the gold chart above and the OGC(Aus) chart below. In fact, the Gold exit signal triggered pretty much right in the middle if the OGC derived Sell signals, as you can see. (The prices in red are the OGC selling prices at the time of each signal.)

http://i602.photobucket.com/albums/tt102/PhaedrusPB/OGCau81.gif

[elZorro]

Thanks Phaedrus, that all makes sense, I like the Relative Volatility Index, that was the first TA sell signal. It looks to me like some in the market reacted even to the double top.
Regards.

[Hoop]

Thanks Phaedrus, that all makes sense, I like the Relative Volatility Index, that was the first TA sell signal. It looks to me like some in the market reacted even to the double top.
Regards.

The 3.60 support level broke with a gap down on the same day (30th June).as well as the RSI(14) [not shown on OGC chart]... elZ

All the technical ducks lined up in a row on this one ...eh.

Now the $million question ..where's the bottom?
The good news so far is that the A$2.80 support is proving to be a reasonably strong support level.

Hands up those who are buying with P's red flag flying :)

[Phaedrus]

I like the Relative Volatility Index, that was the first TA sell signal. Don't forget that when selecting these indicators you do not know (and cannot know) which will fire first. Certainly the RVI was first this time with this stock, but on another occasion with another stock it could be the last. That's why it makes good sense to utilise a "suite" of indicators rather than relying solely on any one.


It looks to me like some in the market reacted even to the double top. Without doubt some in the market would have, but don't overlook what actually caused the Double Top in the first place. It was Gold attempting to break above a level of previous resistance and failing.


Of course, if this (OGC:PoG) equation is of any use, there's no point doing any FA work is there? As someone that advocates the use of both TA and FA, I couldn't possibly agree, elZ! Not publicly.
As I have pointed out in previous posts, whatever your fundamental assessment of a stock, you won't make any money out of it unless/until the market agrees with you.

Market sentiment rules, OK!

[PhaedrusFollower]

Im in again. 2.86... the worm has turned, 3.50 here we come again.

[elZorro]

Don't forget that when selecting these indicators you do not know (and cannot know) which will fire first. Certainly the RVI was first this time with this stock, but on another occasion with another stock it could be the last. That's why it makes good sense to utilise a "suite" of indicators rather than relying solely on any one.

Without doubt some in the market would have, but don't overlook what actually caused the Double Top in the first place. It was Gold attempting to break above a level of previous resistance and failing.

As someone that advocates the use of both TA and FA, I couldn't possibly agree, elZ! Not publicly.
As I have pointed out in previous posts, whatever your fundamental assessment of a stock, you won't make any money out of it unless/until the market agrees with you.

Market sentiment rules, OK!

Phaedrus, I must admit that I was very reluctant to accept that OGC simply followed the price of gold, regardless of their press releases. There's a message for management there of course. If they want OGC to move to a more fitting price multiple from their gross profit on gold sales (say 5, currently on about 3.5) , then the market will want to see a movement towards increasing production/sales. If targets are not met or exceeded, the opposite could happen. Fortunately OGC has a few avenues to do this in future: here are some possibilities.

The new digger (although the older unit might be rotated out)
Increased grades to be mined near existing facilities at Reefton, Macraes
Didipio?
Macraes pit enlargement/Round Hill?
Install another autoclave, at Reefton?

Meanwhile (and welcome aboard again Phaedrus Follower) we are all stuck with the PoG. I found a site yesterday that spends all week analysing the gold and silver market before creating a report. The report is available free only until the end of August.

http://www.gotgoldreport.com/

http://www.gotgoldreportsubscription.com/COT20100731.pdf


Summation for GOLD as at 31st July•

We reentered the long gold trade this week with an entry of $1,159
equiv. as we detailed in the web log, having been patient, waiting for
our expected support zone since being profitably stopped in May.
Gold immediately moved higher to test the $1,180s allowing us to
raise our trading stop from near $1,144 to our “cost” for a no-loss
stop.
•Whereas before this week we think the largest commercial traders
strong reductions of net short positioning hinted of less confidence on
their part of lower gold and silver prices, this week the PM
commercials actually increased their net short positioning even as
gold fell $30 while the open interest was flat. Only after then did gold
seem to hit a “floor” in the $1,150s – right where we expected it to.
•As we mentioned last week, we continue to believe that any further
dips in silver are likely to be surprisingly well bid as the LCs are likely
motivated to further reduce their net short positioning. It is only a
question of time before the pent up long side seeks to exploit that
condition. If confidence in overall markets continues to heal we
expect that the summer doldrums for silver will end early this year.
•Gold really hasn’t corrected all that much in U.S. dollar terms, only
about 8.7% peak to trough and about 6.6% net, but we believe the
COT data shows and shows clearly that the largest of the largest
commercial “hedgers” and short sellers are much less confident of
lower gold (and thus silver) prices than they were five weeks ago.•
Having reentered gold on the long side, the COT data this week
increases our confidence to “pounce” should silver enter our expected
support zone shown in the chart just above and in the linked charts in
our full Got Gold Report, but if we do so it will only be with tight,
new-trade trailing stops for peace of mind and protection. Our
confidence is definitely increased, but not our recklessness.
•We continue to believe that silver is strongly undervalued relative to
gold.•This is for you, JB
We still think that significant to strong dips can be bought, but not
without appropriate new-trade trailing stops for protection and peace
of mind.

DYOR.. market up again last night. OGC flat/wavering

A small blessing, the books for next quarter might be tidier..from Bloomberg


Key developments for OCEANAGOLD CORP-CDI (OGC)

07/30/2010
OceanaGold Corporation expected to report Q3 2010 results on October 29, 2010. This event was calculated by Capital IQ.

For the quarter, the company expects to report a strong free cash flow. The company expects to produce 270,000 to* 290,000 ounces of gold in the fiscal 2010.

[Phaedrus]

I must admit that I was very reluctant to accept that OGC simply followed the price of gold, regardless of their press releases. It's called reality, elZ.

We all have to accept it sooner or later!

[BigBob]

It's called reality, elZ.

We all have to accept it sooner or later!

Just like the fact that the sp of NZO (loosely) has followed the price of BP over the last year or so.....

[Hoop]

Just like the fact that the sp of NZO (loosely) has followed the price of BP over the last year or so.....

If you stumble across two unrelated events that for an unspecified time period correlates, then why not make use of that opportunity while it exists....(A window of opportunity)

If you believed in "Paul the Octopus" you would've made a fortune in bets at the Soccer world Cup.....As bizarre as may be... it was realty at work.

[BigBob]

If you stumble across two unrelated events that for an unspecified time period correlates, then why not make use of that opportunity while it exists....(A window of opportunity)

Couldn't agree more....


If you believed in "Paul the Octopus" you would've made a fortune in bets at the Soccer world Cup.....As bizarre as may be... it was realty at work.

Unfortunately I went for the psychic parakeet Mani instead... :o)

[Hoop]

unfortunately i went for the psychic parakeet mani instead... :o)

lol :):):)

[elZorro]

According to both of the EZ formulae, OGC is trading cheap today, after the TSX finished at CAD$2.76. Gold is near to $1190, $30 up from its recent low. Have a look at the Gold thread on the ASX page: China has indicated it's freeing up their gold market to help with popular demand for gold purchases. All good.

See page 2 of this report, a lot of good detail about OGC from OB Research.

http://www.ob-research.com/sites/default/files/Company_Updates_Aug_3_2010.pdf


OceanaGold Recommendation: Buy
(TSX:OGC) Price: C$2.75 Dec 31st target: C$ 5.00
OceanaGold (T.OGC)
The second quarter was not as strong as we anticipated, much due to weather conditions. Macraes
operations (open-pit and underground) were out of action for more than a week. During the first six
months, a total of 132,388 oz were produced at cash cost of $557/oz. The company still maintains the guidance for 2010 to produce 270,000-290,000 oz at a cash cost of $455-$495/oz. This tells the
shareholders that the second half of 2010 will be much better, and the key to the increased
performance will be the head grade fed into Macraes mill. According to the mine plan they were supposed to mine lower grade ore during the first and second quarter, moving into higher grades
second half of 2010.

With the recovery rate at over 84% (81% in 2009), the higher grade will push up production and cut cash cost.
Oceana's exploration plans going forward
• To expand the open-pit area at Macraes, further drilling will commence
• In the north tenements of the 28 km line of strike at Macraes, sampling and trenching is ongoing to
identify new drill targets. Drilling planned to commence during Q3
• Drilling is ongoing throughout the year to increase resources and reserves at Frasers underground
mine and to convert resources to reserves
• At Reefton, 1200 grab samples are planned to identify prospective targets
• New drill programs targeting potential underground targets at Reefton (recently announced increase in the Reefton exploration budget)

Oceana have put focus on exploration, starting drill campaigns that are rapidly addressing the issue of a "short minelife". Inferred resources are converted into M&I and thereafter, on a massive scale, being moved into Proven & Probable. At the current production rate, Oceana have total resources of 20 years in NZ and we expect them to stabilize at around 8 years of P&P reserves and thereafter steadily replace the annual production with new reserves for years to come.

Finally we would like to point you towards the exploration campaign at Reefton. We have previously "painted a picture" of Oceana being a 280-300.000 ounce producer for many more years than the market give them credit for, but we have not really seen any reason to discuss growth in NZ. That could be about to change, as the company sets out on a massive exploration drive in the extremely interesting Reefton area. Reefton has a long history of gold production of much higher grades than what is currently mined. We recommend you to follow updates very closely and that you keep an open mind towards OceanaGold becoming a growth company.

We believe that OceanaGold will reach our target of 285,000 ounces for the full year and we are
particularly impressed by the improvements in recoveries to 84%, but after the first 6 months we
choose to adjust our expectation upwards for depreciation and therefore total cash cost. This will
mean somewhat lower expected net earnings during 2010 and 2011.

We expect to have an updated report on Oceana during the fall.
We hope that the company will visit us and hundreds of happy current and future Swedish
shareholders in October. OceanaGold is our core holding and we expect great things in the coming 12 months as things looks very promising and management is "top notch".

Maybe I can't use the Direct Broking site properly: but under Market Indices, (ALL NZX), OGC does not appear on the table, hasn't done for 2-3 weeks or more. Weird huh? Not much chance of it getting to the NZX50 then..

[elZorro]

OGC reached CAD$2.86 overnight, closed at $2.85, equiv NZ$3.81, with over 900,000 shares sold. Gold got itself over the $1200 hurdle for a small while too.

Simon Hartley has the gen on Didipio, for MistyMountain..


Broker says OceanaGold’s Didipio looking more attractive
Simon Hartley — 4 August 2010 NZResources.com

OceanaGold Corporation’s copper and gold mine development in the northern Philippines has been mothballed for more than two years -- with seemingly few prospects on the horizon to reignite the Didipio project.

However, underpinned by rising global metals' prices, the mothballed development is at least increasing in value and making it a more attractive investment, according to Craigs Investment Partners broker Peter McIntyre.

“2011 copper [price] prospects are strong but Oceana won't be able to participate in it. The upside is they are sitting on a good asset,” McIntyre said.

In its most recent full-year report, for calendar 2009 released in March, Oceana said the proposed Didipio site was expected to have four years of open pit mining and nine years of underground mining -- milling 2.5 million tonnes per annum to average 120,000 oz of gold and 15,000 tonnes of copper during each year of its first decade of operation.

In a cash-less merger with Sydney-based Climax in July 2006, Oceana took over the Didipio project and went on to inject about $US80 M into development; with assessments at the time Didipio would in production by mid-2008, to deliver 260,000 gold-equivalent oz from copper and gold. About 60% of the bulk earthworks were completed.

However, by May 2008 Oceana had suspend development of Didipio in the face of doubling of development costs, from $US160 M to $US320 M, just as the global credit crunch took hold and spooked investors from high-risk projects.

Oceana has since then been looking for investment partners and funding, possibly about $US185 M.

“Circumstances [declining global investment] were conspiring against them. But I would have thought after a couple of years they would have had a joint venture partner lined up,” McIntyre said.
He noted global copper prices, which pre-recession had hit record highs, were last month up 11.5%. Oceana's investment in Didipio took most analysts by surprise and prompted many to query whether it should have gone down that track.

Oceana management said there were no further updates on Didipio at present. Oceana's second quarter and half year results, released late last week, only reiterated what has been noted in earlier reports, that the project remained under care and maintenance with a reduced workforce and was still “currently evaluating various strategic and funding options.”

“This is currently a key priority for the management team with good progress being made during the quarter,” that report said.

In view of the current surge of funds into mining exploration in many quarters, I'd think $185mill wouldn't be hard to find internationally. Maybe Mr McIntyre is suggesting we keep an eye on this possibility sooner rather than later.

Another good day for OGC, up 3% so far, just after midday :)

[elZorro]

OGC finished at CAD$2.94 this morning, I thought it was heading for $3! Good volume - over 900k shares. Some 50k and 25k orders being placed. Stockhouse comments on 80 year mine life may have helped that market, apparently they look at such things over there, when comparing miners.

PoG is about 1195, which means: OGC (CAD cents) should be around (1195 x 0.8)-660 on a good day = 296 (EZ eqn 2)
No-one is more surprised than me, that the two match up quite well.

As the exchange rate cross for US$/CAD$ can range around +/- 3% or so, but is currently near 1:1, I think the CAD eqn (2) is likely to be more accurate, and bigger volume over there. So to get the AUD and NZD equivalent for OGC:

NZ Price (OGC) = [[ PoG x 0.8 ] -660 ] /NZ-CAD exchange rate (about NZ$3.98 today, start)

Aussie price (OGC) = [[ PoG x 0.8 ] -660 ] x NZ-AUD exchange rate/NZ-CAD exchange rate
(about AU$3.16 today, start) (or use the AUD/CAD cross rate to make it simpler)

These equations are probably a bad idea, I'm just floating it as an option. If OGC run higher grades through the autoclave, as soon as the market finds out about it, the equation should change, the slope will increase.

In the meantime, it helps to price the share when the market is being optimistic, like today. It means that OGC follows the PoG tightly, and other traders must be using an equation of some kind to do their pricing too.

[GR8DAY]

....cheers Elz, still holding tightly and they're looking well supported at this stage. Apparantly the Gold buying season is about to start in India which will possibly push GP higher again?? I read somewhere the Indian yuppies (pseudo rich and genuine rich) are investing heavily into gold also.....will be interesting to monitor this new development (in Indian culture) over the next weeks and months and see whether it's just hype or for real?