8 Oct 2012

OceanaGold shares rise

7:55 am on 8 October 2012

Shares in listed mine company OceanaGold have reached the highest point in about two years, as the firm prepares to open the Didipio mine in the Philippines.

OceanaGold says the new mine in north Philippines could produce about 100,000 ounces of gold and 14,000 tonnes of copper each year over a 16 year period.

Shares in the company, which expects to start processing at the mine next month, rose 22 cents at one stage on Friday though closed up 14 cents at $4.07.

The firm has two open mines and one underground in the South Island of New Zealand as well as joint mining and exploration licences in Australia.

Forsyth Barr analyst Andrew Harvey-Green says while the new mine adds to the firm's gold production, copper mining will push costs down.

He says it will go from being a high-cost gold producer at $US970 an ounce to one of the lowest at about $US600.

Mr Harvey-Green says says production of high grade ore at OceanaGold's Macraes Open Pit mine in Otago should lift production to reach 2012 full-year guidance of 230,000 to 250,000 ounces.

Forsyth Barr is predicting lower gold prices in the next year.