May 17, 2020

OceanaGold Shares Soar: See How the Lowest-Cost Gold Producer Operates

Oceanagold
Australia gold mining company
Macraes goldmine
Admin
2 min
OceanaGold shares are soaring, 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 industryOceanaGold Corporation (TSE:OGC, ASX:OGC) rel...

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. 

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May 7, 2021

Lithium producers bullish as EV revolution ramps demand

Lithium
Electric Vehicles
Albemarle
SQM
3 min
Lithium producers are drawing optimism from rising prices for the electric vehicle battery metal

Rising demand for lithium is stoking prices for the electric vehicle battery metal, fueling long-delayed expansions that still may not produce adequate supplies that automakers need to meet aggressive production plans.

Lithium

Growing industry optimism from higher lithium prices is a change from last year when funding for mines and processing plants dried up during the pandemic.

Albemarle Corp, Livent Corp and other producers are scrambling to make more lithium, but some analysts worry the recent price jump will not spur a big enough expansion to meet a planned wave of new EV models by mid-decade.

Since January, General Motors Co, Ford Motor Co LG Energy Solution and SK Innovation Co, along with other automakers and battery parts manufacturers, have said they will spend billions of dollars on EV plants.

U.S. President Joe Biden has proposed spending $174bn to boost EV sales and infrastructure. The European Union has similar plans, part of a rush to catch up with global EV leader China.

Those moves have helped an index of lithium prices jump 59 percent since April 2020, according to data from Benchmark Mineral Intelligence, a commodity pricing provider.

The rising demand “reflects what feels like a real and fundamental turning point in our industry,” said Paul Graves, chief executive of Livent Corp, which supplies Tesla Inc. On Monday, it said it would more than double its annual lithium production to 115,000 tonnes.

Graves warned, though, that “it will be a challenge for the lithium industry to produce sufficient qualified material in the near and medium term.”

Albermarle

Albemarle, the world’s largest lithium producer, aims to double its production capacity to 175,000 tonnes by the end of the year when two construction projects are complete. Albemarle's Q1 profit beat expectations thanks to rising lithium prices. Chile’s SQM, the No. 2 producer, said its goal to expand production of lithium carbonate by 71 percent to 120,000 tonnes should be complete by December.

Australia’s Orocobre is paying $1.4 billion for smaller rival Galaxy Resources, a strategy designed to boost scale and help it grow faster in regions closer to customers.

“The next few years are going to be critical in terms of whether there’s enough available lithium supply, and that’s why you’re starting to see commodity prices start to ramp,” said Chris Berry, an independent lithium industry consultant.

The price gains helped Albemarle and other major producers, including China’s Ganfeng Lithium Co and SQM, post big gains in first-quarter profit and boost forecasts for the year.

Even China’s Tianqi Lithium Corp, saddled with debt due to years of low lithium prices, signaled that recovering demand should help it swing to a profit this year.

Electric Vehicles

Forecasts call for demand for the white metals to surge from about 320,000 tonnes annually last year to more than 1 million tonnes annually by 2025, when many automakers plan to launch new EV fleets, according to Benchmark.

Still, demand is expected to outstrip supply in 2025 by more than 200,000 tonnes, so lithium prices may need to rise to encourage producers to build more mines. That could boost the prices consumers pay for EVs. “Companies across the lithium-ion supply chain are in the best position they’ve been in for the last 5 years,” said Pedro Palandrani of the Global X Lithium & Battery Technology ETF , which has doubled in value in the past year.

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