Australasian mining company Oceana Gold has made a second announcement about increased mineral reserves at its Macraes goldfield site, extending the life of the mine to 2016.
Analysts say the company is in a strong position going into 2010, even if the g
Australasian mining company Oceana Gold has made a second announcement about increased mineral reserves at its Macraes goldfield site, extending the life of the mine to 2016.
Analysts say the company is in a strong position going into 2010, even if the gold price drops from its $US1130 an ounce price.
The dual-listed (NZX: OGC) company also expects further results in the next few months, as a result of its brownfields exploration project, said vice-president of corporate and investor relations, Darren Klinck.
“We have six drills turning at Macraes and one at Reefton and we are hoping that these drills will drive further announcements,” he said.
The company began a comprehensive geologic interpretation and economic analysis for the “Southern Pit” deposit last year.
One of Oceana Gold’s goals made in June last year when it raised $30 million to expand its exploration programme was to demonstrate there were many years left in New Zealand.
“This year marks 20 years of operating a commercial mine at Macraes, which is significant.”
In December, Oceana Gold announced an increase of 495,000 ounces of reserves at Macraes. The latest addition to reserves takes that number to 754,000.
But Mr Klinck said the total was not yet known, until the amount mined last year was subtracted.
“That will give an overall resource and reserves number.”
The gold price assumption used to calculate reserves was $US800/oz.
Hamilton Hindin Green's Grant Williamson said in his opinion, gold was somewhat over valued and would come down this year.
That would "most definitely" affect Oceana Gold and the wider Australian resources sector. But despite the company's fluctuating share price, gold had an underlying value.
"I expect a bit of volatility during the year, but overall, the company is still extremely well positioned. It does not have high operating costs and it will possibly trade very well, even if gold comes back."
Oceana Gold had "finally got its act together" and the market had given it a re-rating after a "disastrous" merger with Climax Mining in 2006, he said.
Oceana Gold's share price was up today to $2.39.
