Oceana revenue and profit down for quarter
OCEANA Gold has reported decreased quarteronquarter revenue and profit, following a 24.3% decline on gold sales.
As forecast for its first quarter to March trading, gold production declined 24.4% from 166,211 ounces to 125,646 oz, while the crucial allin sustaining costs to produce an ounce rose 41.6% from $US564 ($NZ798) to $US799 ($NZ1131), Oceana chief executive Mick Wilkes said.
The quarteronquarter increase in unit costs was expected and related to lower gold sales, he said.
‘‘Unit costs are expected to decrease as the year progresses,’’ he said in a statement.
The allin sustaining cost average profit margin of gold, spread across all its four mines, was $US541 per ounce.
Gold sales for the quarter declined 24.3%, from 168,586 oz to 127,473 oz.
Copper production, from Didipio in the northern Philippines, rose almost 5%, from 3687 tonnes to 3889, while its price eased from $US3.17 per pound to $US3.03.
Revenue for the quarter fell from $US246.1 million in the quarter to December to $US196.7 million, earnings before interest and tax declined from $84.2 million to $US45.8 million and aftertax profit was down almost 50%, from $US88.6 million $US44.5 million.
‘‘Operationally, gold production was generally in line with our expectations, despite a severe cold weather event that impacted the Haile operation early in the year,’’ Mr Wilkes said.
‘‘In the Philippines, rampup of the underground operations is progressing to plan,’’ he said.
Craigs Investment Partners broker Peter McIntyre said the quarter provided ‘‘a reasonable result’’, but with concerns about rising production costs.
Despite the overall rising costs, which are expected to wane in the second half, Mr McIntyre said Oceana’s balance sheet was otherwise in ‘‘solid shape’’.
Mr Wilkes highlighted a ‘‘major milestone’’ had been achieved at Waihi, in Coromandel, where Oceana had begun the consenting process which could boost mine life by a decade.
Its Martha Project would go underground next to the historic pit, which has been closed by slips since April 2015.
A Oceana chairman Jim Askew said nonexecutive directors Dr Diane Garrett, William Myckatyn and Jose Leviste would not be seeking board reelection, at the company’s upcoming annual meeting on June 1, and Ian Reid had been appointed as a nonexecutive director.