OceanaGold rises on improved 2017 outlook

VANCOUVER (miningweekly.com) – The TSX-listed stock of multinational gold producer OceanaGold on Monday rose as much as 3.54% to C$3.80 apiece following a company announcement stating that it had lifted expected 2017 output by 35% over the current year and reduced all-in sustaining costs (AISC) by 15%.

Melbourne, Australia-based OceanaGold said it expected to produce between 550 000 oz and 610 000 oz of gold, at an AISC of between $600/oz and $650/oz during 2017, up from a 2016 guidance of between 385 000 oz and 425 000 oz produced at an AISC of $700/oz to $750/oz.

The impetus for the improved outlook is the Haile gold project, in South Carolina, which OceanaGold acquired at the end of 2015 through the C$856-million acquisition of Canadian project developer Romarco Gold. Haile is nearing construction completion and wet commissioning.

The lower AISC profile is thanks to lower costs expected from the Didipio copper/gold mine and the inclusion of high-margin ounces from Haile.

“Looking to the year ahead, we are well positioned to generate significant free cash flow, even in a lower-gold-price environment. Our strategy to create a high-margin business from our portfolio of high-quality assets has been a successful one thus far,” stated president and CEO Mick Wilkes.

Meanwhile, OceanaGold also reported that its 2016 exploration programme demonstrated significant organic growth potential across its portfolio.

In particular, the company said it is sharpening its focus on North and South Carolina, where it is exploring for more Haile-like deposits.

Meanwhile, OceanGold is making progress regarding its exploration target Waihi, on New Zealand's South Island. The company's target is to discover a further one-million ounces of resource over the medium term.