OceanaGold Corporation, owner of the Macraes and Reefton gold mines in New Zealand, today progressed a $C78 million ($NZ107 million) capital raising to help fund a move to selling gold on the spot market and working capital.The company is selling subscrip
OceanaGold Corporation, owner of the Macraes and Reefton gold mines in New Zealand, today progressed a $C78 million ($NZ107 million) capital raising to help fund a move to selling gold on the spot market and working capital.
The company is selling subscription receipts at $C2.05 each in Canada. Each subscription receipt becomes a common share of the company. It is also selling ASX-listed Chess Depository Interests at $A2.18 ($NZ2.78) each. The price is the Australian dollar equivalent of $C2.05.
The capital raising has to be approved by shareholders on March 25.
A trading halt on OceanaGold shares was lifted early this afternoon after the details of the offer and bookbuild to set the price were released.
New Zealand institutions were offered the securities in this offer but the company is not saying if they took them up. It is expected that they were likely to have.
The company is listed in New Zealand, Australia and Canada. The share price fell 3c to $3.06 when it resumed trading in New Zealand.
OceanaGold wants to close out its forward gold sales contracts and gold call options and sell its gold on the spot market. At December 31 these contracts were "out of the money" by about $US89m ($NZ123.4m).
The company had essentially sought to put a floor on the price of gold to protect its earnings but the gold price has been much higher than expected.
The prospectus for this capital raising said the company's goal was to maintain steady state gold production from the New Zealand operations of 270,000 to 290,000 ounces per year while at the same time extending mine life through the conversion of mineral resources to mineral reserves and the new discovery of additional mineral resources at the Macraes and Reefton goldfields.
In addition, OceanaGold will pursue other growth opportunities from projects such as the Didipio Gold-Copper Project in the Philippines as well as through accretive transactions involving other producing or near-term production precious metals assets.
The company commenced site construction activities at the Didipio Gold-Copper Project in early 2008 but the project was placed on care and maintenance in December 2008 due to funding constraints and the deterioration of global economic conditions.
