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OceanaGold staffers await outcome of NZ operations review
Simon Hartley — 5 August 2013
Wage freezes are said to be on the cards for OceanaGold Corporation (ASX, TSX & NZX: OGC) staff as the miner continues its company-wide review, which has already found more than $US100 million ($NZ126.4 M) in cost reductions.
The likelihood of a wage freeze was first mooted by OceanaGold chief executive Mick Wilkes in mid-June, with a company market update late last week saying wage freezes had been identified among the $US100 M cost reductions.
The reductions include deferment of heavy earthmoving at Reefton and Macraes, the scaling back of New Zealand exploration and unspecified cuts to the use of contractors.
In spite of nearly 1,000 staff being employed by in New Zealand across its East Otago and West Coast operations, OceanaGold had not by Friday released any staff-specific update from the review.
The company is understood to still be in negotiations with the Amalgamated Workers Union, which covers the majority of staff at Macraes in East Otago.
The latest corporate presentation outlined that estimates of 2013 production and earlier cost guidances were on track.
OceanaGold's Didipio gold and copper mine in the northern Philippines is estimated to produce between 50,000-70,000 oz of gold and 15,000-18,000 tonnes of contained copper, with copper sales offsetting the cost to produce gold to a negative $US370-$US50/oz for the year.
Overall New Zealand operations for the year estimate production of between 235,000-255,000 oz of gold, at a production cash cost of $US650 to $US800/oz.
While the Macraes site has a mine life to 2020 at present, OceanaGold announced its Globe-Progress open cut operations was being cut short by two years and would be mothballed by mid-2015.
Globally gold producers are cutting staff levels, some are virtually halting exploration and the large number of Australian gold exploration juniors are downsizing on all levels with some invoking wage cuts that also take in some chief executives and senior management.