High gold prices boost OceanGold's full-year profit

OceanaGold Corporation, operator of the Macraes gold field who joined the NZX 50 in September last year, reported record annual sales as the company benefited from peaking world gold price during the year.

Earnings before interest, tax, depreciation and amortisation increased 17% to $US163.9 million for the year ended December 31. Net profit after tax fell to $US44.2 million in the year ended December 31 from $US44.4 million as an accounting gain on a year earlier wasn’t repeated in the latest period.

Gold sales increased 29% to US$395.6 million and averaged US$1,587 per ounce, up from $305.6 million the previous year. The result was in line with brokerage Forsyth Barr’s forecast of $395.8 million.

The company’s Philippines-based Didipio Project met construction milestones, nearing completion of its accommodation camp and mobilising its mining construction site, as well as expanding its Frasers Underground mine life until 2017.

Chief executive of the company, Mick Wilkes, says the New Zealand operations posted relatively stable earnings in the 2011 year, continuing to generate positive free cash flows.

“With the construction of the Didipio Project progressing according to plan and scheduled to commission in the fourth quarter 2012, combined with exploration opportunities in New Zealand and the Philippines, the company is on the right track to achieve its strategic targets,” said Mr Wilkes.

Gold sales for the fourth quarter totalled 62,515 ounces, compared with 68,027 ounces in the same period the previous year, with total sales for the year being 249,261 ounces compared with 268,087 ounces in the year to December 31, 2010.

The average gold price in the quarter was $US1,705 an ounce and for the year the average gold price was $US1,587 an ounce, compared with $US1,140 and ounce in 2012 and $US790 in 2009. Cash operating margin rose by 20% from the previous year to $US712 an ounce.

OceanGold’s shares are currently up 1% trading at $2.90 a share, down 22.7% over the last twelve months.