Up over 10% today, it was a bit under the radar imo. Perhaps some bigger players taking an interest here.
13 October 2011
OCEANAGOLD ENTERS INTO AGREEMENT ON SAMS CREEK PROJECT
(MELBOURNE) OceanaGold Corporation (ASX: OGC, TSX: OGC, NZX: OGC) (“the Company”) is pleased
to announce that it has entered into an agreement with MOD Resources (ASX:MOD) on the OceanaGold
100% owned Sams Creek Project located near Takaka in the South Island of New Zealand.
The Sams Creek permit covers 30.6 km and contains a JORC compliant inferred resource of 13.5 million
tonnes @ 1.78 g/t Au for 770,000 oz Au. Sams Creek was discovered in 1974 by CRA Exploration (now
Rio Tinto), which conducted extensive exploration in the 1980s, including 46 diamond holes for 5,847
drilled metres. In 1991, CRA Exploration sold its New Zealand gold exploration assets, including Sams
Creek, to an entity now owned by the Company. The last drilling program undertaken at Sams Creek was
Under the terms of the agreement, a 100% subsidiary of MOD may earn up to 80% interest in the project
by solely funding staged exploration programs. Additionally, subject to certain future outcomes and
appropriate approvals, MOD will also issue either 10 or 17 million ASX listed ordinary shares of MOD to
OceanaGold Corporation for nil consideration. At the October 10th closing price, this equates to script
valued at A$1.6 million (on a 10 million share placement) or A$2.72 million (on a 17 million share
Mick Wilkes, Managing Director and CEO commented, “We are pleased to be partnering with MOD on
Sams Creek and will work with them as they advance the exploration programs. Undertaking this
transaction is consistent with our strategy to unlock value within our current tenement holdings and to
maintain our exploration focus on the two most significant gold districts in the South Island, Macraes and
- ENDS -
For further information please contact:
Ms Nova Young
Investor Relations Officer
Tel: +61(3) 9656 5300
Mr Darren Klinck
Head of Business Development
An improvement over last Q and looks as tho OGC will produce about 240,000 - 250,000 ozs of gold this year from their New Zealand operations. High cash costs nearing 1000$ an oz.
Profitable, at these prices. Didipio will improve their overall picture substantially as the estimate is for negative cash costs for gold there after copper credits. Seems OGC not getting a lot of value just yet for that growth. I do not see many profitable gold miners with over 200,000 ozs of gold produced annually trading under a billion $ never mind under 700 million.
Profitable or not, I wouldn't even consider investing in a company with cash costs like that. And its not like its just a one time thing........their quarterly costs are trending up and their production is trending down.
Here's a little blurb on them.....just scroll down a bit
Oceana has major leverage to the price of gold despite high cash costs. They have $200 million in cash and make a net profit each quarter.
I guess you must have missed the part about DIDIPIO coming online?
They will be adding 100,ooo ozs of gold and 60,000 tonnes of copper production from there within the next year, AND at negative cash costs for gold. As far as the NZ operations go, they have trended down in the past year, BUT are still on track to produce 240,000 ozs of gold this year.
Very short term outlook saying their production is trending down.
Compare them to the likes of LSG , or a host of other with similar market caps, who dont have the resources and reserves , production, or good profits. OGC still trading at a very reasonable multiple to earnings and growth.
How many 240,000 oz gold producer who make 10 million a Q and have that kind of growth coming onliine can you list , that are under a 700 million $ market cap?
...Not many, but I guess you weren't asking me?;)
Oceana Gold has been showing strength lately and is back above the 200-day moving average. It's still in a broader consolidation pattern though and needs to break out to the upside to get some real momentum going. The long-term chart displays a 5-year cup and handle in the making and as gold continues to perform the odds are in favour of OGC rocketing higher in the future.