OceanaGold: good news from the mine

[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.

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.

[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.

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/oceanag...ase-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/O...-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.

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...6&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?...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/doc...xploration.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.