This one has been one of my favourites for a couple years, started buying in the $1.40 range. The latest news release says cash costs for the new mine (Didipio in Philippines) under construction for the first six years of mine life are -$79/oz!!! That's right, net of byproducts ($3.00/lb copper credit), the gold comes out of the ground for free plus $79/oz. Annual production from Didipio is 100,000 oz Au and 14,000 oz Cu. According to the company, this is one of the highest grade gold copper porphyries under development in the world today.
Current production from three mines in New Zealand is 260,000 to 280,000 oz Au annually with proven/probable reserves about 3.6 million oz. They are also 100% unhedged.
Sorry, screwed up the symbol - it's OGC-T. I don't see an edit button yet.
Edit - OK, I can edit the second post, but not the thread starter. If the admin sees this, please change the thread title to the correct symbol.
By the way just to correct the earlier post, . Annual production from Didipio is 100,000 oz Au and 14,000 oz Cu.
The actual estimated annual production from Didipio is 100,000 ozs GOLD and 14,000 tonnes of Copper, which is equivalent to over 30 million LBS of copper
That equates to about 270 million $ worth of sales annually from Didipio at current metal prices and with terrific economics. 150 million from gold and 120 million from copper in gross sales.
Add the NZ production to the upcoming Didipio mine and you will see gross annual revenues of over 675 million $ ,US which exceeds OGC current market cap of 625 million CAD.
OGC currently trading at 11.5 P/E which is certainly lower than most in the peer group. If fact i see several explorers valued higher with less in ground and no production , with the huge costs of permitting and construction still to come.
OGC getting very little valuation and respect for their operations and the gold /copper reserves and resources, and seems like 0 for the projected growth.
Hi, I just wrote a short analysis of Oceana in my blog: https://www.economicfreefall.com/2011/07/another-miner-i-like.html
I really like this company and have owned it for some time, but I wonder if I have ever seen it this cheap! It feels a lot safer than most other miners as well...
Another good play is Oceana Gold. I think we are all trading the same stocks. lol It just goes to show you how many undervalued miners there are in the market. I think come October we will all be looking great if we just hold on and add at any dips. Good Luck!!
American Bonanza is the only PM play that I own that has not moved up with the price of gold. When they announce production in 4-8 weeks the price should double!!
I would load up on Oceana for their 2Q earning results on Thursday after the close. I have a feeling they are going to crush earnings!
Well, much worse cash costs than expected so earnings not as good as one hoped. I'm not sellling any though. OGC is already selling 30% below its peak when gold was at around 1200. You can't find any producer with similar production for this price, plus we've got Didipio coming online in 15 months which will bring cash costs down significantly. Still a strong buy despite a worse than expected quarter. They still trade below 5 in P/CF using the first half of 2011 as guidance.
Here's my take on the ongoing slaughter of Oceana: https://www.economicfreefall.com/2011/07/damn-you-shares.html
They sold off today as if they lost money on the quarter. Way undervalued, I'm just glad I didn't have much in this play and I originally bought at $2.50.
Very disappointing earnings for OGC, debt and rising costs , due to the NZ $ gains, made it look rather poor.
Didipio will be the big driver in the coming year, as the economics there look amazing, mining is projected to be cash cost negative for gold.
Below are the five companies in the Gold industry with the lowest Enterprise Value (EV) to Sales ratios. EV/Sales gives investors an idea of how much it costs to buy the company's sales and the lower the ratio, the more undervalued the company is believed to be.
OceanaGold (NASDAQ:OCANF) has the lowest with EV/Sales of 0.07x; Golden Star Resources (AMEX:GSS) is next with EV/Sales of 1.46x; and Northgate Minerals (AMEX:NXG) has the next lowest with EV/Sales of 1.7x.
Newmont Mining (NYSE:NEM) follows with EV/Sales of 2.73x and Jaguar Mining (NYSE:JAG) rounds out the group with EV/Sales of 3.05x.
SmarTrend currently has shares of Northgate Minerals in an Uptrend and issued the Uptrend alert on July 14, 2011 at $2.96. The stock has risen 8.8% since the Uptrend alert was issued.
Just mentioned some about Oceanas low valuation...
Oceana hasn't made anyone happy (beside the shorts) lately. It is just one of those stocks that simply has to go higher because of the company's underlying strength, despite an awful technical outlook. Oceana has great assets, a lot of cash on hand, operates in safe jurisdictions and has a boost in production coming up next year. The NZ dollar has come down a little bit versus the US dollar, so cash costs shouldn't keep climbing this quarter. Plus, the major move we've had in gold has more than made up for any currency-induced losses. I can't imagine Oceana not being in ATH territory by this time next year if gold stays strong. https://www.economicfreefall.com/2011/08/what-are-our-miners-doing.html
Oceana has been on the move up since getting kicked after the Q report. Really the growth story, ( along with the record gold price) should have OGC at a much higher level. P/E ratio, price to metal in ground, price /sales, most of the parameters used to measure gold producers, would put OGC at the top of the list of buys.
Maybe management a question mark here, but if they continue to execute well in NZ and bring Didipio online as forecast, this one has a lot of upside. jmo
Mr. Mick Wilkes reports
OCEANAGOLD PROGRESS UPDATE ON THE DIDIPIO PROJECT
OceanaGold Corp. is providing a progress update on construction activities at the Didipio project located in northern Luzon, Philippines.
Mick Wilkes, managing director and chief executive officer, commented: "We continue to make good progress on construction activities at Didipio, with the key milestone of pouring first concrete on schedule in November, 2011. Mining activity is on track to commence in January, 2012, and we expect to commission the process plant in fourth quarter 2012. This project will transform OceanaGold, producing on average 100,000 ounces of gold and 14,000 tonnes of copper at cash costs net of byproduct credits of $356 (U.S.) per ounce of gold over a 16-year mine life."
A total of 258 people have been engaged for construction of the project, which commenced in June, of whom 25 are managers, engineers or supervisors.
Oceana up over a buck since the low in early AUGUST, which is about a 50% runup.
It was oversold on the disappointing earnings report, and a lot of the negative was currency issues with the NZ dollar rising vs the sagging US toilet paper, and causing the costs to mine to rise in NZ.
Now that negative has drifted away somewhat and OGC announced they have begun pouring concrete at Didipio, the new mine set to come online in the next year or so. Terrific economics there with cash cost negative for gold after copper byproducts are figured in ( with copper at 4$ US)
Still one of the best buys in the gold miner space imo.
And Amen to your comments about Oceana!
Just when I was thinking OGC was heading back to a more reasonable valuation and looking for a breakout on the upside of the channel, we get blasted down to $2.20 in two days of trading, or should I say, selling. I'm likely adding if we break under $2 again.
Up over 10% today, it was a bit under the radar imo. Perhaps some bigger players taking an interest here.