OceanaGold's 2015 production beats expectation, raises forecast for 2016

OceanaGold Corp, which bought the Waihi Gold Mine last year, extracted more gold than it expected in 2015 and is predicting it will exceed that again this year.

The Melbourne-based company produced 419,153 ounces of gold in calendar 2015, up 36% from a year earlier and beating the 380,000-410,000oz range projected when it upgraded its forecast to account for the Waihi acquisition last year, it said in a statement. Across its operations, the Macraes and Reefton sites were ahead of guidance with 222,093oz yielded due to higher production at the Reefton site, where the company will process stockpiles until the end of February before placing the mine in care and maintenance.

Waihi's extraction was near the top end of forecast with 69,973 ounces extracted during its partial contribution to the year, while the Didipio mine in the Philippines produced 127,086oz of gold, beating expectations, and 23,109 tonnes of copper, near the top of guidance. Cash costs of $US458 an ounce were within guidance of between $US420 and $$US470/oz, while "all-in sustaining costs" of $US709/oz were in the lower half of the forecast $US690 to $US740/oz.

"We not only exceeded our gold production guidance but did so at sector-leading low costs while further improving on our environment, health and safety record," chief executive Mick Wilkes said.

The miner forecasts gold production of between 385,000 and 425,000oz in 2016, largely due to Waihi making a full contribution to the year, while copper production is expected to slow to between 19,000 and 21,000 tonnes. Cash costs are projected to be $US460 to $US500/oz and "all-in sustaining costs" of $US700 to $US750/oz.

OceanaGold has allocated an exploration budget of $US25 million to $US30 million for 2016, of which half will go to the Haile Gold Mine in South Carolina, US, with $US5-$10 million set aside for Waihi and the remainder for the Macraes and Philippines sites.

Wickes said Haile is expected to be ready for commercial production in early 2017, while the other exploration programmes will seek to find new resources and extend the lives of the firm's other operations.

The company's shares, which trade in New Zealand, Australia and Canada, last traded at $2.90 on the NZX, and have gained 3.2% this year.

(BusinessDesk)