OceanaGold Shares Soar: See How the Lowest-Cost Gold Producer Operates
Low cost and high production is helping OceanaGold's become a hot commodity in the gold mining industry
OceanaGold Corporation (TSE:OGC, ASX:OGC) released its first quarter production and revenue numbers on Tuesday, and things couldn’t be better.
The Melbourne-based company reported $170.4 million, EBITDA of $101.0 million and a net profit of $58.9 million, all records for the exploration company. Under an optimized mining plan, OceanaGold has seen its gold production increase to 86,568 ounces, thanks in large to its Didipio Mine in northern Luzon, Philippines. The mine produced an astounding 30,480 ounces of gold following its first year in operation.
On Tuesday the gold mining company was up 11.2 percent, changing hands for $2.78 on the Toronto Stock Exchange. Roughly 1.3 million shares were traded by 2:00 (EST) versus daily volumes averaging around 700,000. OceanaGold is up more than 67 percent since the start of the year.
A majority of the company’s success can be attributed to it low cash costs for gold, which is one of the best in the industry. Overall cash costs for the company was $170 an ounce while Al-In Sustaining Costs were $450 per ounce. These numbers have helped the Australian company pay back more than $20 million of debts.
Founded in 2003, the OceanaGold operates three in New Zealand, including the country’s largest gold complex at the Macraes goldfield in Otago This mine consist of a large scale open-cut mine and underground pit (Frasers Underground), which commissioned in 2008. The company also operates the Reefton Project, an open-cut mine with four open pits. The Pacific-Rim company commenced production on its newest mine the Didipio Project in April 2013, a high grade gold copper mine that is expected to produce approximately 100,000 ounces of gold and 14,000 tons of copper per year over the next 15 years.
OceanaGold is expected to produce somewhere in the range of 275,000 to 305,000 ounces of gold in 2014 from the combined New Zealand and Philippine operations. Copper production is expected to average 21,000 to 24,000 tons from the Didipio Mine.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.