24 Jun 2013

Gold mine owner feels the pinch

10:04 am on 24 June 2013

As the price of gold continues to tumble, the Australian owner of New Zealand's largest gold mine is considering cutting capital spending and imposing a wage freeze on its workers.

The price of gold fell as far as $US1269 an ounce on Friday, its lowest level in more than two years and down from last September's record $US1895 an ounce.

OceanaGold operates the Macraes gold mine in Otago as well as the Reefton gold mine on the West Coast.

Its shares have been falling in line with the gold price and shed nearly 23% last week to $1.53. The shares peaked at $4.50 in November last year.

In the transcript of a company insight interview published on Friday, OceanaGold managing director Mick Wilkes said OceanaGold is reviewing its mine plans at Macraes and more particularly at Reefton in light of the falling gold price.

Mick Wilkes said the company is looking to minimise its capital spending as well as at wage freezes and is reviewing all discretionary spending to reduce its operating costs.

He said the company will update the market on Reefton within the next six weeks.