OceanaGold 2014 gold, copper production beats expectations on Didipio mine

OceanaGold [NZX: OGC], which operates the Macraes goldfield in Otago, beat copper and gold production expectations in 2014 as its Didipio operation in the Philippines exceeded forecasts, and the mining company anticipates that higher production to continue this year.

The Melbourne-based company produced 307,363 ounces of gold and 25,010 tonnes of copper in calendar 2014, beating its forecast for 275,000 to 305,000 ounces of gold and 21,000 to 24,000 tonnes of copper, it said in a statement. Its New Zealand gold operations in Otago and Reefton were in line with forecasts, with its Didipio operation accounting for the better-than-expected haul. Cash costs were just below the mid-point expectations at US$418 per ounce, as were all-in sustaining costs at US$785/ounce.

OceanaGold expects production to grow in 2015, with between 195,000 and 215,000 ounces of gold produced at its New Zealand operations, compared to 201,207 ounces in 2014, and between 100,000 and 120,000 ounces of gold and 21,000 to 23,000 tonnes of copper from the Philippines, compared to 106,256 ounces of gold and 25,010 tonnes of copper last year. Cash costs are expected to be between US$450 and US$530 per ounce across all regions, and all-in sustaining costs are forecast to be in a range of US$770-and-US$840/ounce.

"I am very pleased to report another strong year of operational and financial performance at OceanaGold where we have exceeded our production guidance for the year on the back of record gold production from Didipio and a strong performance in New Zealand," managing director Mick Wilkes said. "In 2015 we expect more very strong results with higher gold production from both Didipio and New Zealand again generating significant free cash flow to further strengthen our balance sheet and improve shareholder returns."

The ramped up production from its New Zealand operations this year comes as OceanaGold scales back the local units in the face of falling gold prices. It plans to close its Macraes goldfield in Otago in 2017, and mothball its Reefton mine mid-2015, focusing on its cheaper copper and gold production in the Philippines.

OceanaGold has also been strengthening its balance sheet to cope with the falling gold price, and repaid US$60 million of debt through 2014, reducing debt by US$124 million over the past two years. The spot gold price was recently at US$1,276.60 an ounce.

The shares, which are also listed in Australia and Canada, last traded $2.52 on the NZX, and have gained 29 percent in the past 12 months.

The company will report its annual result on Feb. 19.

(BusinessDesk)