OceanaGold share price lifts 8% on gold production boost

a man wearing a gold shirt smiles widely as he is engulfed in a shower of gold confetti falling from the sky. representing a new gold discovery by ASX mining share OzAurum Resourcesa man wearing a gold shirt smiles widely as he is engulfed in a shower of gold confetti falling from the sky. representing a new gold discovery by ASX mining share OzAurum Resources

Shares in OceanaGold Corp (ASX: OGC) are up almost 8% in afternoon trade on Friday and are now trading at $3.43 apiece.

The OceanaGold share price has spent the entire day in the green after opening sharply higher alongside the company’s release of its quarterly update for the three months ending 31 March 2022.

The OceanaGold share price has climbed another 15% during the past month, continuing a three-month trend where shares thrust off a low of $2.07 in January.

OceanaGold bumps gold production

Key highlights for the quarter include:

What else happened last quarter for OceanaGold?

The company saw a 26% increase in gold production compared to the previous quarter. The gain also signifies a 61% increase when compared to Q1 FY21.

OceanaGold reported “record quarterly production” at the Haile Gold Mine in South Carolina and a “solid quarter of production” at Didipio Mine in the Philippines. This was partially offset by decreased production at the company’s Waihi operation in the North Island of New Zealand.

Specifically, Waihi produced 6,752 ounces of gold, a 56% year on year gain, but a simultaneous 43% drop compared to last quarter.

In addition, the company’s reported AISC was 18% lower than the last quarter and 14% lower when compared to Q1 FY21.

Sales of $285 million carried down to EBITDA of $158 million, representing 37% and 78% quarter on quarter gains respectively.

However, EBITDA was 155% higher year on year “related to resumption of operations at Didipio and increased gold prices”.

Management commentary

Speaking on the results, OceanaGold CEO Gerard Bond said:

OceanaGold has started the year strongly with the first quarter safely delivering record quarterly revenue and EBITDA and significant free cash flow.

This quarter’s performance was underpinned by record quarterly gold production at our Haile operation in the United States and a very strong first quarter of full production at our Didipio operations in the Philippines.

At Haile, we are continuing to see the benefits of operational and productivity improvements that began in mid2021. At Didipio, the operation achieved full underground mining rates at the end of the first quarter, ahead of schedule by nearly one quarter.

What’s next?

The company was able to restate its full-year consolidated guidance of 445,000–495,000 ounces of gold and 11,000–13,000 tonnes of copper. It hopes to realise these sales at an AISC of $1,275–$1,375 and cash costs between $675–$775 per ounce sold.

Adding further comments, CEO Bond said the company remained “focused on safely and responsibly delivering on our production guidance for 2022, maximising free cash flow generation and progressing the attractive growth options in our portfolio”.

OceanaGold share price snapshot

The OceanaGold share price has climbed 52% over the past 12 months and is up more than 47% for the year to date.

The post OceanaGold share price lifts 8% on gold production boost appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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