OceanaGold returns to full year profit, declares dividend

Profit was US$111.5 million in the year ended Dec. 31.

OceanaGold Corp, the gold and copper miner, returned to annual profit after its mine in the Philippines mine beat production targets.

Profit was US$111.5 million in the year ended Dec. 31, from a loss of US$47.9 million a year earlier when it recognised a US$193.3 million impairment, the Melbourne-based miner said in a statement. Sales rose 1.8 percent to US$563 million, while cost of sales increased 11 percent to US$289.9 million. The board declared a 4 US cents-per-share dividend, double its annual dividend policy of 2 US cents.

"This follows another strong year of financial and operational performance across the company, where we achieved record annual revenue and earnings and generated significant free cash flow," said managing director Mick Wilkes. "Despite the lower gold price over the past two years, the company has strengthened the balance sheet through repayment of nearly US$150 million in debt while increasing our cash position."

In OceanaGold's 2013 financial year it turned in a loss after writing down the Macraes goldfield in Otago, which closes in 2017, and its Reefton mine, to be mothballed mid-year. In the face of falling gold prices the company has shifted its focus on cheaper copper and gold production at its Philippines Didipio mine.

The company reduced its US banking facilities to US$87.8 million, from US$150 a year earlier, while boosting its cashflow from operating activities to US$214.9 million, from US$159.4 million.

The miner confirmed its January announcement that it had exceeded forecasts, producing 307,463 ounces of gold and 25,010 tonnes of copper in calendar 2014, beating the higher end of its guidance of up to 305,000 ounces of gold and up to 24,000 tonnes of copper. 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 also reaffirmed its outlook for production growth in the coming year. It expects 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.

"We look forward to 2015 where we expect to continue generating significant free cash flow through strong operating performance and a disciplined approach toward capital investments," Wilkes said. "Our strong technical and managerial experience coupled with our high margin business uniquely positions us to build a solid pipeline of high quality projects while strengthening our balance sheet and returning cash generated by the business to shareholders through dividends."

Shares of OceanaGold last traded at $2.70 and have gained 23 percent since the start of the year.