OceanaGold: good news from the mine [Archive] - Page 3

elZorro

24-12-2010, 09:18 AM

Thanks for your post, MM: just about finished at work for the year and some fishing and rest awaits..
Adamcz: I think that is the general conclusion from everyone, a bit disappointing for 2011. Some chatter on Stockhouse overnight about moving on to other shares in the meanwhile. Because there are plenty of stocks out there. If OGC has a valuation now of over a billion dollars, how much net profit should it produce a year? Would a 10% return be hoped for? It's not up to that, although it is doing a lot better than many businesses.

Here's the email I sent to Darren Klinck on 14th December. He replied promptly to my earlier email about updating the 'shares on issue' section of the website. The number had by that stage been updated. As to the second email, no reply yet.

Hello Darren,

Thanks for your reply. As you can understand, since I last emailed, shareholders have been given a swift lesson in how large companies raise funds.

That link to the website page is the correct one, and I have been looking at it every one or two working days. It's now at the correct figure, that happened sometime yesterday. I checked the value before I sent an email through the contacts page. So the person who should be updating that page is not doing so with any great regularity.

Similarly, it might be normal practice to update the reserves/resources table just once a year. Do all mining companies do this? If there are press releases during the year that obviously increase the table's figures, why not update the table? Retail investors tire easily if there is no data to talk about on forums. I have no doubt that these forums push the market around in between forays by bigger investors. So in effect, your policy means that serious investors have better pricing information, because instead of looking just at the chart, they do the fundamental research that the Oceanagold website makes difficult.

You can continue to compare OGC against its peers, and maybe it is undervalued, but we also need all the relevant information clearly posted on the site. While on this topic, I have to mention the 60% clause to the Philippine govt on the Didipio project. Yes, I could dig it up from the website, stuck inside a very long report. Nowhere else. Where is the filing to market advising the unannounced share issue recently? conveniently missing from the other filings, which are all more positive. Should the title of that web page be "Some of the market filings".

Perhaps the website could concentrate more on showcasing the NZ side of the operation, more images and video of the mines in action, the new exploration, the techniques being used, etc. As investors are looking for improved net profit figures in the quarterly books, show us the efforts in that direction first, which must be on the NZ side. These are some of the changes that would provide a better website. Is your current provider up to this task? OGC's site was their biggest project to date when it was done. It's not that elaborate or impressive.

I, for one, am worried about the business risk of the autoclave. Running on oxygen, with bricks/piping that could fail at any time, a limit on 24 hr production at the moment with lower grades, and I think the cost of part of the unique system was only $20mill. Why on earth isn't there another parallel plant being built?

Anyway, thank you for your time, I realise some of these questions are a bit trickier to reply to.

I wasn't really expecting a reply, as some of any answer would be inside information. I also realise that I'm nowhere near qualified to even ask the questions. But I do think Darren might be interested to hear what some investors are thinking.

It looks like the reserves /resources table will be updated in February. As it has a date on it of December, perhaps many were expecting an announcement before now.

So there is still a lot to look forward to, in particular, Reefton's prospectivity, with the possibility of some undiscovered rich seams that can be recovered with standard methods. OGC only needs a small percentage increase in the average grade going through the autoclave to make better profits there.

Seasons regards to all.

128,332 new shares have been issued to management (http://file.nzx.com/000/575/4492575.pdf)by 29th Dec, average price stumped up for these is about A$1.40. Total count now 262,062,610 shares, with another 5.6million unlisted still available for management.

Lots of companies on the ASX seem to be publishing their trading policies, must be a requirement.

elZorro

27-12-2010, 09:57 AM

Here's a 10-year old paper co-authored by Mark Cadzow (http://www.crownminerals.govt.nz/cms/pdf-library/minerals/cadzow.pdf), giving good detail on the original setup of the autoclave. There's a lot of ore-handling gear at the front of it, and a lot of refining processes afterwards. So all up, this must be a significant investment. It looks like very early on after commissioning, the staff discovered that three layers of bricks were not needed, and so just two layers were used. This allowed 14% more concentrate through the autoclave. Any part of this complex chain could be providing a limit on production. I'd guess that if any plant stopped or failed, it would have an immediate effect on output for the day.

elZorro

10-01-2011, 01:46 PM

Back to the grind for awhile: anything to report on OGC anyone else?

This latest blip downwards has partly to do with the gold price, partly new shares issued (small effect) and general disappointment in Canada over the higher recovery cost. Maybe what we are seeing is that the gold price is an indicator (in turn) of energy prices (it costs a lot of energy to extract). In terms of the EZ equation, the TSX price of CAN $3.18 (Friday finish) is a full 35% discount on the old rate, so it's hard to see it dropping any lower unless gold continues down. Towards the end of this month, or start of February, the new updated resources table will be posted on the OGC site. Unlikely the numbers will be going backwards, it should be quite the opposite. Perhaps we should watch out for larger buying parcels before the date, maybe the bigger players will jump back in. If so, I'll be doing the same.

TSX overnight, a near 2% lift for OGC, low volume. Here's an upbeat report on gold explorers in NZ:

More companies to show interest in NZ gold scene

Simon Hartley — 5 January 2011

Australia's resources sector has re-gathered momentum, coming out of the global financial crisis, and New Zealand's is similarly showing signs of recovery, but it has not been an easy road.
While small-scale operators were buoyed by a stellar gold price, making small claims commercially viable, larger companies were still contending with a credit and investment squeeze at the tail-end of the financial crisis.
Craigs Investment Partners broker Peter McIntyre said Australian interest in New Zealand was likely to be heightened in 2011, with NZ miners looking to extend their “life of mine”, by bringing on board new partners.
“You're likely to be seeing more joint ventures in New Zealand in 2011, both Australians and other internationals, because of accessibility, ease of business and historical data to hand," he said.
While NZ has “an abundance of resources”, in coal seam gas, gold, iron sands, hard coking coal and lignite, New Zealand operations do not have the local capital backing; as shown by both OceanaGold Corporation and Glass Earth Gold raising capital on the Toronto and Australian stock exchanges.
Glass Earth is a junior explorer with modest gold production while Oceana is NZ's largest gold producer and third biggest when measured against Australian companies.
At this year's New Zealand branch conference of the Australasian Institute of Mining and Metallurgy (AusIMM), L&M Energy and Glass Earth Gold outlined their respective advances in coal seam gas and gold exploration and production.
Between Glass Earth and L&M, the pair and their subsidiaries have spent more than $55 million, mainly on southern prospects, during the past decade.
However, Glass Earth chief executive Simon Henderson, who has spent 60 weeks travelling overseas raising capital for the project during the past five years, painted a tough survival story of “doing the hard yards during the global financial crisis.”
Glass Earth's cash-burn during exploration has been more than $25 M so far, with limited cash-flow. Then during the financial crisis, with a share price slumping from 20c to 1.5c, cash was dwindling and the company had to be restructured and otherwise “on short rations.”
Glass Earth had to move from explorer to gold producer, with almost 1,000 ounces coming out of its McAdies prospect in the Ida Valley for the year to date. Henderson expected a total 7,500 oz from McAdies in the coming year - which at +$US1,300/oz would equate to more than $US9 M.
Peter McIntyre said time remained Glass Earth's biggest problem because of the “cash burn” involved, and after spending more than $25 M it was “time to get runs on the board and produce cash flows", with its “exciting prospects” in Central Otago and on the Coromandel Peninsula well positioned to underpin future funding.
Henderson's persistence is paying off in the North Island, in a 65%:35% joint venture with Newmont on the WPK West prospect, north of Waihi which Henderson estimates could yield 500,000 to 1 million ounces over time.
After his presentation at the AusIMM New Zealand Minerals Conference, Henderson said Otago exploration plans would not suffer from the Waihi venture, which was largely being overseen by Newmont and it remained “business as usual” on the South Island.
Gold, which appreciated in value about 20% in 2010 and almost 80% in the past three years from $US794 to $1,427/oz in December, offers investors no interest rate and relies on more speculators coming on board.
Almost on a weekly basis during 2010, new records were hit on either the London Metals Exchange or Comex division of the New York Stock Exchange as spooked investors and funds repeatedly returned to gold, following ongoing doses of sour economic news alternating between the US and Europe.
OceanaGold (ASX, NZX & TSX: OGC), which posted a record delivery of 300,391 oz in 2009, was back on track after it stumbled during the GFC and had to mothball its gold-copper development mine in the northern Philippines, following a cost blowout doubling to US320 million, then suffering from lack of outside investment interest.
Last year marked provided Oceana with a recovery and record share price at $5.41
Craig Partners’ Peter McIntyre described Oceana's recovery as “one of the most unparalleled success stories globally", considering its shares had risen from a “desperate” 22c to more than $5.40, and now had a market valuation of more than $1 billion.
Oceana had extracted itself from onerous and costly hedge book obligations, while at the same time worked hard to keep production costs down.
“De-hedging allowed it to take [increased profits] from record spot prices, and it also raised funds at a time of [global funding] constraint," he said.
Following the loss of two chief executives in a 16-month period, Oceana was upbeat that its gold-copper development in the northern Philippines will be in production by 2013, boosting annual gold equivalent production well beyond 300,000 oz.
Oceana ended 2010 with estimated gold reserves in NZ of 1.94 M oz, with the Philippines forecast to contribute a further 1.41 M oz of gold and 170,000 tonnes of copper.
At the AusIMM conference, Oceana's vice-president of corporate and investor relations Darren Klinck said the company had spent about $12 M on exploration in the past year and expected to maintain a similar level in the year ahead, about half of which would be committed to its Reefton operations.
*Simon Hartley is a senior business reporter for the Otago Daily Times.

Phaedrus

11-01-2011, 11:02 AM

http://i602.photobucket.com/albums/tt102/PhaedrusPB/OGCau111.gif

elZorro

11-01-2011, 09:14 PM

Hello Phaedrus, yes, maybe we should have sold our OGC shares in mid September. We have covered that point. But can you now be sure that OGC will continue to trend down? FA work suggests the trend will be positive soon, and in any case OGC's SP should not sensibly go any lower compared to gold.

The new CEO, Mick Wilkes will be with the company in mid January. Mick has been a key player at Prominent Hill, which is the new cash cow for OZ Minerals (OZL). OZL has a market cap of over 5bill AUD, cash in the bank of over 1.2 billion, and is debt free. The latest report is here (http://www.ozminerals.com/Media/docs/ASX_20101123_RetailSHolderBriefing-cdcdbe4d-8f45-4d05-8f91-1a29ada122be-0.pdf): OZL is not even producing as much gold as OGC, but seems to be a lot better at generating net profit (they own good portions of other gold miners). OZL has outperformed OGC over the last 6 months, but certainly not for the last 2 years, or even 12 months.

OZL are looking at M&A options, and have warmly congratulated Mick on his new position. Mick was previously based in Melbourne, so not too far to go to the new office.

Volume on the TSX continues to pick up, two parcels of 100k shares sold with the price unchanged overnight, with bigger parcels the day before. Cormark Securities (http://www.cormark.com/SubPages/OurServices/Research.jsp), a decent sized firm based in Canada, recommended OGC as a Buy to their clients on 30th November 2010. The share responded in Aussie a day or two later. Target price in 12 months was CAN$6.00, which was reduced to CAN$5.50 on 24th Dec 2010. Cormark have been involved in helping OGC obtain funds from the market however, helping with the $115mill capital raising which was announced to shareholders as a done deal.

elZorro

16-01-2011, 11:33 PM

OGC looks a bit cheaper for the start of this week. If gold holds its price, I'd expect OGC to start a steady ramp up until the end of January at least... IMHO DYOR...etc
Why? The new reserves/resources table will have some larger figures in it from late January/early February 2011 (it was updated in mid January last year). I'd expect the new CEO to announce all this. Oceanagold have also chosen a new gold price, US$950 instead of US$800 for the NZ operations. They are not lowering the gold grade cutoff levels, presumably as fuel and labour costs are increasing also. At least they're bringing in more gear to move more overburden, on both mining areas. Just a shame the unique autoclave plant places a limit on the gold recovered. But we'll soon see how good the new brownfields exploration sites are. I'm particularly hopeful about the Reefton ones, as they should be higher grades, which in turn will help recovery volumes.

In any case, OGC's price needs to be a bit higher, to stave off takeover offers. There aren't many miners at this production level with an MCap around 1 Billion.

Monday: See how good a prediction that was? OGC price drops even further, to NZ$4.10, to match the TSX price. You'd have to think it's a bargain with gold at $1360, this is about a 38% discount to the old EZ equation.

Vtrader

17-01-2011, 09:36 PM

elZorro,
Agree with the probabilities for additional reserves and upside when announced.
POG being the prime driver looks like...
http://i949.photobucket.com/albums/ad333/VtraderNZ/au0182nybjan2011.gif
POG could turn about USD$1330 at EWT4, or if there is not support at this level then a possible to fall to USD$1240 at EWT2.
Should this be a pure ABC correction (where A=C) then USD$1330 is likely. Now we just have to find a suitable news story to justify the turn when it occurs. My EWT count since August is 1,2,3,4,(1,2,3,4,5)=5 or simple waves 1 and 3, and an extended wave 5 (in this instance extended volatility)
So if POG falls to USD$1330 AND OGC release positive news at same time, then... lets wait and see.
V.

elZorro

18-01-2011, 07:37 AM

Vtrader - maybe OGC's shareprice is not completely dependent on no. of shares and the US gold price: it has dropped 7% overnight and gold has stayed constant.

Here's why:

Philippine rights body wants OceanaGold deal revoked

Mon Jan 17, 2011 10:50am GMT

MANILA Jan 17 (Reuters) - The Philippines' human rights commission said the government should consider withdrawing OceanaGold Ltd's rights to a mining project because the Australian miner had violated rights of indigenous people.
Leo Jasareno, acting director of the Mines and Geosciences Bureau (MGB), told Reuters he had not yet seen the recommendations, but the bureau would have to look into them.
"If there is such a recommendation by the Commission on Human Rights, then the MGB is duty-bound to open an investigation and find out if there is ground," he said in a text message.
The Didipio mine, with a reserve life of 20 years, holds 1.41 million ounces of gold and 169,400 tonnes of copper, based on a report released last year by OceanaGold, Australia's fourth-largest listed gold miner.
OceanaGold planned to start operations at the project in the northern province of Nueva Vizcaya in 2013. It is due to restart construction work this year, with the initial cost estimated at $140 million over four to five years.
The government sees mining as a sector with great potential to attract foreign investors and generate jobs in the poor South East Asian nation, but has run into some obstacles.
Two provinces have banned types of mining activity, including a ban on open pit mining in South Cotabato that could jeopardise the country's biggest mining project, the $5.2 billion Tampakan project majority owned by Xstrata Plc .
In a statement on Monday, Loretta Ann Rosales, head of the human rights commission, said they found OceanaGold had violated indigenous people's right to adequate housing, freedom of movement and to manifest their culture and identity.
Officials from OceanaGold Philippines Inc were not immediately available for comment.
Rosales said civil and political rights were often sacrificed in the effort to lure in investments to fuel growth and development.
"Nothing compares, however, to the sufferings endured by the indigenous peoples in whose community lands these projects are made to be located," Rosales said. "They lose their homes, livelihood and property."
OceanaGold halted construction in late 2008 after spending $80 million due to high cost estimates, initially set at $320 million.
During the initial construction, there were protests by the indigenous community, supported by the local government and church leaders, after nearly 200 houses were demolished.
(Reporting by Manny Mogato; Editing by John Mair)
© Thomson Reuters 2011 All rights reserved

Mistymountain, this is why I have been generally lukewarm about Didipio, because I had found this issue during internet searches. I'm fairly certain that the above article is only one side of the story, however. OGC has paid for an active medical program helping locals for the last few years, and has helped with other community initiatives.

It's possible the houses were squatting on OGC land, but it's still not a good look. I think the residents of those houses worked the Didipio Valley as subsistence farmers. It might have been a cunning plan, in retrospect, for OGC to buy some land somewhere else and relocate those people. As it is, if the mine goes ahead it will employ mostly Philippinos, and they will build a large complex to house the workers, as the mine is off the beaten track. 60% of the profit will end up with the government as well.

So there's a good chance that this is a golden opportunity to buy some OGC at a bargain - or not.

Note that trading on the TSX recovered in both volume and price during the second half. Equivalent of NZ$3.83 on the close. Some bigger players buying in bulk. But what will the Aussies do today? Normally they are sceptical of this share.

elZorro

19-01-2011, 08:15 AM

OGC is holding its own on the TSX, but some medium-term retail bloggers on Stockhouse admit they've sold all their OGC shares and are looking elsewhere for upside. Some had assumed that any local issues at Didipio had been sorted, and were disappointed. I found this 2008 article in an internet search, from the other side of the story. It's very interesting.

OceanaGold starting to shine

Kevin Andrusiak
From: The Australian (http://www.theaustralian.com.au/)
April 07, 2008 12:00AM
ONE of his security guards recently shot dead a local and there are several powerful non-government organisations campaigning against the Didipio mine, but OceanaGold chairman Jim Askew is not giving ground in his determination to crack the complex but potentially very profitable Philippines mining puzzle.

If Melbourne-based OceanaGold can bring the mine along the tricky path to development, it will put the company on course to become one of just a handful on the Australian share market that can boast of an eventual annual production rate of 500,000 ounces of gold.

Just as important, it would give the mid-tier miner a significant first-mover advantage in
the Philippines, a nation still very wary when it comes to mining, after several damning environmental incidents in the past.

It has not been easy for Askew and his team, which includes former Barrick Gold senior executive Steve Orr.

And it has been just as rocky a ride for the OceanaGold faithful, who had to endure a difficult 2007 production-wise and have seen their company weighed down by a raft of adverse publicity.

The chief protagonist has been Oxfam, which accused the company of bribing the locals, amongst other things, into accepting the go-ahead for development of Didipio, 270km north of Manila on the island of Luzon.

The recent shooting of a local has again thrown the company into the spotlight -- and into an arena where so many Australian companies have failed in the past -- Asia's rich, untapped bounty of minerals.

"It's been a very difficult road," Askew told The Australian. "But we want this company to be a stepping stone for the country to rebuild its mining industry. This project cannot be denied in terms of its economic impact."

At the moment, investigators are interviewing those involved in the shooting and OceanaGold has declined to comment until that job is finished and a report produced. The worst outcome for the company would be for the investigators to conclude that it had hired someone who was not properly trained to use a gun.

That would no doubt set off a new round of accusations by those opposed to the mine, which is slated to begin production by June next year before ramping up to a production rate of about 5000-6000 tonnes of copper/gold concentrate a month.

Askew still refuses to engage Oxfam, fearing it would give the group too much oxygen. His dealings with the organisation go back to when he headed Climax, which was taken over by OceanaGold in November 2006, giving it access to Didipio.

Chief executive Orr, on the other hand, says Oxfam's accusations have been very frustrating, especially for the majority in the community around Didipio who have welcomed the project and the potential to improve their impoverished conditions.

"We do talk to Oxfam, but what's noisier is the negatives we keep hearing," he said.

"In order for us to maintain our credibility we need to be very transparent in everything we do. We would ruin our credibility with the others if we increase our offer for those who remain to move out of their homes. It's not the way we are conducting our business (which has upset opponents), it is the business we are conducting."

OceanaGold maintains there are only a few dissident villagers that it wants to move to make way for a tailings dam. The company has offered to pay $US10,000 ($10,850) a hectare to those who need to move, which is about 50 per cent above an assessment of the land by the Philippines tax office.

Askew says those who remain are squatters and have no legal ownership of the land. Still, OceanaGold's offer to pay $US10,000 a hectare and build all families new homes away from the mine remains on the table.

That's a handsome sum in a country where the minimum wage is $US5 a day, but Oxfam maintains it is not about the cash. It says its involvement is at the behest of the community around the mine who fear it would endanger their health and rob them of their agrarian lifestyles.

Privately, there are many who suspect that those holding out against the company want more money. Orr insists the company will not budge on its offer.

Philippine environment and natural resources minister Lito Otienza says all the country asks from OceanaGold is that it do its mining in the most responsible way.

"The objectives of some have been addressed squarely," Otienza said at a company function. "The take-off point, we expect, for the mining operation is this year." The OceanaGold shareholders certainly hope he is right. The company faithful were warned that 2007 would be a lean year.

OceanaGold's New Zealand assets were struggling and things only got back on track when better-grade ore was finally reached at the Macraes operation on the South Island near Dunedin in the fourth quarter.

The fledgling Reefton operation was also hampered by mill problems, but showed promise in the fourth quarter.

The company told its big institutional investors on a recent site visit that its problems in New Zealand were well behind them and shareholders should look forward to greater contribution to earnings.

In 2008, shareholders have been told that total production from both Reefton and Macraes should be at least 50 per cent higher and up to 300,000 ounces would be produced.

Cash costs will be around $US450 an ounce by the end of the year -- down from $US556 an ounce in 2007 -- and only 206,000 ounces should be on the hedge book with an average cost of $NZ773 an ounce.

But while shareholders are welcoming better performance on the costs and production front, their focus is squarely on Didipio, which OceanaGold hopes to have commissioned by the end of June, 2009. At 120,000 ounces production a year, it will be the biggest gold mine in the Philippines.

Before then, however, they are nervously awaiting an upgrade to the forecast capital expenditure which currently stands at $US155 million, but is also about 12 months old.

Those who paid $3.50 per OceanaGold share in July last year to fund working capital at Didipio will be concerned about any cost blow-outs. Since then, the share price has dived by around a third, despite the rising gold price.

The obvious expectation is that a revised figure will be around $US200 million and OceanaGold will have to go cap in hand to the market to raise more money, with predictions around the $US80 million mark.

But the company points to the fact that the project was originally given the stamp of approval with a gold price of $US500 an ounce factored in and copper at $US1.90 a pound.

"It won't be one of those doubling or tripling of costs announcements," Orr says. "We have some very good options that we are considering that won't be dilutive."

One of those options would be to hedge the copper concentrate, given that the likes of Glencore are very keen to get their hands on the product for blending purposes, given its quality.

The company says it is on track or only marginally behind on the construction timetable, but there are no flags coming up in regards to access to key items. An updated resource should also come in the next few months.

The Philippines is a very complex place to mine, Orr says.

"It is one of the more minerally blessed places in the world.

"We've proved we can build mines. What we will achieve over time is that mining makes a huge contribution to not only the government, but also to local communities."

It was around this time buildings were cleared, fences were erected, and an OGC security contractor was killed. All messy goings on, but it does look like the company did make fair and reasonable offers to the indigenous people, on the basis of agricultural land value, and an offer to rehouse. I'm not sure who had actual title to the land before all this took place. OGC spent money building a new road(s) for the mine, which the villagers then wanted to use to transport produce to the market. When conditions were naturally placed on that use, they then argued their rights to travel over their local ground was being interrupted.

It sounds like most locals accepted the offer, and that of about 200 dwellings or houses, only a few families did not accept the compensation. Their houses were still removed, so I'd assume that OGC owned the land titles already.

It was after this date that OGC went on a big slide for the rest of the year and had a market cap of about $50 million before Christmas. That was a ridiculous value, and why some huge volume was seen buying OGC shares at its low, to reap a 20 bagger return when it hit the highest point a year and a bit later.

TA people will tell you to sell OGC now, it's trending down. Cue Phaedrus, Skol etc. If enough of us listen to this advice, it will certainly do that, and when the local issues at Didipio are sorted (as I'm hopeful they will be), TA trainspotters will advise us to climb back on board. Some very quick action by those in charge at OGC could avert all this churn of shareholders, and it would be a baptism of fire for Mick Wilkes.

mistymountain

19-01-2011, 09:16 AM

Thanks EZ for that great detective work and thoughtful analysis too in the last two posts.

I agree entirely with your sentiments and recognise some short term trading options may benefit the TA investors. I'll continue to hold through 2011.

Phaedrus

19-01-2011, 09:22 AM

OGC is holding its own on the TSX'Fraid not, EZ. This Toronto Stock Exchange chart compares the performance of OGC with that of the TX Index. No contest!

http://i602.photobucket.com/albums/tt102/PhaedrusPB/OGCsp119.gif

TA people will tell you to sell OGC now, it's trending down. No they won't, EZ - the OGC Sell signals all triggered back in September. Sure, OGC is trending down now, but that is NOT the time to buy. You don't want to buy (or hold) down-trending stocks - remember?

TA people will tell you to sell OGC now, it's trending down. Cue Phaedrus, Skol etc. If enough of us listen to this advice, it will certainly do thatThat's very flattering, EZ, but I am afraid the reality is that Skol and I do not lead world markets. We merely follow them. Closely.

elZorro

19-01-2011, 11:24 AM

Phaedrus, that's a bit of an overreaction (al la Jim Carrey).

I realise that the TSX and the ASX traders will mess around with OGC, nothing we say in NZ will have any effect. But while FA research says that OGC will dig itself out of this PR issue, the market will be doing their TA graphs and worrying about 10% stop losses, and the shareprice will drop. The next time OGC wants some investment cash, it'll need to issue extra shares, also not helping, with more share dilution.

But all this while, the business fundamentals of OGC's trading cashflow will be fairly constant.

Hoop

19-01-2011, 12:51 PM

ELZ...your TA knowledge is totally misguided. Lets get things into perspective ...

TA does not create self -fulfilling prophecies.
It does not cause markets to drop****...its the greed/fear emotional factors and the price/demand/supply mechanical factors that get out of sync with the " exact normal behaviour" that cause rises or falls.

ELZ..The market is always right on any given day ..don't fight it ..the trend is your friend.... so instead of burying your head into the sand and blame TA... be creative and use these significant swings to your advantage.
TA are tools that measure the history of the stock up until the exact "now" it does not foretell the future because it can not measure something that hasn't happened yet.

****ELZ ..think of a barometer being a TA instrument

Tapping a barometer and see it fall does not cause that lousy weather outside to happen..it is the lousy weather outside that causes the barometer to fall. ...Also a barometer doesn't tell you what it's measurement is going to be tommorrow or the next day because it too can't predict the future. However we can use our human logic to draw trend lines and from history know that that barometer never goes above or below certain limits ( A bit like like Support & Resistance points ..eh?)

elZorro

19-01-2011, 01:31 PM

Thanks for the analogy Hoop, and fair enough. I have sold some OGC today to invest elsewhere, as I think I'll be able to buy it back cheaper in a day or three. Crazy, but there you go.

I think TA could be useful too, but one thing about it bugs me. Some practitioners take great delight in pointing out exactly what day others should have bought or sold a share to maximise their return. It's really easy to do a retrospective chart for that, but I can't help thinking that if you made these expensive decisions in real time, how often would they work out? It's not going to be 100% of the time. I agree it would probably improve the odds of a good decision.

Some shares surely, are too lightly traded to use TA theory on. Yet these can be the multi-baggers. There, a bit of FA work might be more useful.

mistymountain

19-01-2011, 03:24 PM

elZorro

20-01-2011, 12:29 PM

To me TA is great for those who are keen to actively manage portfolio on a day / week / month basis. FA if you're more a sit on fence and watch the proceedings happen.

I've been a FA with OGC throughout and am gritting teeth at moment, knuckles white, waiting for the SP rollercoaster to roll back up. I believe through FA this will happen for OGC... Too many positives on the ledger. The more the SP drops the better the buying op.

Yes, that sounds about right MM. On Stockhouse, a poster has phoned OGC to talk about Didipio, they're not worried, everything in hand. He/she urged them to put out a press release to that effect. By my reckoning they've had about 2 years to compile one. But none has appeared, has it.

As Basil would say "Don't mention ze voor"

OK, so maybe I was a bit hasty about that :blush: a release to the market came out a few minutes ago.

GENERAL: OGC: OceanaGold Corporate Update
03:16p.m.OGC 20/01/2011 15:16
GENERAL REL: 1516 HRS OceanaGold Corporation GENERAL: OGC: OceanaGold Corporate Update OCEANAGOLD CORPORATE UPDATE (MELBOURNE)
OceanaGold Corporation (ASX: OGC, TSX: OGC, NZX: OGC) ("the Company") wishes to provide a corporate update relating to various media reports in recent days regarding community issues associated with the Didipio Project in Northern Luzon, Philippines. The Company has been made aware that the Commission on Human Rights of the Philippines ("CHR") has released a resolution in response to certain allegations made against the Company in 2008/2009. The Company is concerned that it has not been formally notified by the CHR office, yet it would however appear that this report has been made available to certain interest groups and media outlets in the Philippines.

OceanaGold is fully committed to the development of the Didipio Project. The Company continues to maintain its obligations under the leasehold agreement (Financial and Technical Assistance Agreement) and is operating in accordance with the Philippine Mining Act in partnership with the Philippine Government and with local community stakeholders. The Company is compliant with all the laws and regulations associated with operating as a foreign company in the Philippines and is committed to ethical, responsible and sustainable mineral development. The Company is actively involved in a number of community and humanitarian programs in the local communities situated near the Didipio Project with particular efforts in health and medicine, clean water provision, education, reforestation and environment, community development and infrastructure.

The company insists it has met, and is committed to continuing to meet, the human rights of the local community. OceanaGold CEO, Mick Wilkes stated "The Company is firmly committed to building strong and enduring relationships with our community in the development and ongoing operations of the Didipio Project for the benefit of all stakeholders." OceanaGold has commenced pre-construction activities on the Didipio Project, with detailed engineering design of infrastructure and the process plant now underway. Additionally, key members of the project management and construction team are now in place. The Didipio Project is fully financed, has the necessary permits and is on schedule to achieve commercial production in Q1 2013. End CA:00204733 For:OGC Type:GENERAL Time:2011-01-20 15:16:25

elZorro

21-01-2011, 08:22 PM

Political agenda in Philippines irks Oceana
Simon Hartley — 21 January 2011

OceanaGold Corporation has rejected allegations that it has fallen foul of the Commission on Human Rights in the Philippines at its developing gold and copper mine in Northern Luzon.
Work started more than two years ago at the mine but was it was mothballed shortly after, until work resumed recently with the target to be producing gold and copper by early-2013.
OceanaGold chief executive Mick Wilkes issued a statement yesterday, prompted by media reports in the Philippines this week. Oceana “insists it has met, and is committed to continuing to meet, the human rights of the local community” -- the indigenous people living adjacent to the Didipio mine site.
The Inquirer newspaper in the Philippines, filed a story on-line on Tuesday from Manila, which said “an anti-mining network had lauded the Commission on Human Rights for recommending the cancellation of the mining permit", held by OceanaGold and covering Didipio.
The Inquirer story went on to report claims OceanaGold had “illegally demolished about 200 houses in the community in 2008 and violated the indigenous peoples property rights.”
Wilkes yesterday emphasised OceanaGold had not been formally notified by the Commission on Human Rights whose “report has been made available to certain interest groups and media outlets in the Philippines.”
OceanaGold was “actively involved” in numerous community and humanitarian programmes in the local communities near Didipio, “with particular efforts in health and medicine, clean water provision, education, reforestation and environment, community development and infra structure,” he said.
Craigs Investment Partner Peter McIntyre said the news appeared to be a negative for OceanaGold, and reflected the political risk any mining company exposes itself to “when it begins operations outside of familiar territory.”
“This [allegation and recommendation] is an impediment and could be detrimental to OceanaGold,” McIntyre said.
Wilkes said the company had maintained its obligations under its lease-hold agreement, was operating in accordance with the Philippine Mining Act in partnership with the Philippine Government and with local community stakeholders.
The Inquirer reported the indigenous people, represented by the Didipio Earth Savers Association, and supported by various sectors, including the local governments, the Catholic Church, human rights groups and academics, have stood firm on their decision to oppose large-scale mining for more than a decade.
This is the third time since mid-2007 that Oceana has become embroiled in claims and counter-claims surrounding Didipio's development, which have surfaced in the Philippine and later in Australia media outlets.
Wilkes said: “The company is compliant with all the laws and regulations associated with operating as a foreign company in the Philippines and is committed to ethical, responsible and sustainable mineral development.”
*Simon Hartley is a senior business reporter for the Otago Daily Times.

News associated with companies mentioned in this article

OceanaGold Corporation (71 articles) (http://nzresources.com/companyarticles.aspx?id=92)

Copyright © 2009-2011, Silver Budgie Pty Ltd.

The only bit of new information here for me, is that the mining permit land appears to be leasehold. Bad press has surfaced three times, and nowhere do we have an actual event timetable/record to refute what is being said by some locals. Probably too sensitive to publish anyway.

I'm also wondering if the Didipio imperative is what leads to CEO turnover. Mr Askew certainly seems keen on seeing Didipio through, no matter what. He was involved in this mine way back with Climax Mining. If OGC has been looking after the locals, it would be good to hear their input for some balance.

The gold price appears to be holding at US$1340 or so, OGC still dropping a bit, so now it's more like a 50% discount on the old EZ equation (divide the result by 1.50, so not as bad as it looks). 35% is simply 35% more shares issued or due to be issued, the other 15% is doubts over Didipio, lower grades and recovered ounces.

OGC against US$ gold still shows this linkage strongly. (http://www.infomine.com/ChartsAndData/ChartBuilder.aspx?gf=110575.USD.oz|112355.CAD.&df=20100121&dt=20110121)

geezy

22-01-2011, 02:44 PM

i read in the ann that production @ Didipio to commence in 2013! things must be moving down there.

elZorro

23-01-2011, 11:02 AM

i read in the ann that production @ Didipio to commence in 2013! things must be moving down there.

Hi Geezy, yes there must be more activity, and OGC now states it has enough cash to get the mine going. Don't forget that when it does start up (if allowed), then some return will always go to a few local stakeholders. For the first few years (up to a time-limit) OGC is allowed to get the rest of the profit made, to pay off their capital investment. Once that is paid off, or the time allowed expires, the Philippine Govt will receive 60% of any net profits by way of various taxes, royalties and levies. It's all in the back pages of the detailed mining plan.

None of us have a guarantee that the POG will stay at these relatively benign higher levels for the next few years, allowing previously uneconomic ore to be processed, especially here in NZ. Is this not the time when OGC should be doing all it can to boost production in NZ? They are moving in that direction, and maybe we'll see some detail about that in the new resources report, which should appear within 2 weeks.

Let's assume the resources table gets a boost. There might even be other press releases around the same time. This should rekindle buying interest in OGC, and you'd expect a bit of price improvement. At the moment the share price looks fairly low, if you have the opinion that gold will at least hold its price. To keep any price increase in the medium term, OGC will need to do more than point out more reserves in the ground. Shareholders want to see quarterly profit swamping out any smaller issues like increased fuel and electricity costs.

We all have that problem. That's why we've invested with OGC, to make a bit extra to cover that :cool:

Phaedrus

23-01-2011, 11:51 AM

elZorro

24-01-2011, 07:41 AM

There has been some discussion on the gold thread on the use of 200 day Moving Averages. Here we apply one directly to a gold stock, OGC. 200 day Moving Averages are often used by conservative investors to keep them on the right side of major trends. With such a slow indicator, you will always be late entering and late exiting, but for those that have no interest in active trading, such a simple indicator can be surprisingly effective, knocking the socks off blindly "buying and holding". The OGC chart provides an excellent illustration of the use of this indicator.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/OGC123.gif

Use of this long-term MA would have had conservative investors buying OGC at 63 cents and selling at around $3.25 22 months later. Of course, more active investors would have bought much lower, and sold much higher, but active trend following would have entailed 2 or 3 trades over 2 years and not everyone wants to trade that "frequently". It is easy to see the actions of more active market participants - the many tall green volume bars in early 2009 show very heavy buying activity and tall red volume bars show heavy selling. Didn't they do well?

There are a few other points worth noting here. It is easy to see the "Price/Volume Climax" of September 2010. These commonly mark significant turning points and that was certainly the case here. Note too how most every "important" peak was marked by a Bearish RSI divergence. These generally provide excellent Sell signals, especially when combined with other indicators such as trendline-breaks etc.

Thanks Phaedrus: yes, the big buyers and sellers did do very well off OGC. There were others like Baker Steel who exited even earlier, and in retrospect this was most likely triggered by the murmurings of management about firing up the Didipio project again. They hopped in when Didipio was mothballed, out when there was going to be some serious capital raising based on the improved shareprice. OGC gets no cash out of traders making capital gains, and they have shown that they're not able to post large net profits.

On the plus side, I noted from your RSI graph that OGC has not normally paused at a very low RSI, but conversely the last time OGC droopped past the 200 day MA, it went well down for quite a while. So that will only happen if market sentiment is very poor towards OGC. There are some fairly strident posts on Stockhouse now, the latest idea from a poster being to sell Didipio to a Philippino outfit, before it gets too ugly. Certainly OGC will need to show that it has the best intentions for this mine and the locals, and considering the smallish output of gold, (the big positive being the copper credits), but 60% of profits staying in the Philippines already, shareholders are starting to wonder why?? are OGC management pushing this barrow again.

And by the way, when we see a proper 'shares on issue' table, more of the true details about Didipio, and prompt press releases on a revamped website, we'll know they're starting to look after shareholder's interests even better.

Vtrader

25-01-2011, 09:36 PM

POG at resistance level USD$1330, up or down?
My prediction is that OGC will hold the pending news release as long as possible supposing the POG turns favourably.
V.

elZorro

26-01-2011, 07:58 AM

Hi Vtrader, the gold price could just be seasonal weakness, it happened last year in Jan-Feb. There has been some institutional buying of OGC spotted in Canada, if that is any indication then we may be near the low for the meantime. Perhaps it's best if we buy and sell with the big guys. If we were flies on the wall of the OGC boardroom, what would we observe? Couldn't resist posting this absolute conjecture, what do you think?

Jim and Mick in charge. (http://www.xtranormal.com/watch/8290061)

Just found this, might help with profit margins.

OceanaGold takes full control of mining at Reefton

Tuesday 25th January 2011

OceanaGold is to take full control of mining at its Reefton Gold Mine from April 1, and says there will be a significant increase in mining operations at Reefton, 79km northeast of Greymouth, this year.
It was assuming mining operations from Stracon Mining, which had been operating and maintaining OceanaGold's mining equipment fleet under an agreement at the operation since mining started in 2006, OceanaGold said today.
Chief operating officer Mark Cadzow said the company believed it could unlock more value at Reefton and operate it more efficiently.
"2011 will see a significant increase in our mining operations at Reefton and the timing is right to take the mine forward on an owner miner basis," Cadzow said.
OceanaGold moved to owner mining at the Frasers Underground mine at Macraes, Otago, last July.

NZPA

OB Research has recently put OGC on HOLD rating, however:

OceanaGold - Great Value and Growth

We bought OceanaGold as a turnaround story at 40 cents and the stock has almost increased tenfold since then. We believe it is still undervalued compared to other gold companies with a production in the range of 250-300,000 ounces . As the company's great project in the Philippines, Didipio, moves closer to production and also considering the potential for large new discoveries in the surrounding land package, the stock should be able to provide us with at least another double. Didipio will eventually increase the company's production to 360,000 ounces and reduce cash costs through larger copper credits. Comparing the future cash cost to peers we estimate OGC to be in the lowest quartile, once full production at Dipidio is a fact. Read more about OceanaGold in our latest research report.

On January 12th 2011, we sent out the following in a newsletter to our subscribers:

Since our last update on OceanaGold new information has been made public by the company.

The company's new guidance for 2011 indicates approximately 10% lower production and over 10% higher cash cost compared to our previous estimates. As we have predicted, the company also points to the fact that Didipio, through negative cash cost, is expected to improve these numbers. This is however not until 2013 or almost two years away.

On the bright side, the lower production and higher cash cost is most likely due to the company lowering its cut off grade which will mean a longer minelife for New Zealand.

Summarizing all this means that we no longer believe that OceanaGold will substantially outperform its peers in 2011, and therefore we lower our target price to C$ 4.20 until the end of 2011. We also change our recommendation to Hold.

We still like the company and believe in its capable management and will therefore continue to monitor it closely and might very well in the future return with an upgrade when we feel the time is right to again overweight OceanaGold.

I wonder how much effect this changed recommendation had on the share. Have a look at the shareprice on the TSX, it had rebounded after a large block of shares sold earlier in the month, then glided down from the 12th January onwards. Except overnight (25 January), it finally paused and was 'back in the black'. Volume up a bit as well. Phaedrus might tear me to shreds on this, and if I didn't know that the resources table must be updated soon, I wouldn't be so interested. Note that Reefton's mining is set to increase. Could be some big pockets of gold over there, and the average grade is better. That's what is required in the short term.

Note on 27th Jan: the frame below was taken before close of trading on the TSX for 25th Jan, it ended up slightly lower. Still trading there now, and although volume is smaller, almost all of it at the moment is 300K of shares (CAN $780,000 or so) bought at the day's low.

OGC starting to move solidly up! These were the TSX short positions and history as at 15th Jan. (http://tmx.quotemedia.com/article.php?newsid=37676535&qm_symbol=OGC) This press release was followed a few hours later by the one about Didipio not being a problem. Looks like you really can make money out of OGC, no matter what is going on ;).

elZorro

27-01-2011, 02:51 PM

Interesting background on OGC (http://www.bullionbullscanada.com/index.php?option=com_kunena&func=view&id=236&catid=7&Itemid=122), power requirements and power stability for mines can have a huge effect on their shareprice.

I did think today was turnaround day..

elZorro

28-01-2011, 11:07 AM

I'll just get in first.. never buy shares in a downtrend.:( Unfortunately for me, gold is sliding, taking OGC with it. There are still big buys going through at the lowest part of the day on the TSX. The ASX finished yesterday at the same price the TSX stopped at, the night before. If gold stays where it is, it'll probably do the same again.

Hoop

28-01-2011, 11:41 AM

Vtrader

28-01-2011, 12:07 PM

POG next support/resistance USD$1250?
V.

elZorro

28-01-2011, 12:10 PM

Lesson learn't ELZ??

Hoop, you've got to admit I've done a good job of averaging down.

ASX asks OGC Why the drop in prices and volume up? (http://www.asx.com.au/asxpdf/20110128/pdf/41wdw7q9k99m1z.pdf)

Answer: Gold is dropping. No mention of Didipio (cue Basil Fawlty). But they give us a clue that EBIT is up about 15%.

Vtrader

28-01-2011, 12:13 PM

EZ your PM inbox is full.
V.

elZorro

28-01-2011, 12:54 PM

POG next support/resistance USD$1250?
V.

Hi Vtrader, seen that figure bandied about too, that would result in OGC at about CAD$2.25, that's a 54% discount on the old equation EZ/1.54, about where the share is at the moment proportionally. I think we need a good scary monetary crisis somewhere overseas. In the US preferably, and then gold shares will do well again..
(Deleted some of my inbox).

geezy

28-01-2011, 01:47 PM

seems to be in a freefall !

elZorro

28-01-2011, 02:20 PM

seems to be in a freefall !

It's not as bad as it looks, right now you can sell 200,000 shares on the ASX for just less than the trading price, plenty are keen to buy near these prices. Why is that?;)

Vtrader

01-02-2011, 06:58 AM

Not much we did not already know here.
http://www.oceanagold.co.nz/images/documents/files/110131_oceanagold_production_report_fy_2010.pdf
V.

elZorro

01-02-2011, 02:10 PM

Not much we did not already know here.
http://www.oceanagold.co.nz/images/documents/files/110131_oceanagold_production_report_fy_2010.pdf
V.

Vtrader: I've had a good look, can't find any further detail to this report. I guess they are busy knocking out the full year report and the updated reserves table. Of course the Aussies were quick to point out the gold recovered is just below the stated range (10.6% out). A surprise to the upside would have been good. Some blogger said that "we recovered more than that, it's just not included" but I guess there's always going to be unsold gold at the end of each accounting period.

OK, it's now early February, so the reserves chart will be updated soon..:)

I had a conversion of faith today and thought I should share it with fellow posters..Vtrader said I should learn about candlesticks etc. Even more convinced, now, that OGC might go part way to the moon..

The head and shoulders resulted in a downtrend as many on the dark (TA) side predicted. But now volume has picked up, and OGC has not been as oversold for this period of time for the entire three years on the chart. There you go. It must be ready to go the other way :eek2:.

elZorro

02-02-2011, 12:39 PM

Oceana Gold sales fall 10%
By Simon Hartley (http://www.odt.co.nz/history/65) on Wed, 2 Feb 2011

Oceana Gold - as forecast - has booked a downturn in gold sales of more than 10% for the calendar year 2010 and its crucial cash costs have begun rising, as predicted.
Oceana is coming off a stellar period, with its share price down almost 40% on a record high last year and it has predicted production costs could rise 57% to 67% this calendar year.
Analysts have predicted a tough year ahead for Oceana, as it grapples with delivering an increase of lower grade ore, less gold production and mounting production costs - but all of which are cushioned by strong spot prices, at present, and recent successes raising a total $NZ260.9 million in capital.
Yesterday's announcement saw Oceana shares soften from opening at $3.44, to trade down to $3.39.
In its unaudited accounts for the fourth quarter to December last year, Oceana sold 68,027 ounces from its Macraes and Reefton mines for the quarter, which contributed to a total 268,087 ounces sold for the calendar year.
"This was 10.6% lower than the full year 2009 and slightly below expectations for the year," Oceana said.
Unaudited cash costs were $US596 per ounce for the December quarter and $US570 for the full year, which is within previous full-year guidance, but up 38% on last year's $US411.
Oceana has previously advised if cash costs are up 67% this year as forecast, it would cost about $US685 per ounce to produce.
Oceana's revenue for the fourth quarter was $US93.8 million, based on an average gold price of $US1379 per ounce while operational expenditure for the quarter was $US39.9 million, excluding depreciation, amortisation and general and administrative expenses.
Exploration costs at both Macraes and Reefton for the quarter were $US3.3 million.

Simon's not his normal happy self in this article..but OGC did make a gross profit in one 3 month period of US$53.9 million. I'd be happy to see that in my bank account, even if just for a short time. These results point out, yet again, the importance of OceanaGold getting onto some better grades of ore in NZ. We should see some PR in this direction soon.

Good to see the OGC price moving in its customary direction, north.

Phaedrus

02-02-2011, 03:15 PM

It is good to see you taking an active interest in TA, elZorro. You will find it very useful. For myself, it was only when I began supplementing my fundamental analysis with TA that I was able to make a decent living from the market and thus retire early.

Volume has picked up, and OGC has not been as oversold for this period of time for the entire three years on the chart. It must be ready to go the other wayNot quite right there, elZ. As rated by the RSI, OGC was more heavily "oversold" in September 2008, for example (dotted blue line). At that time, OGC was 36 cents - and the long slide continued on to 16 cents! The oversold level reached and the period of time a stock is oversold are simply measures of the severity of the downtrend - they certainly do NOT mean that the stock is "ready to go the other way"!

Today, the RSI(14) oscillator triggered a "Buy" signal for OGC. Let's take a look at how dependable that signal is likely to be. On the chart below, all RSI Buy and Sell signals are marked by green and red arrows. See how when OGC was in an obvious downtrend (2009 and the last 4 months or so) the RSI was firing off a string of useless and misleading Buy signals. See how when OGC was in an obvious Uptrend, the RSI was firing off a string of useless and misleading Sell signals. In short, fast oscillators like the RSI (14) are of little or no use with trending stocks.

When a stock is trending (up or down) the way to monitor it is with trend indicators such as trendlines, moving averages, trailing stops etc. These will provide useful entry and exit signals.

Good to see the OGC price moving in its customary direction, north.I fear that you are still viewing the situation through rose-tinted glasses, elZ. Just as one swallow doesn't make a summer, today's (current) 0.7% rise doesn't make a trend reversal.
Over the last 4.5 months, OGC's "customary direction" is down.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/OGC22.gif

elZorro

02-02-2011, 04:53 PM

Hi Phaedrus, thanks for responding to my earlier post, I perhaps should just have asked for your opinion, that's appreciated.

Of course ;) there is just the slightest possibility that I might have picked the bottom of the current trend (within a day or so). A fellow ST person has advised me that the Twiggs Money Flow for OGC is still negative, I guess that's a bad thing? Apologies for the use of RSI(14), it was the default. I chose the wrong gear for that slope.

I am just waiting here hoping for one of four FA events to occur:

-The US price of gold responds to the low US$ and ructions in Egypt by moving upwards
-OGC updates their resources table finally (they promised they would)
-OGC has a great/better annual report on 18th Feb (books wise not so sure)
-OGC brings out staggered press releases of new exploration data

I think there's a very high probability one (or all of these) will occur in the next three weeks. So despite the chart not looking so hot yet, that issue should be resolved.

But if gold dips again, or something halts the gold recovery, I might be a bit out of pocket..

I just noticed this about OGC - listed on three exchanges - and early in 2009 it steadily starts a climb back to a sensible price. Furious volume on the ASX marked the change. But nothing much at all on the TSX. (It's quite the opposite now, the TSX generally sets the tone for OGC). Probably a coincidence that OGC's corporate office is also in Australia.

elZorro

04-02-2011, 06:58 AM

The gold price looks like it's heading for the stratosphere this morning. And look at this investment in OGC on the TSX, that's a few million dollars worth!

Polar Star Mining Corporation and OceanaGold Corporation Under Current Evaluation

OceanaGold Corporation OGC (http://www.stockhouse.com/financialtools/sn_overview.asp?symbol=T.OGC&table=LIST)
2/2/2011 11:51:14 AM

Feb 02, 2011 (ACCESSWIRE via COMTEX News Network) -- Equedia.com and Equedia Weekly provides research on the top Canadian companies with a focus on mining and resource stocks. Equedia is continuing research and evaluation on the prospects of Polar Star Mining Corporation (TSX: PSR) and OceanaGold Corporation (TSX: OGC). To be further notified of our updates on these companies and special report editions through our Equedia Weekly Newsletter, please obtain your free subscription here:
http://equedia.com/equediaweekly
Companies previously featured in our special report editions have hit new 52 - week highs since the initiation of our coverage and many companies under evaluation have made strong gains since being placed under evaluation. To receive these reports, please make sure to subscribe for your complimentary subscription to Equedia Weekly here:
http://equedia.com/equediaweekly

mistymountain

04-02-2011, 07:33 PM

elZorro

05-02-2011, 11:00 AM

As you all know I''m in for the long haul.

BUT extrapolating the long term trend lines for POG in US$ makes interesting reading for a FA investor like me. The recent downturn appears to mark the end of a correction that will now turn into the next price increase. Maybe by May we'll see a US$ 1600...

The only downside to that idea, MM, is that we'd possibly need a deteriorating world situation, not just a slide in the US$. Over on the TSX, some OGC traders are calling it quits for now, finding other more responsive gold mining shares. Another (Griffen1) who is buying on value like that recent big fund's purchase of several million dollars worth, says:

OGC Management is soft.
These guys need to get someone in charge that can deal with costs and the oncoming Filipino shakedown. They have great assets and should be extremely profitable after the hedge buy backs. Instead earnings per share are declining in the face of huge hikes in gold values that more then offset the NZ $ increase vs the USD$.

So wake up OGC cause I'll be grilling you on Feb 18th. I'm buying on the dips below $2.70 and it better be back to $3.20s by next month

In defence of OGC, they probably do have a lot to say in the next month or so, and we'll be having a good look at that. Meanwhile I found this article on their website, the other side of the story about OceanaGold's effect on Didipio.

http://www.oceanagold.com/images/documents/spotlight/in_the_spotlight_medical_missions.pdf

And even more interesting, some background (http://198.170.85.29/OceanaGold-re-Didipio-24-Nov-2009.pdf) to the removal of buildings, and more good deeds over the last few years.

November 24, 2009
Ms. Joanne Bauer
Senior Researcher
Business & Human Rights Resource Centre
333 Seventh Avenue, 14th Floor
New York, NY 10001
USA

Dear Ms. Bauer,
RE: Query via Email 20 November 2009

Thank you for your email and interest in OceanaGold and our operations in the Philippines.

OceanaGold is a responsible miner with a successful track record of designing, building and operating gold mines in New Zealand including one which was commissioned in 2007 in a designated conservation area. Our Company works closely with the communities in which it operates and is engaged in consultation with these communities throughout the entire mining life cycle.

Since acquiring the Didipio project in Northern Luzon, Philippines in 2006, OceanaGold has been applying those same standards to the project that have been at the core of our business in New Zealand for many years.

OceanaGold is operating to the rules and regulations outlined in the Philippine Mining Act, an act that is based on Australian mining code. Since arriving in late 2006 we have made a significant investment in this remote part of the country and have dramatically improved the local infrastructure for the communities in the area.

The Company has established numerous beneficial community based programs in the areas of:

• health and medicine
• provision of clean water
• nutrition
• education
• infrastructure development
• environment
• reforestation

Earlier this month in fact, OceanaGold was recognized for its best practise work in environmental rehabilitation and was presented with the national award in the Philippines for the best forestry program by a mining company in 2009 (see attached).

We are particularly proud of our medical mission programs where this year more than 2000 people from remote communities have been treated, provided medicine or given dental checkups. The next major medical mission is scheduled for December 12th. The Company is also involved in a successful partnership with the Philipinas Shell Foundation and a non-governmental organization combating malaria and dengue fever in the region. The program continues to show a reduction in the number of diagnosed cases.

Given all of this, we are disappointed that these examples of the depth of our support for the local communities are ignored. Instead we see a focus on misleading and self serving allegations made by a small minority of individuals attempting to profit through the illegal construction of shanties for the purposes of squatting; or through illegal small scale mining operations that are having a serious negative impact on the local environment.

For our part we welcome the interest by the Commission on Human Rights (CHR) in the Philippines and are pleased the chairwoman has chosen to visit the community for herself. We will continue to co-operate with her office in assisting to provide information as requested. We would expect that a well respected organization such as the Business & Human Rights Resource Centre would test the credibility of allegations surrounding the Didipio project and our operations in the Philippines. Blindly accepting third party stories does not meet your goal of transparency and understanding of developments in the region.

The Seven news report your email linked to is riddled with factually incorrect statements. For example:

• Video footage of a home being dismantled was not a recent example of the Company demolishing the homes of poor villagers but rather a home being dismantled after the parcel of land had been legally purchased last year. The owner in fact was assisting with the dismantling to salvage materials. This was an example of one of several hundred successful landowner transactions undertaken at a cost in excess of $7 million to acquire land near for the project.

•Claims that OceanaGold employees were involved in a recent attempted eviction of an illegal small scale miner – also untrue. This action was undertaken by the Minerals Geosciences Bureau and the Philippine National Police as these illegal miners are creating work environments that are unsafe and are the root cause for serious injuries and fatalities in addition to wide-spread environmental degradation.

I have attached additional information and news articles on just a handful of the many successful programs we are leading at Didipio and in the surrounding communities in the Philippines. With this background, we hope you will take the time to research for yourself our Company and our commitment to developing and operating sustainable mining projects in Australasia.

Yours sincerely

OCEANAGOLD CORPORATION

Darren Klinck
Vice President, Corporate & Investor Relations

elZorro

08-02-2011, 10:07 AM

All signs looking good for OGC:
I was a lot happier once I'd found that data about Didipio, looks like they have been good stewards and diplomats.
More accumulation on the TSX overnight, big players moving back in.
The resources update: repeatedly we've been told early February. If that's not mid Feb, then surely this week? It will come out after ASX trading finishes, about 4.30 pm if it's like normal. The TSX will get the first look at it.

Phaedrus

08-02-2011, 12:43 PM

I see that OGC is down again today, ElZ.

I don't know whether to admire your boundless optimism or feel sorry for you!

elZorro

08-02-2011, 12:50 PM

I see that OGC is down again today, ElZ.

I don't know whether to admire your boundless optimism or feel sorry for you!

You know Phaedrus, you can be a real killjoy sometimes :eek2:. I'm happy enough trusting that the big bets with OGC are going in over on the TSX. Last time, I saw money coming back out and didn't move quick enough. I'd expect the money is only going back in for a very good reason: quickish profit. It's like betting on the jockeys at the races. Can be a good tactic.;)

Today, some on the NZX panicked a bit and sold OGC down too low. Must have read P's post? There was no good reason for this. There was no news, and the gold price was stable. The Aussie market for OGC might dip a bit in the middle of the day, but usually returns to the close of trading figure of the TSX, they provide no direction. That's because they're not so sure about OGC, and anyway the TSX volume is usually about 3x the ASX.

Why are the Aussies a bit down on OGC? I think it's because the gold mines are over here. Do we buy Aussie products at the store if there is a similar NZ choice? Not usually.

Video: Phaedrus and ElZorro have a chat (http://www.xtranormal.com/watch/10369800)(all very polite, it might not even be funny).

I have also found this: an Aussie firm Royalco receives royalty in the form of 1-3% of the gold taken at Reefton's Globe Progress mine, and has other arrangements for Sam's Creek etc. In the 2010 year nearly $7mill of bullion was sent to them by OGC.

Reefton production a boon for Royalco

Ross Louthean — 19 February 2010

The royalty revenue company Royalco Resources Ltd (ASX: RCO) achieved a consolidated net profit after tax for the December half year of $A2.975 million ($NZ3.804 M), about 85% greater than the corresponding 2008 half year.
The prime income base for the Melbourne-based company was its royalty on the Globe-Progress mine at Reefton on the West Coast of New Zealand’s South Island operated by OceanaGold Corporation (ASX, NZX & TSX: OGC).
Royalco’s executive chairman Peter Topham said the record levels of income were expected to continue for the half year to June 30 this year.
He said DMR Corporate had provided a valuation of the royalty interests held by the company last September, suggesting a range of between $A15.88 M ($NZ20.6 M) and $16.96 M ($NZ21.69 M).
“Royalty receipts subsequent to the preparation of that report have achieved higher levels than those used as a basis for that valuation range,” Topham claimed.
Physical gold – after withholding tax – received from the Reefton royalty was 2,233.8 ounces for the half year. This was expected to reduce marginally as “per agreements” to 2,125 oz for the current half year at prevailing $NZ gold prices.
Gold holdings on deposit at the beginning of this financial year were 1,116.9 oz. That
holding was sold during the deposit term as well as some additional ounces received from the royalty, leaving gold on position of 616.9 oz at December 31.
Payments totalling $A291,000 ($NZ372,180) were received under the Mount Garnet Queensland project royalty in the half year, with a further $A397,000 ($NZ507,750) now accrued for the December quarter.
On the expense side of the equation, exploration costs were reduced significantly in the Philippines. A drilling programme was to be initiated on the Pao prospect Nueva Viscaya, however, a contingent of prospectors supported by non-representative religious groups barricaded access to the tenement just before drill mobilisation was to take place.
To avoid any potential violence, the programme was discontinued and the tenement placed on suspension.

mistymountain

08-02-2011, 10:05 PM

From my point of view OGC having a sale as the fundamentals are too strong to be at a discount. I see HGD also dropped 8% albeit from a $0.023 price reflecting market sentiment today.

Good news to come will just as quickly spike positive SP growth.

Currently POG consolidating once again as per the trend line on the 2 year graph. Using my limited TA skills I'd wave flag for a breakout to US$1600 over the next 4 months.

Toulouse - Luzern

09-02-2011, 07:34 AM

Hi El Zorro,
I enjoyed the video - great ...

Context: Video: Phaedrus and ElZorro have a chat (all very polite, it might not even be funny).

elZorro

09-02-2011, 11:34 AM

Hi El Zorro,
I enjoyed the video - great ...

Context: Video: Phaedrus and ElZorro have a chat (all very polite, it might not even be funny).

Thanks for that TL, now if I could see a proper turnaround in OGC my day will be made..

Here's a well written article on OGC from the Herald. (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10704572)Some interesting capital figures revealed.

elZorro

09-02-2011, 09:57 PM

3209

Mr P: My boundless optimism does have some bounds. I feel compelled to show this chart from the TSX last night: While the first big transaction seemed to be a buy, the big one towards the end of trade was not. Would that be day-trading? Seems a lot of shares, very risky. Maybe they found another share that was more interesting. On other recent days, more money was put into OGC, and it stayed there.

I have just checked the timing of press releases at the start of last year: most came out around midday NZ time. That way, the NZ and Aussie markets were trading or nearly trading. In mid January 2010, updated resources and the quarterly shortform report came out in quick succession. Eyeballing the shareprice graph, it gained about 25% on the good news, but didn't hold all of that gain. That is to be expected if OGC is strongly linked to the gold price.

Good luck to us all.:)

elZorro

10-02-2011, 09:48 AM

Here is the current chart for OGC on the TSX against the US$ gold price. It's still linked up all right, but at a new equation reflecting dilution, Didipio perception and lately the lowered gold output. This is causing consternation on Stockhouse with the punters, who are being swamped with larger sell-downs on occasion. In the last few days, OGC has not responded to the gold price like it should.

I've used my School C maths to find a new equation for the last two months or so, when the shares stopped being issued.

EZ MkII: OGC price (in Canadian cents) = 1.6 x US$ gold price -1884.

Based on that, right now OGC should be at 300c Canadian, but it isn't..:(
I'm not sure what happened in 1884 - spooky :eek2:

OB Research has been looking at OGC again. (http://www.ob-research.com/OceanaGold-Great_Value_and_Growth)Could be spin, who knows. I don't think this page was updated until today -gives subscribers advance notice.

On February 4th 2011, we sent out the following in a newsletter to our subscribers:
A few weeks ago we changed our recommendation for OceanaGold from Buy to Hold and lowered our target price. The reason for this was the guidance of lower production and higher cash cost for 2011 compared to our previous expectations. We could add that the fact that we were so close to the conversion price of the convertible bonds also made us feel that there were more shares that should share future profits.

The stock has now (surprisingly fast) come down enough for us to again see great value in this favourite of ours. The unpopular second private placement of C$ 115 million at C$ 3.50 means that the company has a very healthy cash position compared to the current MCAP of less than C$ 700 million and is fully funded for the ongoing Didipio development. We therefore changed our recommendation to BUY (http://www.ob-research.com/reports) at C$ 2.62 yesterday and keep our target price for 2011 at C$ 4.20.

To end, we would like to remind you of some of the great drill results that have come out from Reefton. Our hope has been and is that expansion at Reefton will increase production and lower cash cost in New Zealand. We look forward to further drill results as well as the coming reserve update.

I had a look at the shareprice from Feb 4th, there was a bit of interest generated. Those big trades occurred on Feb 3 to Feb 8th. I should try that sometime.

elZorro

11-02-2011, 09:42 AM

Looks like quite a dismal night on the TSX for OGC. Low volume and prices.

Today's Friday, next Monday it'll be the 14th Feb, which is Mid February. So we can add another disappointment to the list if no resource table update appears today.

Recovery amounts will be in range 270,000-290,000 oz, sorry, a bit below that.
Resources table annual update Late Jan early Feb, sorry we're still working on that??
Round Hill results will be out sometime 2010, still waiting
Profit increasing with gold price (unsure, but we don't generally like posting big net profits)
Cost per ounce for recovery within limits, sorry it's going up with fuel and exchange rate issues etc
Grades, NZ exploration.. sorry we don't appear to be improving the grades through the autoclave, they're dropping.
Didipio bad press..sorry, we haven't put forward our good background to counter that.
Shareholders get looked after.. sorry, we wanted some cash for Didipio and sold off a whole lot of extra shares without telling most of you first, while the shareprice was at a peak.
Clear disclosure: Oops, we forgot to spell out the longer-term 40% profit return at Didipio.

I'm generally fairly positive about OGC, but this failure to meet market targets that they set up themselves, is getting me a bit grumpy. Especially when from an outside perspective, these mines have never had it so good, with high gold prices and an unhedged position. Are management conserving the gold resources to sell at a higher price later? Are large investors happy with this buying position that has evolved in the last 2-3 months? It just seems that smaller shareholders aren't as well supported as they could be.

Here's the last 6 months of ASX trading, and it's now noticeable that big trades in mid Sept and early Oct were sells, good timing. The second one seemed to trigger on the 30 day MA. But there is also more volume now, an awakening of interest. Not reflected in the price just yet.

elZorro

12-02-2011, 08:10 AM

Here's a very good post from DetVicMackey (posted 11th Feb 2011 on Stockhouse)

Prior to Sept 9 2010, OceanaGold had been one my best performers before deciding to liquidate my shares and diversify into other undervalued mining companies. So many posters here were very optimistic on OGC given the rising price of gold, closed hedgebook, and increasing free cash flow. There was a lot of speculation that Didipio would come back into the picture adding back more value to the company. Fast forward 5 months later and I see a lot of pessimistic outlooks. What has changed in such a relatively short time period to have caused the sudden panic and lack of shareholder confidence?

Positive developments in the last 5 months:

- OGC added to the S&P TSX Composite
- Feasibility study on Didipio showing very robust economics for the project at very modest capex
- Completed financing to put Didipio into production
- Excellent drill results at Reefton which should extend its life of mine
- Recomencement of construction for Didipio which is scheduled to produce in Q1 2013
- Higher price of gold

Neutral developments in the last 5 months:

- Management changes

Negative developments in the last 5 months:

- Loretta Rosales attempting to boycott Didipio project on grounds of human rights violations
- Rumors that Didipio will be a no go based on previous allegations
- Stronger NZD and AUD vs USD inflating cash costs

From what I understand, the market seems to think that Didipio will be written off again and hurt the company's growth profile. This scenario appears already priced into the stock so the question now becomes how can investors find value in OGC today?

Last I checked, the company has 3 producing mines for 260koz or more production per annum. Free cash flow of about $169M per year based on $1350 gold, $700 cash cost, and 260koz and POG should remain strong. The company is flush with over $100M in new cash from its last equity placement that it could commit elsewhere if Didipio is written off. Market cap of about $670M suggests that OGC is trading close to 4 times FCF when comparables are trading at upwards of 8x. With no official decision made in the Philippines yet, those investing today could be getting a free option on Didipio since the market seems has it priced out.

The valuation and risk-reward were attractive enough for me to nibble back in yesterday. Selling based on fear usually causes short term pain, but it also provides opportunity going forward if one is patient. I think a lot of bad potential bad news has been priced in so the risk to me seems limited. The reward of course could be new all time highs in the next 12-24 months should Didipio remain on track and get into production.

PS: Here's one person's (bias) view on Ms. Rosales http://asiancorrespondent.com/37286/etta-rosales-as-chr-head-aquino%E2%80%99s-single-worst-act-of-political-madness/

This investor has obviously done everything right (not like me, aye Phaedrus). Sold at the top, kept cool, waited, and only came back when it looked safe. At least that confirms for me that I wasn't too stupid to be buying back in last week.

I had a quick look, here's one local article (http://74.53.24.87/news/articles/resources/111315138.shtml)confirming Ms. Rosales is in charge at the CHR and is not on OGC's side.. from what I've read elsewhere, many of the accusations in this article are "ill founded" to be polite.

Another set of articles from the local side. (http://www.minesandcommunities.org/article.php?a=10659)Included is a photo of one of the houses, fairly small structures. If only we knew the truth..if I knew for certain that OGC behaved badly as described, I would have to sell my shares. So I want a very full explanation. Come on OGC.

elZorro

15-02-2011, 12:45 PM

See press releases today: OGC has increased NZ resources (gold not fully bolted down) by 22% in a year, and its reserves (subset of above but more certainly known) by nearly 11%. Note that in Reefton the P&P reserves increased by 28%, and this region being called Blue-Sky by Mick Wilkes.

Add M&I and Inferred NZ and overseas resources, we have 9.47 Moz including Didipio.

New release, another contract to work on the mine setup at Didipio has been let. Looks like OGC still have a permit to proceed.

EZ MkII: OGC price (in Canadian cents) = 1.6 x US$ gold price -1884.

This equation must be wrong, as at 1360 gold, the Aussie price should be about $2.92. It's only $2.67 at the moment.

@ 3pm NZ :Now AU$2.76, so getting there: Marvellous press release timing, with the Didipio contractor posting their contract the same same hour on the ASX notices. So in one day OGC confirms they're finding more gold than they're mining, and that Didipio is full steam ahead. I have a feeling that the TSX is going to be very proactive with OGC overnight. Last night, one decent purchase of nearly 500,000 shares topped up the day. ASX looks like being a big day too, over 2 mill shares perhaps.

mistymountain

15-02-2011, 09:50 PM

mistymountain

15-02-2011, 10:19 PM

Expect a steady upwards rerating through early and mid 2011 with the tangible resource upgrade and POG continuing upwards trend.

When the Phillipines project gains traction expect a significant upwards rerating.

Of course this is my FA approach taking over so will be interesting to ascertain when the entry point where TA investors say buy. I raised this question on the Paladin thread back in July when PDN was $3.50. PDN is now $5.41 and in a TA uptrend (from my untrained TA eye). I'm interested in knowing when over the next few weeks TA investors would buy back in for OGC. I can understand that right now is not the time from the TA perspective but at some point this will change...

elZorro

16-02-2011, 07:52 AM

Of course this is my FA approach taking over so will be interesting to ascertain when the entry point where TA investors say buy. I raised this question on the Paladin thread back in July when PDN was $3.50. PDN is now $5.41 and in a TA uptrend (from my untrained TA eye). I'm interested in knowing when over the next few weeks TA investors would buy back in for OGC. I can understand that right now is not the time from the TA perspective but at some point this will change...

That's a subtle post MM: are you talking about the elephant in the room? :eek2:

I had a good day yesterday, and we'll see what the leadup to the annual report is like. I'm not sure what's happening over on the TSX, but apparently Sprott Asset Management bought 1 million shares today at CAD$2.64, if a blogger is to be believed. There was some shorting of the share first to help with the purchase, but it had reached CAD$2.73 in early trading. I expect it'll get back there by the end of their day.

The other elephant in the room is the annual report. I had a look back on the old thread and there were no postings around 18th Feb 2010, when it came out. I can't easily tell what the market did around then either. Production costs haven't greatly increased from the last quarter, so the year-on-year comparisons might be the ones the market looks at.

Big volume in Aussie today, still a bargain if EZII is correct, with new higher gold price. I think the TSX is following the ASX for once.

MM: I am not as brave as you, but would you like me to screen-grab the chart of OGC for the last few months and draw some lines all over it with some arrows pointing to trigger points? :eek2: Best I can do, worth = zero, because I haven't invested in software.

I'm sure the TA 'buy, buy, buy' info will be there, but as it's only a few percent rise so far, there are plenty of shares looking more interesting. Hence we have not heard from the TA gurus lately. Their input, however, is always appreciated. :)

elZorro

17-02-2011, 07:31 AM

Good trading on the TSX overnight, more big fish opting for OGC as shown in the chart at this stage. The goldbug's (EZII) equation predicts OGC to be valued at $3.14 Canadian with POG at $1375, and it's at $2.83 now. So still some expectation of further uptrend. But we'll take 5% in a day, that's OK.

Here's the FA position for OGC: neglecting any issues at Didipio or NZ and assuming the gold and copper will be won at some stage, the company currently has:

NZ$17billion of gold resources and $2.7billion of copper resources, with various profitability to the company of say 50% down to 30%(Didipio profit share). But certainly there's several billion dollars there in the ground. Current MCap at close of trade yesterday was a shade under NZ$1billion.

The Last Post from Phaedrus 8th Feb - More good news? I see that OGC is down again today, ElZ.
I don't know whether to admire your boundless optimism or feel sorry for you!

No worries Phaedrus, with these FA numbers I backed my convictions with a decent share purchase.;)

TSX now (9.30 am NZ): More massive purchases going on: 5mill shares traded, price C$2.88..
In the end 6million shares traded, price C$2.92

mistymountain

17-02-2011, 06:37 PM

Vtrader

17-02-2011, 09:20 PM

More again tomorrow EZ?
Full year results. Costs a bit more per ounce than previously, guess that is the price for exploration that leads to longevity...
http://www.oceanagold.com/

elZorro

17-02-2011, 10:16 PM

NZ Market responded positively if you are in short term investing mode. Up close to 10%. No doubt those TA investors watching those buy signals with those moving averages over the next month or so.... Cheers.

Hi MM, it wouldn't take TA systems that long would it? In fact I think we have a video here somewhere of Phaedrus and Hoop discussing the issue (http://www.xtranormal.com/watch/11166777)..

Take no offence you guys, and please show us what the trigger points for this uptrend were, they must be evident by now. Cheers.

Thanks Vtrader, hadn't spotted the annual report would be out today, not the 18th. The TSX should have fun with that overnight. Some good positive wording in the summary, I had a brief look at the figures (there's lots of them). They are choosing to run all of the better grade Reefton ore through the autoclave in preference, and heap leach some of the Macraes ore as well, to keep recovery amounts up. I still can't understand why there's no talk of another autoclave to be built. They are organising new dump trucks and diggers for Reefton etc. All good moves.

adamcz

17-02-2011, 11:13 PM

Hope it goes up a bit more. Still got a little bit more to go before I break even on my overall OGC trades (shoulda sold out at $5.40 but got greedy).

geezy

18-02-2011, 06:37 AM

well done to elz for keepin faith :)

elZorro

18-02-2011, 06:59 AM

Hi Geezy, maybe I'm a bit like Skol, just dogmatic? :eek2:

OGC crabbing sideways on the TSX at the moment, not sure if the 1/2mill trade was a buy or sell. But maybe we've seen the big purchases by the funds, and now they'll wait for the retailers like ourselves to trickle the price up. The PoG will do that for us too, have a look at this chart:

Beautiful is it not? Maybe we'll see 1420 gold again soon. The EZII equation is based on the (only middling) sentiment of the last 2-3 months, so it's conservative. If OGC's price goes above that figure on any given day, I will be more cautious about buying, and might be looking to do something else. Anyway, if the market returned to the OGC sentiment it held recently (slightly more gold recovered will help) the price should be C$3.27 today. It was at $3.00 last time I looked.

Posted by Adamcz: Hope it goes up a bit more. Still got a little bit more to go before I break even on my overall OGC trades (shoulda sold out at $5.40 but got greedy).

I had the same experience Adamcz, could have had a tidy profit back there, but held on. An expensive lesson I'm learning. I must, I must, I must.. learn to use TA for an exit strategy ;)

A bit of a shakeout going on in Aussie today, but most likely the finish price will be close to $3.00 (following the TSX price) after the big guys have had their fun. Look how many are wanting to buy at $2.84 or $2.85.

elZorro

20-02-2011, 11:20 AM

NZPA | Thursday February 17, 2011
OceanaGold reports record gold sales of $405m

Melbourne-based OceanaGold reported record gold sales of $US305.6 million ($NZ405 million) for 2010, almost a 30 percent increase on last year's full year result.
The Australasian company today said it produced 268,602 ounces of gold at an average cash cost of $570 per ounce.
Earnings before hedging and income tax was $US55.4m compared to $US25.6m in 2009.
The company's cash operating margins also reached record highs, hitting $783 per ounce in the fourth quarter.
Other strong gains included earnings before interest, tax, depreciation, amortisation, exclusing gains or losses on hedges, of $US139.5m -- a 31 percent increase on 2009.
The gold producer also secured $C115m ($NZ155m) in equity financing for its development of the Didipio gold copper project in the Philippines.
Chief executive Mick Wilkes said the results were a reflection on the leverage the New Zealand assets offered.
"With a solid production platform in New Zealand, as one of Australasia's largest gold producers, OceanaGold is well positioned to drive further growth in the business through the development of our Didipio gold and copper project," he said.
Earlier this week, OceanaGold announced it planned to spend at least $US9m on exploration in New Zealand.
The company said its proven and probable reserves in New Zealand had risen to 2.15 million ounces of gold at the end of December.
That was up from 1.92m ounces a year earlier, and after the company sold 268,000 ounces of gold from its New Zealand operations during 2010.
OceanaGold said it had expanded its mineral reserves for the second year in a row.
Mr Wilkes said that two years ago the company had a reported average reserve life of just 3.5 years at its New Zealand operations.
Now, the open cut operations were demonstrating seven to eight years of mine life with a respectable amount of reserves still growing at the Frasers underground operation and "tremendous" blue sky opportunities at Reefton.
By 5pm today, OceanaGold had added 33c to 400 on the New Zealand stock exchange.
The company is also listed on the Toronto and Australian stock exchanges.

I have had a better look at the annual books: still a lot I don't understand but it would appear that accounting issues for 2010 and the next financial year might have had something to do with the last few months. By selling off some new shares, management swapped the impending convertible notes back into long-term debt, raised a lot of cash reserves, and were able to fast-forward Didipio, keeping that highly valued asset in good condition as far as the books are concerned. Otherwise, there would have been some messy-looking writeoffs going on.

This showed up in the capital account, which isn't really spelled out as a table: the ratio of debt to equity is now much lower, with about $250mill swapped from one side to the other. So things are looking good, this is a much tidier set of books, most immediate debt is gone, and income is up strongly with indications of even better to follow.

It's just unfortunate that some of us (retail investors) bore the brunt of the changes, but you have to feel sorry for some of the big index funds that had to buy in over Sept 2010, they'll be keen to see the price back up soon. The specialist gold funds like Baker Steel appear to have been the smartest at trading OGC.

Vtrader

20-02-2011, 08:08 PM

EZ,
I cannot get excited about this one right now, hope it goes well for you.
V.

mistymountain

21-02-2011, 08:41 PM

POG now pushing US$1400 again... those 2 year and 5 yr US$ charts look like straightlines...

elZorro

22-02-2011, 09:40 AM

POG now pushing US$1400 again... those 2 year and 5 yr US$ charts look like straightlines...

Hi MM, gold now at $1406, but no excited response from the TSX overnight. They are looking to the Aussies for leadership on OGC, which is a bad thing for the share price generally. No big money going in at these prices either, it's not $2.60-$2.65 anymore. All very sad for my EZII equation, which should be thrown in the bin:(.

Oceanagold is going to crank out a new presentation sometime this month, perhaps that will help. Perhaps they could also update the resources table on the website, and the no. of shares on issue, as it has changed slightly I think.

If anyone is a wizz at demystifying annual reports, please comment. I think perhaps the looming convertible notes are having an effect.

BigBob

22-02-2011, 09:59 AM

Hi MM, gold now at $1406, but no excited response from the TSX overnight.

I think you'll find that Toronto (and indeed the US stock exchanges) were closed overnight.....

elZorro

22-02-2011, 10:31 AM

I think you'll find that Toronto (and indeed the US stock exchanges) were closed overnight.....

Many thanks BigBob, that's really good news in fact, apart from the obvious issue on my side:

EZ fails sharetrading 101 :blush::blush:

I wondered why the TSX has already closed for the day, thought it must be daylight saving or something..

BigBob

22-02-2011, 11:24 AM

Many thanks BigBob, that's really good news in fact, apart from the obvious issue on my side:

EZ fails sharetrading 101 :blush::blush:

I wondered why the TSX has already closed for the day, thought it must be daylight saving or something..

You're welcome mate - I had to do a double check too... :o)

adamcz

24-02-2011, 05:43 AM

elZorro

24-02-2011, 11:00 AM

Would be nice if they could supply an update on the mine status. They should be far enough away from Christchurch for it not to have affected them but the reassurance would be good especially for foreign investors (my partner got lots of overseas calls about if we were okay even though we are in auckland)

Yes, Adamcz, agree with that. Last time a press release showed up on the first working day afterwards. There was a bit of discussion on Stockhouse about it, issues with geography.

elZorro

25-02-2011, 07:53 AM

The latest presentation has been posted to the Oceanagold website. As the share price is flatlining compared to the gold price, OGC now shows up as very cheap, compared to almost all other medium producers in their table. Some interesting comments/images about future exploration prospects here and in the Philippines.

http://www.oceanagold.com/images/documents/presentations/ogc_february_2011.pdf

TSX still not happy with OGC, selling down. Perhaps general sentiment is poor.

elZorro

25-02-2011, 02:45 PM

I just received this email from OGC's HQ:

elZorro (not my real name),

Thank you for the email.

In any circumstance where there would be a material impact to our operations caused by any event (mother nature or otherwise) we would be obligated to update the market. As you are aware, Reefton and Dunedin are a long way from Christchurch. There has been no effect on our operations.

Our team has been in touch with the Government to make available our early response teams should they be required, and we will offer additional support wherever we can moving forward.

Best regards,

Darren Klink
Vice President, Corporate and Investor Relations
Oceana Gold Corporation

elZorro

26-02-2011, 09:39 AM

If OGC drops any further in the face of a stronger gold price, the big money will be back. It's almost as though some strategic selling off is going on, to set up some bargain buy-ups.
Have a look at the last 10 days trading on the TSX. The share price has dropped back into the area that attracted some large purchases just a few days ago.

elZorro

01-03-2011, 08:58 PM

OGC- it's doing badly enough for some bright TA persons to say "I told you so" "Never buy stocks in a downtrend" "It's been trending down for months" etc.

But fundamentally, this is a good stock, gold is looking to hit some new records and follow silver upwards. Some big money went into the share in the last boost after the annual report, and I don't think it all came back out. So what is the market playing at? NZ and Aussie retail traders are waiting for the Canadians to show us.

One poster "BahtBuilder" on Stockhouse suggested today that Newcrest Mining may be planning a hostile takeover of OGC, and to hang on for the ride. Naturally I had a look on google to see if this is complete BS or not.

This idea is not new, see http://www.odt.co.nz/news/business/5674/oceanagold-doubles-capital-cost
In 2008 OGC was about to do a nosedive and money was starting to tighten up. But here was Newcrest, Aussie's biggest gold miner, being mentioned. Back then OGC might have been valued just under 1 billion, so you'd have to wonder why they didn't pick it up much cheaper in early 2009, except no big shareholder would have sold for a pittance.

Right now OGC is valued around A$678mill, NCM at A$28,839mill Mcap (42x bigger). NCM has of course taken over LGL, Lihir Gold, recently. Mining just under 3,000,000 oz of gold per year plus copper (predicted 2011), NCM is doing nearly 12x better than OGC in that regard.

Well, would OGC be a bargain for NCM at the current Mcap?

Found this background:

Junior gold miners provide M&A allure
September 13, 2010

Investors seeking exposure to gold should back Australia's junior gold miners, which will be takeover targets for larger producers pushing to expand, analysts say.
The forecast wave of consolidation in the small end of the sector will likely see more Australian miners tie-up with offshore producers of the precious metal, Martin Place Securities research analyst Warren Kreyzig says.
"There is definitely a trend," Mr Kreyzig told AAP.
"Gold production is diversifying.
"It used to be South Africa, Australia and United States that were the big producers, and if you look now, it is more evenly spread among many countries.
"That trend is certainly taking Australian companies offshore.
"Australian companies in the future will have a lot more offshore operations than they do now."
Just this week, Perth's Avoca Resources Ltd unveiled a plan to merge with Turkey-focused, Colorado-headquartered Anatolia Minerals Development Ltd, while a bidding war between Canadian miners for Sydney-based Andean Resources Ltd was short lived.
Goldcorp Inc took pole position to take over Andean on Tuesday, when fellow Vancouver-based company Eldorado Gold Corporation pulled out.
Mr Kreyzig said Argentina-focused Andean was a perfect example of a prime takeover target for larger international gold miners, with its long-life, high quality ore bodies.
The larger miners were seeking projects with a mine life of about 30 years and were not interested in those expected to last less than 10 years, which described many of Australia's small gold mines, he said.
"It's not really in any of the larger players' interest to acquire any of those (smaller) projects unless they're thinking of amalgamating a few different operations perhaps into one," Mr Kreyzig said.
For junior gold miners, however, the acquisition of modest assets could be worthwhile as it had the added bonus of making a company harder to take over.
"For Avoca, their whole friendly merger is basically protection against a hostile takeover in the future," Mr Kreyzig said.
Citi's research division this week said Thailand-focused Kingsgate Consolidated Ltd was a potential takeover target, while Medusa Mining Ltd was set to hit the big league by 2015 with production of 400,000 ounces per annum (ozpa) from its operations in the Philippines.
But Mr Kreyzig was less convinced.
"Kingsgate will have to float their operations in Thailand onto the Thai stock exchange at some point in the not too distant future, so that's certainly a disincentive for any takeover," he said.
"And Medusa ... had very high grades initially, but they will tend to lower over time and that's the nature of the ore body."
Citi said several 100,000 to 200,000 ozpa Australian gold juniors would "scramble to build size and relevance" to fill the gap left by Lihir, a one million ozpa producer, following its $10.5 billion takeover by Newcrest Mining Ltd.
The transaction increased Newcrest's dominance of the Australian gold sector with the addition of Lihir's long-life assets.
Citi said Newcrest was 10 times larger than Australia's next biggest producer, Pacific Rim-focused OceanaGold Corporation, which produced about 280,000 ozpa against almost three million ozpa from an enlarged Newcrest.
"With the emergence of the small cap sector and the consolidation at the big end of town, there is a massive void in the mid-cap gold space in Australia.
"We see the need for a company to replicate LGL (Lihir) and believe that many of the Australian gold juniors have their eyes on the space.
"With the quality of their resource bases, none of the companies are likely to get there through organic growth in the next few years (Medusa possibly excluded).
"Thus we believe that M&A (merger and acquisition) activity is likely to continue in the Australian gold space."
Most analysts say there is strong outlook for the gold price, which is currently hovering around the $US1,250 per ounce mark, down slightly from the all-time high of $US1,265 in late June.
Surging investment demand would continue to be driven by concern about currencies, with the US considering quantitative easing, while global supply would stay tight as existing mine production declined and was replaced by fewer discoveries, Mr Kreyzig said.
However, gold sector consultants Surbiton Associates recently painted a buoyant picture for Australian gold output in the September quarter, when several operations are slated to pour first gold.
At the big end of town, Newmont Mining Corporation's massive Boddington mine in Western Australia continues to ramp up, while AngloGold Ashanti Ltd is expected to complete a feasibility study on its 410,000 ozpa Tropicana project, also in WA, in the December quarter.
AAP

adamcz

03-03-2011, 08:52 AM

elZorro

03-03-2011, 09:30 AM

Well gold is sittting on record highs yet OGC is down 8c at the moment on the TMX whats going on??

I notice there hasnt been any further information on the aledged human rights abuses in the last few weeks (and its must have been at least a month since the phillipine human right issue hit the papers)

Hi Adamcz - if I was a pure TA person I would say that the market is all seeing, all-knowing, and something is up (in this case, something bad). You'll have noticed that OGC has skirted around the Didipio issue lately, perhaps that is just because a legal/binding decision is pending. They did go through with engaging a contractor, but that could be seen as a bold approach in the face of adversity, probably included an 'out' clause.

There is still a lot of uncertainty with Stockhouse traders about Didipio, and maybe the earthquake over here hasn't helped. More to the point, less net profit, less gold mined seems to be a recurring theme in quarterly reports.

I have a hunch that many are simply selling OGC, to buy better performing gold shares. Our time will come, when the price looks so low that the big money hops back in, and I'd have thought that will be any day now. After all, they were there at C$2.61, why not at C$2.54?

gonzo56

03-03-2011, 11:13 AM

Just curious elzorro; What are your prefered alternative gold stocks? I'm only familar with IGR.

elZorro

03-03-2011, 12:31 PM

Just curious elzorro; What are your prefered alternative gold stocks? I'm only familar with IGR.

I bought a lot of OGC at the recent bottom, and apart from a small rise and fall, haven't seen it budging yet. But commonsense tells me it will respond to the gold price, so I'm holding on. I have bought into some of the other goldies like IGR in a small way, but with no great TA skills, I generally get it wrong. You'd think any producing miner would be a good share for the next period, if gold keeps going up. By most measures except sentiment, OGC is undervalued.

OGC should be helping out a bit here, with an updated website (where is the new resource data?) What is going on at Didipio? and some explanation in plain English about outstanding shares, and what is clobbering the increasing gross profit on gold sales.

Here's a new article from Chen Lin (http://www.theaureport.com/pub/na/8787), remember to use care with PR, and he's been quiet for a month or two about OGC, but says he still has a big holding and is adding to it a little at the moment.

gonzo56

03-03-2011, 01:06 PM

Same, I bought at 3.50.
I could see it was going to bounce up, but I was too stubborn to get out when it hit 4.00http://www.freesmileys.org/smileys/smiley-sad058.gif (http://www.freesmileys.org/smileys.php)
Maybe if OGC would post an "I'm okay" announcement relating to the earthquake, that would help investment.

That was a good article elzorro, nothing but positive words for OGC from Mr Lin

elZorro

03-03-2011, 08:34 PM

Hi Gonzo, here's an article via Stockhouse: OGC named as one of 10 gold stocks to watch. I think they're referring to troubled stocks, local issues etc.

http://www.highgradereview.com/10-gold-stocks-to-watch-in-2011/

They refer to Didipio as a PR nightmare. Yes, it probably is.

Here's a link to the Stockhouse page in Canada on OGC. The most recent posts are at the top. Some savvy retail investors are climbing in now, and they're saying why.

http://www.stockhouse.com/Bullboards/SymbolList.aspx?s=OGC&t=LIST

More on takeover activity in Aussie..

http://www.theaustralian.com.au/business/australian-miners-rate-high-as-global-boom-gets-into-full-swing/story-e6frg8zx-1226015586133

gonzo56

04-03-2011, 07:52 AM

Who do you believe in these situations, I'm sure OGC have always had good intentions. A company would have be absurd to demolish houses without the right to. OGC said they have done everything by the law, and are committed to developing relationships with the indigenous people... The CHR are probably running on a technicality that OGC didn't have the exact papers on the day, but had applied for them and received a yes. Who knows. Didn't they rebuild better houses in another place for everybody first anyway?
Like you say, PR nightmare all round. I would like more info, but then again the more OGC is under the spotlight, the more the situation will be blown out of proportion! It’s a shame that their great successes in NZ are getting hampered by all this allegation.
Either way, this doesn't mean that along this downtrend that’s occurring, there wont be small corrections up along the way!

elZorro

04-03-2011, 03:11 PM

Hi Gonzo et al, OGC is still trending down today, and gold dropping back a bit didn't help :crying:

But we're still busy at work. Maybe I should average down again, buy some in the faint hope that it's bottomed out...

Now if that doesn't get a TA response, nothing will.. :eek2:

gonzo56

04-03-2011, 03:25 PM

I suggest you wait untill monday/tue, RSI has a bit to drop on the TSX.

Hoop

04-03-2011, 04:18 PM

Phaedrus

04-03-2011, 04:24 PM

elZorro

04-03-2011, 08:48 PM

When you are in a hole, el Zorro, keep digging!

Nothing I say makes any difference, and it would seem that, like most of us, you prefer to make your own mistakes. So, in an attempt to speed up your education, here is some commonly accepted market wisdom for you.

Be brave when others are fearful.
If OGC was worth buying at $4.40, at just $3.40 it is an absolute steal.
Averaging down is a very effective means of reducing your entry price.
If you need to raise some money to do this, sell some of your other stocks that are above your entry price.
Remember, no-one ever went broke taking a profit.
Never, ever, sell a stock at a loss. Hold on to your losers, they will come right.
Buy now - you don't want to miss the train do you? - toot toot!
Mr Market is an idiot - capitalise on this by buying out-of favour, downtrending stocks.
Be a contrarian - there is no money to be made by blindly following the market.
Buy into weakness.
Sell into strength.
Diversify widely. You simply cannot hold too many stocks.
As a long-term investor, you don't need to worry about Bear markets.
Above all, you must be patient. Remember that it is time in the market that counts, not timing the market.

Thanks for those pearlers Phaedrus, I'll get them blown up and framed for my office walls ;). Afraid to say I didn't get the hint until about item 4 or 5, I thought you were reading my mind up until then!

You'll have to admit that there is some smart money piling into the share at these prices, but as traders are saying, when will the selling stop? It's a lesson to me that sentiment does have a big part to play in the market. OGC management must have some very good reasons for relifting the nasty rock called Didipio. Of course they probably don't have much of their own savings held in the stock, or a need to liquidate them anytime soon. In theory they're thinking longer term.

I am making mistakes, but I'm also listening and learning, thanks for the advice.

elZorro

09-03-2011, 11:55 AM

I think it's safe to say OGC sentiment has warmed up a bit. Gold has held out above the old high of $1420, and so we should see OGC's MCap getting back over a $billion. There are a few more shares around now, so don't expect too much..

OGC has not been keeping up with gold, even after the new shares had all been issued and accounted for. At this stage I cannot generate a new EZ equation. Looks like the bigger miners like Barrick are more closely linked to the gold price (http://seekingalpha.com/article/256892-which-gold-producer-best-mimics-gold-price-a-correlation-perspective#comments). A correlation of 0.78 is fairly tight.

US gold against OGC on the TSX:

http://www.infomine.com/ChartsAndData/ChartBuilder.aspx?gf=110575.USD.oz|112355.CAD.&df=20100514&dt=20100814

Add in ABX: yes, I see the difference:

elZorro

11-03-2011, 01:53 PM

News filters through that Baker Steel had sold another 1.8mill OGC shares by 22 Feb 2011, but still has a fair few.

http://www.asx.com.au/asxpdf/20110311/pdf/41xcmzhfkdt1hd.pdf

This is not a vote of confidence is it?

elZorro

11-03-2011, 09:04 PM

In fact, Baker Steel has been buying and selling OGC over the last few months. Sure, most of their shares purchased were in the placement, October 2010. So they haven't been a raging success this time around. Some talk on Stockhouse about the big players taking out the small traders by selling down. If so, the bottom is expected soon.

I have made a significant investment (for me) in OGC. I feel that OGC is the type of share that is normally relatively safe for a bigger investment, and I'm still happy with my average buy price. Now the question is, do management at OGC share my passion for investments? Here's what Wikipedia has to say:

Shareholder value is a business buzz term, which implies that the ultimate measure of a company's success is to enrich shareholders. It became popular during the 1980s, and is particularly associated with former CEO of General Electric (http://en.wikipedia.org/wiki/General_Electric), Jack Welch (http://en.wikipedia.org/wiki/Jack_Welch). In March 2009, Welch criticized parts of the application of this concept, calling a focus on shareholder quarterly profit and share price gains "the dumbest idea in the world".[1] (http://en.wikipedia.org/wiki/Shareholder_value#cite_note-0)

The term used in several ways:

To refer to the market capitalization (http://en.wikipedia.org/wiki/Market_capitalization) of a company (rarely used)
To refer to the concept that the primary goal for a company is to increase the wealth (http://en.wikipedia.org/wiki/Wealth) of its shareholders (http://en.wikipedia.org/wiki/Shareholders) (owners) by paying dividends and/or causing the stock price to increase
To refer to the more specific concept that planned actions by management and the returns to shareholders should outperform certain bench-marks such as the cost of capital (http://en.wikipedia.org/wiki/Cost_of_capital) concept. In essence, the idea that shareholders' money should be used to earn a higher return than they could earn themselves by investing in other assets having the same amount of risk (http://en.wikipedia.org/wiki/Risk). The term in this sense was introduced by Alfred Rappaport (http://en.wikipedia.org/w/index.php?title=Alfred_Rappaport&action=edit&redlink=1) in 1986.
Definition

For a publicly traded company, Shareholder Value (SV) is the part of its capitalization that is equity (http://en.wikipedia.org/wiki/Shareholders%27_equity) as opposed to long-term debt (http://en.wikipedia.org/wiki/Debt). In the case of only one type of stock (http://en.wikipedia.org/wiki/Stock), this would roughly be the number of outstanding shares times current shareprice. Things like dividends (http://en.wikipedia.org/wiki/Dividend) augment shareholder value while issuing of shares (stock options (http://en.wikipedia.org/wiki/Stock_options)) lower it. This Shareholder value added should be compared to average/required increase in value, aka cost of capital (http://en.wikipedia.org/wiki/Cost_of_capital).
For a privately held company, the value of the firm after debt must be estimated using one of several valuation (http://en.wikipedia.org/wiki/Valuation) methods, s.a. discounted cash flow (http://en.wikipedia.org/wiki/Discounted_cash_flow) or others.

History

In 1981, Jack Welch (http://en.wikipedia.org/wiki/Jack_Welch) made a speech in Hotel Pierre (http://en.wikipedia.org/w/index.php?title=Hotel_Pierre&action=edit&redlink=1), New York City (http://en.wikipedia.org/wiki/New_York_City) called ‘Growing fast in a slow-growth economy’ (8.12.1981).[2] (http://en.wikipedia.org/wiki/Shareholder_value#cite_note-1) This is often acknowledged as the "dawn" of the obsession with shareholder value. Welch's stated aim was to be the biggest or second biggest market player, and to return maximum value to stockholders.

Maximizing shareholder value

This management principle, also known under value based management, states that management should first and foremost consider the interests of shareholders in its business decisions. Although this is built into the legal premise of a publicly traded company[citation needed (http://en.wikipedia.org/wiki/Wikipedia:Citation_needed)], this concept is usually highlighted in opposition to alleged examples of CEO's and other management actions which enrich themselves at the expense of shareholders. Examples of this include acquisitions which are dilutive to shareholders, that is, they may cause the combined company to have twice the profits for example but these might have to be split amongst three times the shareholders.

As shareholder value is difficult to influence directly by any manager, it is usually broken down in components, so called value drivers. A widely used model comprises 7 drivers of shareholder value[3] (http://en.wikipedia.org/wiki/Shareholder_value#cite_note-2), giving some guidance to managers:

Revenue
Operating Margin
Cash Tax Rate
Incremental Capital Expenditure
Investment in Working Capital
Cost of Capital
Competitive Advantage Period
Looking at some of these elements also makes it clear that short term profit maximization doesn't necessarily increase shareholder value. Most notably, the competitive advantage period takes care of this: if a business sells sub-standard products to reduce cost and make a quick profit, it damages its reputation and therefore destroys competitive advantage in the future. The same holds true for businesses that neglect research or investment in motivated and well-trained employees. Shareholders, analysts and the media will usually find out about these issues and therefore reduce the price they are prepared to pay for shares of this business. This more detailed concept therefore gets rid of some of the issues (though not all of them) indicated in the next section (criticism).

Based on these 7 components, all functions of a business plan and show how they influence shareholder value. A prominent tool for any department or function to prove its value are so called shareholder value maps that link their activities to one or several of these seven components. So, you can find HR shareholder value maps, R&D shareholder value maps, etc.

Criticism

See also: Corporate social responsibility (http://en.wikipedia.org/wiki/Corporate_social_responsibility)
The sole concentration on shareholder value has been widely criticized,Template:Tirole 2001, Aglietta and Reberioux, 2005 (http://en.wikipedia.org/w/index.php?title=Template:Tirole_2001,_Aglietta_and _Reberioux,_2005&action=edit&redlink=1) particularly after the financial meltdown of 2009. While a focus on shareholder value can benefit the owners of a corporation financially, it does not provide a clear measure of social issues like employment (http://en.wikipedia.org/wiki/Employment), environmental (http://en.wikipedia.org/wiki/Natural_environment) issues, or ethical (http://en.wikipedia.org/wiki/Ethics) business practices. A management decision can maximize shareholder value while lowering the welfare of third parties (http://en.wikipedia.org/wiki/Third_party_beneficiary).
It can also disadvantage other stakeholders such as customers. For example, a company may, in the interests of enhancing shareholder value, cease to provide support for old, or even relatively new, products.
Additionally, short term focus on shareholder value can be detrimental to long term shareholder value; the expense of gimmicks that briefly boost a stocks value can have negative impacts on its long term value.

Alternative Definition based upon Criticism: Stakeholder Value

The intrinsic or extrinsic worth of a business measured by a combination of financial success, usefulness to society, and satisfaction of employees, the priorities determined by the makeup of the individuals and entities that together own the shares and direct the company. This is sometimes referred to as stakeholder value.
However, this concept is difficult to implement in practice because of the difficulty of determining equivalent measures for usefulness to society and satisfaction of employees. To give an example: how much additional "usefulness to society" should shareholders expect if they were to give up $100 million in shareholder return? In response to this criticism, defenders of the stakeholder value concept argue that employee satisfaction and usefulness to society will ultimately translate into shareholder value.

I think management at OGC should refer to this now and again, before diluting the shareholding (and then only to bring the company into ongoing disrepute). Where are the dividends? Why have they been unable to increase or hold recovered gold each quarter when they are obviously finding more of it than they can mine?

OGC isn't a goldmine. It has three, maybe four goldmines. Its job as a publicly listed company is:

"In essence, the idea that shareholders' money should be used to earn a higher return than they could earn themselves by investing in other assets having the same amount of risk (http://en.wikipedia.org/wiki/Risk)."

Gold is at an all-time dollar high, the latest high-tech gear is being used on a big scale, so this company should be looking after its shareholders right now, with a stable number of shares on issue, and a steadily increasing valuation to get alongside its peers.

Posted this above, then heard about the Japanese earthquake. Horrendous, terrible event, puts everything into scale.

But I still want to say, why hasn't the latest resources report for OGC been updated to the website pages? When you look, the small outfit that wrote OGC's website can't even get their own site up at the moment. (http://www.smallstudio.com.au/)

Google streetview shows the Corporate Office in Melbourne, and our (sometimes) billion dollar company uses a web business in this unassuming brick building, looks like most of their customers are nightclubs. They might do good work for those customers, but how much better could the OGC site be?

elZorro

14-03-2011, 12:05 PM

Gold looks to be on the way up, things haven't looked so uncertain for quite a while (at least I think that's right...)

OGC's low valuation is getting some interest from the sort of people who can spot a bargain.

Matthew Zylstra (http://www.mining.com/news/2011/03/09/matthew-zylstra-value-in-small-cap-gold-producers/)and the Mercenary Geologist (Mickey Fulp), (http://hardassetsnow.com/features-and-interviews/2574-mickey-fulp-where-the-fickle-money-is.html)both own shares in OGC.

elZorro

14-03-2011, 04:17 PM

One of the more favourable posts I've seen for awhile about Didipio (not mentioned, but I'm sure it's front of mind). If this article is correct, OGC will have no major trouble getting started in the Philippines.

http://www.mb.com.ph/articles/308994/palace-no-ban-mining

Ausenco had a major contract in 2007, based from their Manila office 270km away:

http://www.ausenco.com/page/News/News_Items/Ausenco_to_deliver_Didipio_gold-copper_project/

And more recently in February they announced they had another $7mill contract to supply equipment and services for Didipio, towards having the mine up and running by 2013.
For some reason this press release filing is not listed on OGC's site, and a search on the site won't pick up 'Ausenco'. It's like the early October 2010 done-deal on new shares, unless you read the attendant reports, it never happened. Darren K, if you ever read this, have a look at your 2004 policies for disclosure and up-to-date website information. These are helpfully installed on the website.

http://www.oceanagold.com/index.php?option=com_content&view=article&id=49&Itemid=125

elZorro

16-03-2011, 12:23 PM

Not even OGC is immune from the selloff, despite running as per normal.

Darren Klinck from head office might call me back today, does anyone have any questions? Apart from the obvious one, i.e. when will the shareprice turn up again?

Too late - I had a chat to him for about 20 minutes, which was a great commentary on the company's policy of looking after shareholders.

They will have a look at improving access to data on the website, which was overhauled just 2-3 years ago. Some data cannot be posted because of restrictions on what can be viewed from USA (the website might become viewer location sensitive).

Didipio: the Philippine govt is very keen on this operation going ahead. It would certainly help increase GDP of the region. (http://asiapacific.anu.edu.au/newmandala/2010/06/25/economic-impact-of-the-sepon-mine/) There will be some news, stories and updates on progress coming out each few weeks.

As the mine gets operational, $290mill of devt costs will be repatriated first, which will help the balance sheet even further. The balance sheet is in its best shape for the last 3-4 years already.

Didipio's effective tax rate will be about 44% after 5 years of cost recovery, as all local fees including the local geologist's percentage are included as part of the 60% local figure mentioned.

The cost of building an extra autoclave in NZ is in the hundreds of millions. The one that is at Macraes is looked after very regularly, and in the event of it being off-line, heap/carbon leaching is used at a slightly lower recovery rate. Leaching is already being used as an adjunct to the autoclave process. It's also possible that more oxygen could be used to increase the throughput on the existing autoclave. OGC is a larger power user, and the hydro-generated bulk rate for electricity down there, makes this type of plant viable.

Darren seemed very well-informed and helpful on all aspects I asked about.

adamcz

17-03-2011, 09:31 AM

elZorro

17-03-2011, 11:55 AM

Thanks for the update Z. Good to hear there is a plan b if the autoclave goes down. Amazed that a cost of a new one would be in the hundreds of millions.
I still hanging in there. Am pretty disappointed with the share price it has seemed like POG drop is matched by a drop in SP however a rise in POG isnt met with an equivalent rise in SP.
By my rough calcs provided as long as the POG stays above $1392 for the rest of the month the sales for the quarter should be similar to last quarter. Havent had a look at any of my expectations on expenses nor production

Hi Adamcz, I think from memory Darren took a stab that a new autoclave cost would be 100-200mill. I guess this includes the crushing and milling circuits and equipment. Yes I agree, the shareprice doesn't seem to reflect the value of the company at the moment. We'll have to wait until sentiment improves, and it sounds like OGC management are working on that in the background. They will not reply directly on local issues at Didipio in the media, a sensible policy. They are letting their actions speak for their good intentions.

Vtrader

21-03-2011, 09:37 PM

Watching closer again, anticipate a buy soon, perhaps even mid next week...?
V.

elZorro

22-03-2011, 07:51 AM

Watching closer again, anticipate a buy soon, perhaps even mid next week...?
V.

VT, you are a precis master - I'd guess there is a horrible downward Elliot Wave about to swamp OGC. Good luck with your timing, you have been more right than me so far.

Things I didn't know I didn't know.. (http://www.odt.co.nz/news/business/58730/oceana-buys-land-extend-macraes)

Applications for this new position at Macraes (http://www.qjumpers.co.nz/browse-jobs/senior-metallurgist-macraes-4357/)have just closed, you'd need to be a real specialist in metallurgy. Due to an expansion in operations.

elZorro

25-03-2011, 07:27 AM

OGC seems to be trading in a narrow band around C$2.60 average, for the last 2-3 months. It dropped down here after the new shares were issued, and when they indicated that the recovered gold wouldn't increase anytime soon, while costs per ounce were going up. So that would seem like a fair price, although MCap is now NZ$930 mill or so, and it was over $1bill ages ago.

There hasn't been any big money going into the share since before the Japan earthquake, when the annual report looked promising.

Just as well the US$ is trending down, and energy and gold/silver prices are going the other way. This is the perfect type of environment for a share like OGC. If Oceanagold can tweak some improved grades out of their three NZ mines on top of this, holders should see some nice capital gains.

Vtrader

29-03-2011, 10:05 PM

elZorro

31-03-2011, 07:53 AM

OGC announces yet more gold in the ground, adjacent to existing mine.
http://www.oceanagold.com/images/documents/files/110329_frasers_underground_exploration.pdf
More of the same here, the drilling programme is extending the mine life nicely, but what about increasing throughput?
Big capital spend required to increase capacity, todays news is good news, but not for today's balance sheet.
V.

Hi Vtrader, I agree the results from drilling are a bit underwhelming on first take. The Canadians are used to seeing bigger numbers and the Sp dropped on the news. But OGC seemed to find gold with every drill, it's close to their existing workings, and always at or above the minimum needed for profitability at $900 an ounce. News report. (http://tvnz.co.nz/business-news/fraser-s-gold-mine-shows-further-promise-4092607)

In fact, if you have a look at the intercepts and assume an average grade exists around those Frasers drill intersections in Figure 3 and 4, then between the new indicated and inferred resource boundaries there could easily be 260,000oz of gold. I guess you can't take all of it without opencasting, and it is a fair way underground. But it is perhaps NZ$500 million of gold. No wonder they're calling it tremendous potential.

http://www.crownminerals.govt.nz/cms/news/2009/frasers-underground-gold-mine-2018unsung-success2019/

Some history:

April 27:

OceanaGold’s Frasers underground mine development in New Zealand remained on schedule for commissioning at the end of 2007 with initial stoping beginning in April 2007. This project comprises reserves and resources beyond the limits of open pit economic production at the Macraes operation. The feasibility study determined that this mineralization can be mined
profitably by underground methods.

The underground mine commenced access in April 2006 from the open pit wall, through a decline being mined on the orebody. This strategy was adopted to minimise the capital expenditure and facilitate initial trial mining in order to optimise ground control and dilution control techniques prior to fullscale production. The development and trial mining is being conducted with the existing underground mining fleet that was purchased from the administrators of contractor Henry Walker Eltin. Byrnecut Mining has an initial three year contract for the underground development.

Underground development continued on schedule last quarter with development progressing to a total of 2,692 m. Ground conditions were better than expected during initial stope panel development. Ground monitoring extensometers have now been installed with initial stoping also underway. Diamond drilling has been solely focused on drilling grade control holes in the initial stope.

Face sampling for each development face has shown better than expected results in the main decline and the vent decline. This is due to the development occurring at the top of the Hanging wall shear where gold grades in the ore body are higher. Raise boring for the primary ventilation raise has been subcontracted to RUC Pty. The final diameter of the primary ventilation raise has been increased in size from 3.6 to 4 m to allow for increased ventilation flow rates for the downdip extension of the orebody.

The mine design is based on decline access and mining using a hybrid method of Retreat Long Hole Open Stoping (RLHOS) and Chevron Retreat Stoping (CRS), which is a variation of room and pillar mining. Yielding pillars are considered with no subsequent recovery. The resource incorporated into the underground mine design is the down dip extension of the Hyde Macraes Shear Zone (HMSZ) that has been successfully mined by open pit methods for the last 15 years. The HMSZ has been mined over a continuous 6 km strike length and remains open at depth. This goldbearing structure consists of a higher grade hanging wall zone and significant low grade stockwork mineralization beneath. For the Frasers Underground target area, 80% of the metal is contained within the upper section of the hanging wall. As a result the mining is confined to the higher grade hanging wall mineralization.

The underground resources identified are contained in two locations known as Panel 1 and Panel 2. More recent drilling on the northeastern margin of Panel 2 has identified a higher grade area known as Panel 2 Extension. Based on currently defined reserves and some of the resources, 0.8 Mt at 3.80 g/t Au can be mined from the Panel 2 extension area commencing in 2010. This resource is currently drilled to an 80 m by 80 m pattern, and NZ$850,000 has been allocated to bring this area to the 50 m by 50 m pattern required for indicated classification.

Meanwhile, in the Philippines, at the Didipio gold/copper project, detailed engineering by the EPCM contractor, Ausenco, was expected to commence in late April and procurement and engineering activities are expected to start during the second quarter. Progress on the main access road upgrade will continue to improve with the advent of the dry season, after an unusually wet start to the year hampered work schedules. The road improvements are scheduled to finish towards the end of 2007, before plant construction commences in early 2008.

Other site improvements continue to progress well. The access road into the portal site for the mine drainage tunnel and preliminary design of the portal site and box cut have been completed along with the completion of access rights to the land required for these initial developments. The Permit required for major construction work on the Project was received from the Housing and Land Urbanization Review Board (HLURB) late in the quarter. This HLURB permit covers overall approval for construction of the facilities required for the development of the project, and includes the processing plant, offices, accommodation camp, tailings dam, mine drainage tunnel, housing for relocation of residents and all related infrastructure for the project.

The plan is for four years of open cut mining, followed by at least 11 years of underground sublevel caving operations, totalling an expected minimum 15 years of processing operations. The project is designed for a throughput of 2.5 Mt/y from open pit and underground mining. Annual metal production will average approximately 227,000 oz (Au Eq) in the first ten years of production, comprising some 142,000 oz of gold and 15,000 t of copper in concentrate.

elZorro

02-04-2011, 09:22 AM

While no big players yet, there are noticeably more buyers of OGC on the TSX. The price seems to be following gold as it should.

An equation for the graphs below might be: OGC(in CAD cents) = 0.6 x PoG (US$) -593c

Mick Wilkes is appearing for a 20 minute slot at a mining conference in Singapore on 6th April.
http://www.terrapinn.com/conference/asia-mining-congress/conference-day-two-wednesday-6-april-2011-stream-2-8-50-6-00-hotspots-and-bottlenecks-in-mining-and-metals-philippines-southeast-asia.stm

Christina

03-04-2011, 11:32 AM

I've been researching Oceanagold & trying to follow the trends its all a bit way over my head.. the trends did seems to help me with when to buy as I got my shares at $3.04. Is anyone out these willing to let me know if this is a good price or give me any other advice on Oceanagold.. has anyone who is the average every day person actually got rich off these shares? These appear very volatile and a high risk and with no dividend payments there's only capital gain to be made? How long should you keep shares for or is it OK to buy and sell throughout the year to get the benefits of the peaks and troughs?

elZorro

03-04-2011, 01:10 PM

Christina, welcome to Sharetrader. So many leading questions.. I assume this is not a send-up, so I'll just comment straight up :).

You have done well to buy OGC at just over NZ$3. In fact you'll probably have some of mine that I sold mid March, been kicking myself ever since. OGC is a strong share - while it's not paying dividends yet, it probably could within a year or two. I have not got rich off OGC, but those who are a bit more detached from the company prospects and are using TA properly, most certainly have. Look back and you'll see OGC was a 20-bagger in the time period early 2009 to mid 2010. So I've done spectacularly poorly to not show a net profit yet, in my general sharetrading. But I'm learning, as I'm sure you will be.

Generally OGC follows the US$ gold price, as most shares are traded on the TSX, and they're looking hard at the gold price all the time. What upsets this rule is good and bad press releases, and international events, or more likely, capital raising. OGC management are very keen on seeing Didipio through, and so they've just completed selling 15% more shares, and they have to pay for some loans from the market that can be converted to shares. This has diluted the share price over the last few months, and at the same time the average gold recovery in NZ dropped 4%, and recovery costs went up quite a bit.

The negative factors have now gone for the moment, OGC has enough cash, no immediate major repayments, and the gold price is stable, looking to increase with the lower US$ trend. As the Didipio mine comes online late 2012, it should start factoring into valuations. Already the NZ mines output is not highly valued according to many analysts. So it's still possible OGC's share price could double or even triple in the next 2 years.

Christina

03-04-2011, 04:56 PM

Phaedrus

03-04-2011, 05:30 PM

I've been researching Oceanagold & trying to follow the trends its all a bit way over my head. Has anyone who is the average everyday person actually got rich off these shares? You bet they have. Conservative investors that are not interested in active trading often use a 200 day Moving Average to keep themselves on the right side of major trends. Such an investor would have bought OGC at less than $1 and sold 2 years later for more than $4. Quadrupling your money in just 2 years is about as good as it gets.

These appear very volatile and a high risk and with no dividend payments is their only capital gain to be made? With capital gains of that magnitude, dividends become irrelevant - who cares if they pay divvies or not?

How long should you keep shares for? How long is a piece of string? Ask 10 people and you will get 10 different answers.
Ask me and I will say "You should keep them for as long as they are in an uptrend".

Is it OK to buy and sell throughout the year to get the benefits of the peaks and troughs?Of course it is "OK". The question is whether such active trading will bring you returns that are higher than simply buying and holding over the same period. It would take a very astute, very experienced trader to beat simply buying and holding OGC - so long as it was in an uptrend. As someone who says "its all a bit way over my head" I reckon you shouldn't even be thinking of such active trading.

You can see that OGC is now at a lower price than it was years ago. To buy and doggedly hold such a stock is to go nowhere, but to buy it when it had commenced an uptrend and sell it when that uptrend had ended yielded handsome profits. The chart below shows an assortment of longterm indicators with their associated Buy and Sell signals marked by green and red arrows. You can see that these signals were only slightly better than those from a crude 200 day moving average. With stocks like OGC (and indeed most others) there is a time to be in them and a time to be out of them.

Current holders are in the process of giving their hard-won profits back to the market.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/OGC43.gif

elZorro

03-04-2011, 05:31 PM

Thanks El Zorro, I am so far up the newbie scale that I'm not sure what a send-up is? But I did buy my shares mid March, so thanks for that. I do find the whole thing very confusing though.. I expected the news release on the fraser mine to increase the share price but it seems to have dropped since, so for all my hours or research I am none the wiser. I will keep reading through the threads though and try to make some sense of it. I must say though, it is very disheartening to note that you appear to know a great deal about Oceanagold but have not managed to turn a profit yourself. As a newbie my holdings are extremely small but still holding hope over time I can turn it into something

Hi Christina, the Fraser drill grades were quite average from the Canadians' point of view, but they're worth more to OGC because they're right beside their existing excavations. Possibly the gold price was low that day too. Just because OGC is the only share that I research at all properly, and I choose to post the results here, doesn't mean I know much about how to make money off it :mellow: . At one stage I'd quickly earnt enough to buy a near-new car, but watched while the market took it back. And I didn't take OGC seriously until mid 2009, missed lots of the runup.

OGC might take some time to respond, a few months I'm picking, when their higher recovery from the new digger might result in an increase from 260,000 oz/yr. It's that sort of forward movement that gets the market fizzing, and better new profits each quarter. The next 1st quarter report is out on 28th April.

elZorro

04-04-2011, 09:26 PM

OK, this looks interesting..

OceanaGold report details a broader exploration quest in NZ

Ross Louthean — 4 April 2011 (NZResources.com)

A detailed report by OcenaGold Corporation (ASX, NZX & TSX: OGC) shows that the company is broadening its exploration in the Macraes region outside of its mining environment.

The Annual Mining Form released by the company late last week said a focus was now being made on “best strike extension target”, the Coronation deposit, about 8 kilometres north of the current mining-milling infrastructure.

The report also iterated the point that exploration was continuing on the downdip and plunge of the established open pits – taking in Round Hill, Innes Mills, and Frasers.
A new programme of structural mapping at surface of the open cuts and historical prospects was planned to advance understanding of the controls on mineralisation.
In the Reefton goldfield, the project takes in four open pits, the established Globe-Progress mine and the now well identified along-strike General Gordon, Empress and Souvenir.

The four pits take in 2 kilometres of a mineralised shear zone.
Based on known reserves a further 380,000 ounces was expected to be produced from these zones from the beginning of 2012.

The report said a deep drilling programme was underway to test for downdip potential of the Birthday Reef at the historic Blackwater mine at Waiuta within the goldfield.
The Blackwater project has been a stop-start exercise for the company going back about a decade and, at one stage, a headframe was placed over the main shaft but the shaft was found to be less sound than originally perceived.

Blueprints for Blackwater’s development have included developing a decline mine from near the Snowy River to access the mineralisation below the workings that were eventually mothballed in the 1950s.

In 2010 the Globe Progress mine produced 85,342 oz, about 12% more than the previous year. Concentrate from Reefton is sent to the Macraes process facilities where it is campaign treated through the pressure oxidation plant. The operation crushed 1.278 million tonnes of ore and produced a milling head grade of 2.6 grams/tonne, marginally better than 2009.
Attachments

http://nzresources.com/icons/pdf.jpgOceanaGold Report. (Adobe PDF File) Download (596KB) (http://nzresources.com/attachments/1976/OCEANAreport_lr.pdf)

OceanaGold's website has been down for nearly two days, maybe it's getting an upgrade?? Certainly plenty of pages needed updating. We live in hope :).

OGC should see a 3% gain today (6th April). So more gains for Christina with some of my shares. Could I have them back please, at $3.04?

elZorro

07-04-2011, 07:13 AM

The OGC website is still down, maybe it's a full revamp? The share had a huge day in Australasia yesterday, the initial response in Canada is - more selling. Fairly sure they'll end up at the ASX price of $2.88 though. Looks like many goldies are having mixed success just at the moment. (http://www.reuters.com/article/2011/04/06/us-gold-stocks-idUSTRE73541620110406)

A rare chance to compare OGC with Newmont Mining's Martha/Favona output. (http://www.stuff.co.nz/business/industries/4856637/Bull-run-in-precious-metals)

This is a great day for OGC over here anyway. Maybe the Australians know something the Canadian market doesn't. The sentiments are completely opposite to normal, as the TSX normally leads this share. I'm not complaining. 'Christina' - all is forgiven, I'm doing OK from the shares I kept :).

The Oceanagold website is now partly back up and running. No major changes there yet, some pages are much reduced so I'd expect some rewriting is going on. There is also a new presentation from the Asia Mining Conference (http://www.oceanagold.com/assets/documents/Presentations/ogc110406asiaminingcongressfinal.pdf) earlier this week.

adamcz

07-04-2011, 09:36 PM

elZorro

08-04-2011, 07:37 AM

Couple of great days on the ASX and NZX. Lets hope it continues.

Found this article the other day. While it probably doesnt relate that much to OCG, it does seem to highlight that the Philipine government is keen to get mines up and running.

http://business.inquirer.net/money/breakingnews/view/20110406-329752/PH-vows-to-protect-mining-investments-resolve-Tampakan-deadlock

Hopefully we will get some more news on didipio when the quarterly accounts are released. Im expecting to see reduced net earnings of around 19-19.5m on increased costs per ounce and more drilling. Reckon income should be reasonably flat. Anyone else wanna take a guess?

Thanks for finding that article Adamcz, it reinforces what Darren Klinck said -the Aquino (http://article.wn.com/view/2010/05/11/NEWSMAKER_Philippines_Aquino_steps_out_of_parents_ shadows/)govt is keen on mining. It's hard to find new articles, considering the size of the company.

Income may be flat or even slightly down, and profit depends on how many one-off costs are still working their way through the books. But the annual set of books was a lot tidier that way, so here's hoping. These new US gold prices will help market perception, and the second quarter last year was positive for gold. One big buy of over 500,000 shares on the TSX overnight, so far :)

It's quite possible the presentation at the mining conference earlier this week prompted all the interest in the share a day or so ago, when over 3mill sold on the ASX, and gave an optimistic high that was pulled back a bit today.

With gold resting at US$1475, next week should also be good for OGC. Looks like the shorting of this share on the TSX will continue for awhile, let's hope they give it up, it's going to be hard with gold reaching new highs daily.

The Philippines subsidiary of OGC is running a good-news blog in Wordpress (http://didipioprogress.wordpress.com/)(free) and that does look quite positive. As the Didipio mine gets underway, local university graduates will be employed, other local mining staff will be flown to NZ for training at Macraes etc. Builders will be employed for quite a while building the staff quarters, etc. Of course Didipio is just one region within the prospecting space that Oceanagold has access to. There are hopefully going to be plenty of good news stories flowing from here.

Back to NZ: there's a great job going at Reefton for an Exploration Geologist (http://www.qualmaster.org/Jobs/JobView.aspx?ID=4508). Looks like OGC carve up the areas of interest and assign a geologist to each one.

elZorro

11-04-2011, 12:49 PM

News release, we know most of this already, but good PR.

http://www.asx.com.au/asxpdf/20110411/pdf/41xz6p5jr0z5lf.pdf

elZorro

13-04-2011, 08:26 PM

Paul Bibby has another job -we'll probably never know why he left OGC. They were good times for the share, in retrospect.

New posting for former OceanaGold CEO

Ross Louthean — 13 April 2011

The former chief executive of OceanaGold, Paul Bibby, has taken up a managing role in a Perth junior gold company.
Range River Gold Ltd (ASX: RNG) announced this week that Paul Bibby would become the company’s new CEO.
Bibby, who had a short reign at OceanaGold, surprised the market by departing that position after having driven an aggressive exploration programme that dramatically lifted reserves at both Macraes and the Reefton goldfield.

The challenge for Bibby, a former Rio Tinto and Zinifex executive, is likely to be greater at Range River Gold, as it is a minnow without a solid reserve or resource base, and also a penny stock that the market perceives is in dire need of a significant capital reconstruction.

It has 2.178 billion issued shares as well as about 90 million options.

Bibby replaces Rick Watsford, who resigned from the Range River board on Monday.
The purchase of the Mt Morgans tenements in WA from Barrick Gold in 2009, led to the Range River re-establishing itself as a gold producer after a short and unhappy gold mining exercise in Western Australia’s far north.

Late last week Range River went into a trading halt after finalising standstill agreements with major creditors and Macquarie Bank Ltd for a prepaid gold facility. The company said it was now pursuing other funding options, including a capital raising.

This popped up on a google search, OGC mentioned on a list of 5 most indebted goldminers? It is the lowest ranked, which is some comfort, and really just the top two would be of concern. I have no idea whether this is an accurate list. In OGC's case, the shareprice has factored in most of the debt left, which is in convertible notes. The shareprice acted as though those notes would be converted to shares, a few months ago.

RELATIVELY HIGH DEBT TO EBITDA RATIO DETECTED IN SHARES OF JAGUAR MINING IN THE GOLD INDUSTRY (JAG, MFN, RGLD, NXG, OCANF)

Apr 12, 2011 (SmarTrend(R) News Watch via COMTEX) -- Below are the top five companies in the Gold industry as measured by their Debt to EBITDA ratio.

The measure of a debt's pay-back period is Debt/EBITDA. The longer the payback period, the greater the risk. This metric ignores all tax expenses even though a good portion are cash payments and gets paid first.

Jaguar Mining (NYSE:JAG) has a Debt/EBITDA ratio of 7.95x based on total debt of $167.9 million.
Minefinders (AMEX:MFN) has a Debt/EBITDA ratio of 4.65x based on total debt of $119.1 million.
Royal Gold (NASDAQ:RGLD) has a Debt/EBITDA ratio of 1.7x based on total debt of $225.5 million.
Northgate Minerals (AMEX:NXG) has a Debt/EBITDA ratio of 1.51x based on total debt of $190.1 million.
OceanaGold (NASDAQ:OCANF) has a Debt/EBITDA ratio of 1.47x based on total debt of $207 million.

SmarTrend currently has shares of Minefinders in an Uptrend and issued the Uptrend alert on February 15, 2011 at $10.67. The stock has risen 43.9% since the Uptrend alert was issued.
Write to Chip Brian at cbrian@mysmartrend.com

So OGC hinges on the gold price for the next year and a half, or until more recovered ounces appear, EBITDA quarterly results improve, or sentiment improves.

elZorro

16-04-2011, 09:33 AM

No surprises overnight, gold moved solidly up, (unfortunately OGC stayed where it was). Here's a buyout between Gold Fields and Iam Gold that has just been posted. (http://torontostar.morningstar.ca/globalhome/industry/news.asp?articleid=377224)

IAM Gold now has a war chest of 1 Billion, some costs on their own 100% owned mine expansions to cover soon, but spare cash for acquisitions, with no debt. Note they had higher recovery costs than OGC, and they received US$300 per ounce of reserves equivalent, for their smaller portion of the mine. Some say this was too cheap.

OGC has 3.56Moz of reserves, so should be valued at no less than US/CAD$1068 Million on that basis, but its cash reserves of 180mill are balanced by a portion of long-term debt. The sharemarket left its MCap at CAD$754 mill overnight. The OGC books do show about $284mill of debt, long term. (http://tmx.quotemedia.com/financials.php?qm_symbol=OGC) This leaves a book equity of 684mill.

Vtrader

16-04-2011, 09:56 AM

TA is showing potential currently for OGC.
http://i949.photobucket.com/albums/ad333/VtraderNZ/OGC_16APR.jpg
Has been trending down recently as we all know, but since 16 March has been making higher highs and higher lows.
Some dominant candle days, followed by low volume declining days.
Gold at alltime highs (in USD) for the last 10 days, also making higher highs and higher lows.
Further back in this post are EZ equations correlating OGC:Gold, so no real suprise to see OGC trending same as gold currently.
Assuming that the OGC retracement was complete on 18 March, some upside possible here for OGC.
Waiting for significant volume and a price break above AUD$3.00

Disc:
Since the "ST Hamilton" meeting on Wednesday I have a marker holding and will upscale should this trend confirm and accelerate.

Must accelerate myself, Hamilton 400 - V8 Qualifying.

V.

elZorro

16-04-2011, 10:12 AM

Hi Vtrader, take your raincoat, enjoy the V8s though. Should be some good slides on the track. Thanks for the OGC chart, I hadn't looked at it that way, there is a solid support line under it at the moment.

Vtrader

16-04-2011, 07:09 PM

elZorro

16-04-2011, 09:42 PM

EZ,
Just noticed that the top reversal pattern for OGC mid December was a shooting star.
A small indicator of what sometimes comes next.

Regarding the V8's lots of range trading between the walls, a few breakdowns, but no breakouts.
V.

Very clever play on words, Vtrader, it's too late on Sat nite for a suitable reply. On the upleg of that particular shooting star, I did sell some OGC (not enough).

But I was doing some rough FA work on the books of IamGold. On paper the business is worth about 3.5 billion (equity). The sharemarket sold it down 700 odd million yesterday, to match the amount they got for part of two mines they sold for cold hard cash (must have sold too cheaply?). It still has a market cap of over $7billion, priced by the market. They produce 1Moz of gold annually at the moment (http://www.iamgold.com/English/Operations/Reserve-Resources/default.aspx), 4x OGC's, and have plenty in the ground. But even so, it makes OGC look like a sitting target for a buyout by these bigger outfits. IamGold really does have a clean set of books. No long-term debt at all.

So for under a billlion, IamGold could add about another 40% output to their current operation within 2 years. If they wanted to.

Just checking OGC is doing OK - compare it to NGF, who produce 120,000 oz p.a. in Aussie. They're losing money while doing it, as they cart the gold some distance from several pits, and the average grade is also low. By the time they pay their bills, there's nothing left, even with current high gold prices. Baker Steel bought in here, early in 2010, so they don't always get it right, it's trended down since. NGF have also added to the share count, for funds.

Am I a conspiracy theorist? Maybe just a tinge of one. Jake Klein and Jim Askew were well up the tree at Sino Gold Mining Ltd, which was sold to El Dorado Gold in 2009 for 2 billion. Jim Askew was of course chairman at Climax Mining when it (Didipio) was sold to OceanaGold. Jake Klein is now on the board of OGC. Just a coincidence, or do we have two people (at least) who are rather keen on buyouts?

The adjusted OGC website is missing previous interesting comparisons with other miners, and Reefton is described as having only a few years of mining left, and Macraes not many more. But elsewhere staff have mentioned decades for Macraes, and there is a lot of keen exploration going on at Reefton, looking for more of the very high grades that put Reefton on the map.

Despite this, the next two years are being portrayed as being static by OGC, same 260,000 oz output, rising costs, until Didipio comes online. And of course those costs could get out of hand. Bring on the white knights? Is someone going to make us a deal we just have to accept?

elZorro

18-04-2011, 07:51 AM

Here's a great little earner: get yourself in a position to be on the boards of several mining companies..each one paying up to $400k p.a. (Chairman) plus share options.

Jim and Jake are also with Conquest Mining. (http://www.abnnewswire.net/press/en/62409/Conquest_Mining_Limited_ASX:CQT_Appoints_Jake_Klei n_As_Executive_Chairman) Background on directors fees. (http://www.eganassociates.com.au/Portals/0/EAN09/Korn_Ferry_Report.pdf)

Steve Orr was on 1 mill odd, plus benefits, when he was CEO. That's fair enough.

In March 2009, OGC had no plans to close out hedges for 2009 or 2010 (http://www.reuters.com/article/2009/03/10/us-mining-summit-oceanagold-idUSTRE52910S20090310?pageNumber=1). Within a year, they had done it, using convertible notes. Jake Klein had turned up a few months earlier.
Later in 2010, they were musing publicly about what deals could be done with Didipio, and less than a month after Paul Bibby left, they solved it by selling off a lot of new shares to big investors without any advance notice to shareholders. That diluted the hell out of the shares, and at the same time previously increasing gold output went to 'hold' status. Who knows if that has been engineered or not. What I have noticed is that although mine workers can buy OGC shares in a 50% subsidised way, not many do. Quite a few were relinquished at a profit in 2010, reported in the books.

The quarterly books have consistently been showing low or reducing net profit, which doesn't help with perception. Maybe not a lot can be done about that, if grades are down and costs are up. But I think we've identified that another autoclave would boost things a lot in NZ, and even a $200mill cost would see a handsome annual ROI. So why is this not being talked about? Perhaps the timing isn't right. Will some other company get to do this step?

Meanwhile, existing shareholders have paid for Didipio upfront, and the diluted shareprice has effectively factored in all of the unhedging (which I think was a good idea, for now).

Any thoughts out there as to whether this makes sense? If a buyout is what is being set up here, do shareholders have any real say in how that happens, and what is the likely result? Is this company's management obeying the No. 1 rule: to look after all shareholders' interests?

Jake Klein makes move (http://afr.com/p/business/companies/klein_takes_helm_after_conquest_ZejrNT6JVCpiwJeRgS wQJM). 2010 Annual report from Conquest (http://conquestmining.com.au/images/conquest-28--phied.pdf) Nicholas Curtis is on the Conquest Board too. (http://www.smh.com.au/business/shareholders-threaten-action-over-lynas-sale-20110417-1djr3.html)

Current directors of OGC have connections to (amongst others)
ElDorado Gold ELD Mcap 9.5bill
Quadra FNX Mining QUX Mcap 2.6bill
Conquest CQT Mcap 332mill

elZorro

19-04-2011, 07:47 AM

Little pieces of the puzzle are starting to fit as far as I'm concerned:

The 115mill bought deal for Dipipio in October 2010 (http://www.oceanagold.com/assets/documents/filings/2010-Media-Releases/101005privateplacementannouncement.pdf)was headed up by Macquarie Capital Markets in Canada. Jake Klein worked for Macquarie Bank, still has connections there.

As far as OGC goes, he's in quite a powerful spot too:

2009-Present (OceanaGold)
Non-Executive Director, Chairman of Remuneration & Nomination Committee and Member of Audit & Financial Risk Management Committee

This small team sets the fees for directors (try googling those up, I tried) and more importantly controls who gets nominated for the board...Here are the members of the current committees. (http://investing.businessweek.com/research/stocks/people/committees.asp?ticker=OGC:AU) The three in the remuneration and nomination committee are Askew, Klein and Fern (Mr Askew lives in Denver USA, the other two reside in Australia). Mr Fern was also at Climax Mining. Mr Klein is also in the Audit committee.

The last big block of OGC shares purchased was on the TSX, for about $2.60. The gold price has increased the SP since then, obviously not as much as I was expecting. No other big long-term buys have appeared, and that was concerning. The buyer(s) at $2.60 can short the shares all the way back to $2.60 against a much smaller retail market, and not lose any money. (Excuse my ignorance about shorting, I just play it straight). But if this is happening, the OGC price will remain in the doldrums while gold races upwards. A perfect situation for an OceanaGold Buyout offer.

Look at overnight on the TSX (18th April), there's selling going on there with OGC, when gold has just reached an all-time dollar high. I think the big players on the TSX know what's going on, and are sitting back, waiting for events to play out.

So perhaps it's not about whether mum/dad investors can choose a good company at the right time in the market, it's about whether a stacked board can stitch up a deal for a much bigger player, and be handsomely rewarded for it.

A pending Takeover of OceanaGold -have I gone mad?? No, unfortunately, I don't think so.

From TheAustralian.com.au, March 10, 2010 (http://www.theaustralian.com.au/business/city-beat/finally-some-changes-at-goldman-sachs-jb-were/story-e6frg9no-1225838879456):

Takeover by stealth
A COUPLE of weeks ago, Conquest Mining told shareholders it had two pressing issues: a strategic review of its key Silver Hill gold, silver and copper project in central Queensland after a somewhat disappointing feasibility study; and it was looking for a new CEO.

How serendipitous that the mob called in to conduct the review -- Jake Klein's DAK Corporation -- has come up with a solution to both issues. Conquest yesterday announced a boardroom shake-out that looks an awful lot like a takeover by Klein and old friends from his days at Sino Gold Mining.

Klein, the former Sino chief, obviously liked what he saw. He'll become the new executive chairman of Conquest, earning $400,000 a year and with enough options to take up to 7 per cent of the company. Sino founder and former chairman Nick Curtis and his successor as chairman, Jim Askew, will become non-executive directors of Conquest. Both also get a swag of options.

Leaving the board will be long-serving CEO John Terpu, who'd already signalled plans to move on, Bruno Firriolo and Joe Radici. Chairman Rich Krasnoff will stay on as a non-executive.

The changes are subject to shareholder approval. South Africa's Gold Fields holds 19.9 per cent of Conquest. But since Gold Fields did quite well when Sino was bought by Canada's Eldorado Gold last year, we doubt they'll raise too much of a stink.
CLIVE MATHIESON, JAMES CHESSELL

elZorro

20-04-2011, 07:17 AM

Interesting 2009 article about Didipio: the Philippines govt set a 6 month deadline (http://www.gmanews.tv/story/143223/oceanagold-given-6-months-to-start-rp-mine-before-govt-takes-it-over) for restarting of the project, and suggested OGC get in an investor. Jake Klein (with powerful investment connections) arrived on the board in December 2009. Much of OGC's meteoric rise had already happened by then, starting in January 2009. Pinpointed with very solid buying on the ASX from that date, OGC became a 20-bagger at its recent peak a year and a half later. Since then of course, shareholders have been collared to pay off some debts, some even in advance.

Trading of OGC on the TSX overnight has been very quiet. Maybe the shorting has stopped for awhile..
Gold meanwhile, continues to nudge US$1500.

Hoop

20-04-2011, 10:51 AM

zzzzzzzz...on this share lately...... getting a restless gut feel so lets wake up and have a look.
Some stocks are easy to chart and some are hard OGC is very hard...hence the big risk.
To trade in this share the reward has to be big to outweigh the big risk.

Sorry The chart below is a complex mess.

simply put..I'm using S&R lines with gap analysis.....gaps make reliable S&R line points.
.................I have noticed a possible Symmetrical Head and Shoulder being formed (the second half should be a mirror image of the first half of the formation)...and if it is true the the share may break 2.70 then turn and rapidly go to the 3.05 Neck resistance where there is a good chance it will break up though it with a gap up. .................So investors watching for the 3.05 S&R break will miss out with the share rapidly rising up to its TA target of 3.70.
.................If the H&S pattern formation is false and fails to form the share may fall below 2,45 and possibly gap down and test the bottom at the 2.20 area.
.................Risk V Reward ..investors with steel balls will be entering methinks...

Even though the share price took a beating yesterday the chart is looking the best its been for months.

Disc: Have no shares...back on watchlist

http://i458.photobucket.com/albums/qq306/Hoop_1/OGC19042011.png

elZorro

20-04-2011, 10:32 PM

Thanks for the detailed work on the chart, Hoop. I didn't know about the link of gaps to support and resistance lines. Phaedrus said this chart was easy, well it was, on the way up..
Unless the company is keeping drill or exploration info from the market (they'd never do that would they?) I can't see the share price doing better than a double in the next year. But at the same time I can't see it dropping much lower on valuation, making it a safer spot now for my main investment. It will do well with Didipio producing.

I think there is a real chance of a takeover, merger or buyout of Oceanagold (OGC) in the next year. Newcrest (http://www.businessweek.com/news/2011-02-11/newcrest-first-half-profit-doubles-on-acquisition.html), or Eldorado Gold, could be suitors. But I feel this would limit the possible return for OGC shareholders, as it might get a 30-50% bonus rise before it's all over. We'll never see what it could have become, it would be a small part of a bigger outfit. Look at this from the OGC board's view: how about some share options in a very big firm, major cash from Oceanagold shares sold, to be used for the next foray. There are tons of explorers and small-midcap producers, all looking for skilled and well-connected board members at some stage in their growth. Why stick with one company? This is the big game that is being played, and we are but pawns- (there's the germ of a good line).

Mick Wilkes says OceanaGold is on the acquisitions trail itself. OK - which firms, whose war chest, and what does the board say about this plan? It's like a spread of tin foil sprayed out behind a WWII bomber, to confuse the radar.

Vtrader

20-04-2011, 11:02 PM

Another perspective?
ASX data.
http://i949.photobucket.com/albums/ad333/VtraderNZ/OGC_20APR.jpg
V.

elZorro

21-04-2011, 11:54 PM

Interesting EWT chart, Vtrader. Especially if a 1,3,5, leg follow.

Easter is upon us, have a good break everyone.

I found this gem on takeovers: (http://www.cbr.cam.ac.uk/pdf/WP363.pdf)

4. Summary and conclusions
Our interpretation of the work that has been carried out on UK takeovers
subsequent to Ajit Singh’s seminal studies is simple. Singh’s initial insight that
the stock market was a very imperfect vehicle through which the natural
selection process could be carried out has been supported substantially by
subsequent work. This is most striking in relation to the inability to distinguish
acquired companies from the rest in terms of their underlying profit or share
price performance. Equally, there is very little evidence to support the view that
the shareholders of acquiring companies should be motivated to support
management who wish to carry out takeovers, on the grounds that they were
extending their superior management skills to underperforming companies.
Both the short-run and long-run share price impacts suggest that takeovers, on
average, substantially worsen acquiring company shareholders’ wealth. The
evidence on profit impacts have become somewhat more positive over time, but
depend critically on whether the period is before or after the major accounting
standards changes affecting takeovers, and on whether cash flow or other
methods of profit measurement are used.

The takeover process as a whole seems to be characterized more easily in terms
of either the pursuit of managerial self-interest or in terms of the hubris
hypothesis proposed by Roll (1986): ‘If there really are no aggregate gains in
takeover, the phenomenon depends on the overbearing presumption of bidders
that their valuation is correct … there is little reason to expect that a particular
individual bidder will refrain from bidding because he has learned from his own
past errors’ (p. 200).

Of course, it may be the case (as the current authors have heard argued in each
successive takeover wave that has occurred) that the latest wave will be
different from those preceding it. Lessons will have been learnt, and the nature
of the takeover process will have changed. In terms of regulatory reform and
change, it does not seem as though the nature of the process has changed
dramatically despite the extent of changes we have noted in this chapter.

Nevertheless, the latest version of the ‘hope-springs-eternal’ argument is to be
found in claims at the time of writing that the role of private equity in the latest
wave will show substantial gains from takeover. One of the virtues of proposing
this view while a wave is in progress is that it is difficult to evaluate the claims,
because the current wave is invariably not the one that features in the current
academic literature. This is partly an effect of the lags in the publication of
academic results, but also of the need to allow a number of years to pass to
enable the estimation of post-merger performance effects. It remains to be seen
whether in five or ten years’ time, when the dust has settled on the private
equity boom, whether the conclusions that Ajit Singh drew in his original work
will remain true. We repeat those conclusions and endorse them here: ‘insofar
as the neoclassical postulate of profit maximization relies on the doctrine of
economic natural selection in the capital market (via the takeover mechanism)
the empirical base for it is very weak’ (Singh, 1975, p. 954).

The personal trades of the officers and board of a company have to be advised to the market, and here are the recent ones shown on the OceanaGold chart, ASX.
I'm not making any other points about this (employees are offered options as part of their salary), but maybe keeping an eye on these transactions from time to time, will help with timing decisions.

From the trading report out recently:

elZorro

22-04-2011, 12:11 PM

Here is the Board Charter, from the Oceanagold website. (http://www.oceanagold.com/assets/documents/Governance/151204boardcharter.pdf)
Some snippets from that document:

Role of the Board
This Board charter (Board charter) sets out the principles for the operation of the board of
directors (Board)..

Each of the directors, when representing the Company, must act in the best interests of
shareholders of the Company and in the best interests of the Company as a whole...

This charter and the various complementary charters adopted by the Board and Board
committees have been prepared and adopted on the basis that there is a recognition that good
governance and good governance procedures can add to the performance of the Company.

4.2 Role of chairman
In accordance with clause 11.5 of the constitution, the Board has resolved to appoint a
chairman and may determine the period of office.

The chairman in place from time to time will be selected on the basis of relevant experience,
skill and leadership abilities that the Board recognises from time to time. The Board at the first
board meeting following each annual general meeting will consider the position of chairman. It is envisaged that the normal term for a chairman will be a period of five years subject to satisfactory performance. (Note, Mr Askew was appointed Nov 2006, the AGM is set for early June 2011.

4.3 Specific duties of the chairman
The chairman will:
(a) chair board meetings;
(b) establish the agenda for board meetings, in consultation with the chief executive officer
and company secretary;
(c) chair meetings of members, including the annual general meeting;
(d) chair the Remuneration and Nomination Committee; (Mr Klein has this position)
(e) be the primary spokesperson for the Company at the annual general meeting. The
chairman and the chief executive officer will agree between themselves as to their
respective roles in relation to all meetings (formal and informal) with shareholders and
all public relations activities;
(f) in consultation with the chief executive officer, approve or delegate authority for the
approval of all material to be submitted to the ASX, and other investor and shareholder
releases;
(g) be the primary channel of communication and point of contact between the Board (and
the directors) and the chief executive officer;
(h) be kept fully informed by the chief executive officer of all material matters which may be
relevant to directors, in their capacity as directors;
(i) in conjunction with the chief executive officer and other appropriate members of senior
management, review all matters material to the interests of the Company;
(j) provide guidance and mentoring to the chief executive officer;
(k) chair the chief executive officer evaluation process through the Remuneration and
Nomination Committee; and
(l) ensure the periodic process of Board evaluation is conducted.

Independence of directors

There is a range of possible standards for determining independence depending on the
circumstances – few of these tests have the force of law. Whilst not exhaustive, the standards
set out below are the most important ‘guidelines’ and reflect the fact that Australian practice is
tending towards soft rules for determining independence as opposed to hard and fast ‘set and
forget’ rules.

The Board is free to adopt whatever standard of independence it considers appropriate.
However, the Company is required to report (in its annual report) the extent of non-conformity
with each of the standards of independence listed in Box 2.1 of the ASX Corporate
Governance Council Best Practice Recommendations, if it is the case, and explain why it has
adopted a different test.

New standards of independence are emerging in Australia and overseas that will impact on
the perception of who can be characterised as an independent non-executive director. The
issue of ‘independence’ is fluid and emerging relatively quickly. The following questions have
been adopted by the Company to assist in defining independence. However, the Company is
not proposing to adopt hard and fast ‘set and forget’ rules.

gonzo56

27-04-2011, 01:13 PM

People get stressed out by this stock so quickly!
There should be a jump in SP when the 1stQ report is out.

adamcz

30-04-2011, 06:45 AM

Anyone out there got any views on the results? Myself, im pretty disappointed costs continue to increase and are now already higher than the expected range for the year. Hope that they can work to reduce these costs however i suspect we will see further increased costs for the next quarter.
On the upside the gold price moving higher with a $30 gain so far tonight. Really need to start hearing about more progress on didipio before we get some decent gains on the SP

elZorro

30-04-2011, 09:59 AM

Hello Gonzo and Adamcz, I haven't had a good look at the quarterly report yet, but I wasn't expecting much change to the positive side. A lot of gold miners are also in the doldrums while the US$ PoG increases, but perhaps we'll need to look at the bottom line returns to see why that is. I'm going to look back over the annual reports if I can find all the data (read a Buffettology book last week!).

But I also think there is another very important layer behind these mediocre results. OGC is run by the board of directors. The chairman of the board mentors, gives policy to, and ultimately hires and fires, the CEO. I haven't stated it bluntly, but going entirely from what I could dig out from google, I think Jim Askew is going to be replaced as chairman by Jake Klein in June this year. I also think that Mr Klein already has a lot of power on the board of Oceanagold. I read another (older) book last week where the authors had 30 years of experience in the NZ sharemarket, and they stated that in general, board members and top level executives have a similar agenda to ordinary shareholders, they will play the market for profit. Insider rules are not that rigid, and there are ways company insiders can buy/sell discreetly, or control the share price through company direction.

Here's just one scenario that could be on the cards:

Jake Klein sees a 20 bagger price ramp with OGC, gets onto the board most of the way into it, with the promise of fund capital that OGC will be needing - capital for old debts (Convertible notes were due soon, but few were cashed in) and Didipio. He has also got himself into a really good share position in Conquest Mining, and as a sweetener Jim Askew is there too. Mr Klein can own up to 7% of Conquest, with his options. Note that according to the annual report, insiders own or control only 3 million odd shares in OGC, Mick Wilkes buying 15,000 on the records, a trifling amount, and Jake Klein showing none.

Now if sometime after June OGC merges with Conquest, (and it would be good if Conquest shares ramp up a bit and OGC stays where it is), Mr Klein and Mr Askew would automatically get some cheap shares in the new venture, and Didipio would be getting closer to production. Then we'd see ramping of the new firm, and a merger saves on paying tax, compared to a takeover or buyout.

OGC at its recent peak was still not highly valued compared to its reserves and resources, but has some long-term debt on the books and a higher recovery cost than miners with a higher valuation multiple, giving it an average ROI, at least for now. If a merger is being planned with Conquest or some other company of mutual interest to the board, it would be a better deal for investors in the target company if they get a relatively high valuation, while OGC has a lower one than normal. We're talking millions of dollars of extra profit here, life-changing stuff.

Supporting my scenario, Didipio - which had been pushed away to restore confidence in OGC - was dragged back out again and then immediately funded with shareholder dilution in advance of the costs. The big players who bought the new CDIs and shares haven't done too well since, just like the rest of the shareholders. Predictably, the Philippine locals used the opportunity to put out press releases and bring forward a court case. Dipipio might not return a great deal of income to OGC once the capital has been repaid, but it would give a foothold in the Philippines that could be very useful. And of course the average cost of gold recovery will drop.

Meanwhile gold output has "stagnated" in NZ. This is partly because the Macraes policy (or need?) is to widen the opencast pits, meaning lots of overburden for awhile, with higher costs and less millable grade supplied (an educated guess).

Imagine how the new OGC outfit will look in a couple of years, with cheaper average gold output from increasing and better-graded reserves in NZ, copper credits, and Didipio output, along with extra permit areas and gold output from any merger. By then, OGC would be well and truly on the radar of much bigger companies like El Dorado, and Mr Klein knows how to handle that.

Maybe we should buy some CQT: although no options have been picked up in this quarter, plenty are sitting there at prices around half the current SP, earliest expiry sometime in 2012. This company does seem to have plenty of good news too, and friends in high places..

In January 2011, Conquest drew down on its $6.835m Performance Bond Facility with Macquarie Bank Limited. The facility was established in December 2010 (but not used) to cover environmental bonding obligations at Pajingo. This facility allows Conquest free access to $6.835m of cash which was previously held as restricted cash.

geezy

30-04-2011, 03:10 PM

elzorro , perhaps its time for u to create another thread for CQT?

elZorro

30-04-2011, 09:19 PM

elzorro , perhaps its time for u to create another thread for CQT?

Hi Geezy, well, I started one, so you have to post the first reply? We have until Monday to decide if it's a good bet..
Cheers.

This is part of the text from a press release in 2010. Here is the rationale for increased costs in 2011, and note expensing out of the overburden at both Macraes and Reefton will be a large cost in each quarterly report, which will keep net profit down. Perhaps mining companies everywhere are taking advantage of higher prices to increase overburden removal, while the effect on their books is partly masked (note Caterpillar had better than expected profits, just released (http://www.miningmagazine.com/panorama/caterpillar-announces-quarterly-results)). It will mean that future years will be more profitable, with easier access to higher grade ore. Meanwhile, don't expect too much capital gain from your shares?

Operations and Production Guidance

The exploration programs in New Zealand over the past twelve months have been successful in expanding the resource and reserve base. In line with Company practice, an updated resource/reserve statement is expected to be published by early February 2011, which will utilize US$950 / oz Au and the same cut off grades as used in the previous estimate for the calculation of reserves. Consistent with earlier statements, OceanaGold expects to further expand the reserves across the New Zealand operations net of mining depletion for the second year in a row.

The approved FY2011 operations plan provides for an increase in the mining rate at both the Macraes and Reefton open cuts in order to remove adequate overburden to maintain access to run-of-mine ore. A new excavator and two new trucks will be commissioned at Macraes to assist increasing total mining to 59million tonnes (from 52 million tonnes). Reefton will also receive additional equipment to facilitate an increase in movements from 15 million tonnes to 20 million tonnes. This is part of an overall strategy to ensure that the New Zealand business remains robust for years to come and that the mine life increases out to 7-8 years.

The increased movements will result in higher amounts of expensed overburden stripping and thus cash costs are expected to increase in FY2011. Under our current mine plan, costs in FY2012 are expected to reduce slightly and then in FY2013, decline significantly to below US$400 per ounce on average across the business due to the commencement of gold and copper production from the Didipio project in the Philippines.

FY 2011 Production Guidance has been set at 260,000 - 280,000 oz Au @ cash costs = US$ 645 - $685per ounce. Jim Askew, Executive Chairman commented, “The decision to increase the mining rates at both the Macraes and Reefton open cut mines is important to ensure a stable operating platform over a longer mine life in New Zealand. With this extended mine life, capital can be allocated more efficiently when managing operating fleet requirements to maintain the highest level of mining efficiency at the operations.”

Mr Askew went on to say, “While costs are expected to increase this year with the increased movements, this can also be attributed to some creeping of input costs such as diesel and labour, in addition to the strengthening New Zealand dollar against the US dollar. In spite of this, strong gold prices continue to drive expanding margins and healthy operating cash flows which will continue to underpin the business as we execute on our long term growth strategy.”

The ODT has a new once-over-lightly article on the last quarterly report (http://www.odt.co.nz/news/business/158316/miner-reaps-benefit-demand-and-high-prices). You can't dress this up too much as far as an investor is concerned. Turning a small loss into a small profit, when you have hundreds of millions of dollars invested, is not a big ROI (but it's acceptable for one quarter). They are also on target to produce 260,000oz for the year, right at the bottom of their stated range.

Now if OGC were at the same time working on an additional autoclave, or adding to its capacity as an imperfect alternative, I'd be much more interested. But why do that this year? Instead, this could be the year of the "we have found a great deal for shareholders".

Here's a list of some research reports on Conquest Mining (http://www.conquestmining.com.au/reports/broker_research.phtml), from their website. The second one down suggests over 80c is a target for CQT shares, within 12 months.

On the Oceanagold website, you won't find a research list like that (Conquest paid for at least one of theirs and published them). Unless you count OB Research, who over the last few months said it wasn't a buy anymore, and when it dropped to hell, it became a careful buy again. But no in-depth recent research on Oceanagold is provided on the net, at least that you can view for free. Unless anyone else has found something..

Found this early April mini report from Citigroup (http://www.scribd.com/doc/52459295/SECTOR19-20110406-29786), who have to confirm that they also act for Oceanagold and Southern Cross Media (and staff have connections to holdings in QRX). Note what happened to OGC on the ASX around this date, 6th April. For once, the ASX led the OGC price with a rise for a few days before settling back. Must be a few reading these reports.

Bottom Up Valuation
Our bottom-up valuations of the small caps deliver an average total return of +14.5% for the year ahead. Whilst not a stellar return in the context of last year for the Small Caps, within that return we forecast strong returns from Capital Goods(+23.5%), Consumer Staples (+22.3%) and Financials Ex-REITs (+22.0%) in theIndustrials. Although we view the Small Resources as relatively expensive from atop down point of view, we do see pockets of value. Gold (+37.5%) in particular looks attractive.Using forecast return as the benchmark, our top picks in the Industrials areQRXpharma (+52%) and for a lower risk play we like Southern Cross Media(+52%). In the Resources we prefer OceanaGold (+89%). See table below.

This 2007 article on Reefton (http://www.contrafedpublishing.co.nz/QM/Reviving+Reefton.html)is still interesting: Steve Orr had very high hopes for Didipio.

elZorro

03-05-2011, 08:00 AM

Gold pushed up strongly overnight, staying above 1500 no problem. Again, no good news of any kind to report on OGC, it is still subject to selling on the TSX.

Things shareholders should ask of Darren Klinck:

All those exploration geologists at Macraes and Reefton - how about some drilling results?
New website layout - explain the loss of the old presentations and ho-hum treatment of each mine's prospects in the wording
Why is a stable, not increasing gold output from NZ the new policy?
Changes to corporate policies, were there any recently?
Is there going to be a change of chairman in 2011?
Is there a merger or acquisition target, and the timing for this?
Can OGC pay for a current analyst report on the business and post it on their website?
Please supply a list of options available and annual payments to, each board member.

Here is a list of some Nov 2010 EV/gold resource figures. Some familiar names there, and Phoenix Gold is the lowest one (PXG). Might be worth a look. It's a minnow, 10M of MCap. What is OGC's, with about $700M EV? About 75 on that chart, so still extremely low compared to many. Doesn't stop the selloff, and management and the PR dept of OceanaGold appear to be doing nothing to stop this result.

The inescapable conclusion for me, at least, is that insiders are behind the current decline of OGC's Mcap. The insiders don't have a heavy weighting in OGC, their prospects are elsewhere for now.

Just googled up this old article from Resources.com. Remember the date, it's just one month before Paul Bibby left for 'personal reasons' (and a few months after the Conquest takeover by OGC board members), and went on a job hunt for awhile. Here he is talking on the side of a conference to a reporter.

OceanaGold may go on the acquisition trail

Ross Louthean — 4 August 2010

The growing cash position for OceanaGold Corporation (ASX, TSX & NZX: OGC) may see the company consider going on the acquisition trail with the likely quarry being a company in the Pacific Rim, with an Australian miner a likely candidate.

These points were made by chief executive Paul Bibby to NZResources.com after his presentation at the Diggers & Dealers Forum in Kalgoorlie which this year has attracted a record crowd of 2,200, with the restriction still being the limited accommodation in the Kalgoorlie district.

Bibby said there was now an opening for mid-tier Australasian gold producers to grow with the void being made in the higher ranks with the takeover by Newcrest Mining Ltd of Lihir Gold Ltd.

Now that OceanaGold is unhedged it has the capacity to generate per annum up to $US100 million ($NZ130.4 M) in cash flow, and with another 900,000 ounces added to the resource inventory at the New Zealand mines there was a capacity now to look at mergers and acquisitions.

The presentation showed OceanaGold has cash of $US37 M ($NZ50.4 M) and had earnings before tax and other outgoings of $US39 M ($NZ53.2 M) in the June quarter.

Apart from now benefiting from being unhedged Bibby said that improvements in the milling-processing area had seen recoveries improve by 2% -- an important boost to the bottom line.

The flagship Macraes open cut operations today are focused on the big Frasers open cut which, based on current reserves would have a mining life out to 2016. To date mining on the Macraes Shear system has been mined for only one-third of the 38 kilometre long mineral trend. Frasers Underground which now produces between 60-70,000 oz pa has grown dramatically in stature through exploration that has shown deeper and new lateral targets to the east and north east and increasing grades.

Some of the exploration dollars now to be spent in the Macraes area would be to test the depth of the east plunging structure on the completed Round Hill, Innes Mills, Southern and Golden Bar pits. Asked whether the success on the eastern plunge of the Frasers orebody through the Frasers Underground could lead to exploration or development utilising the existing decline mine, Bibby said that may not be likely.

Should there be any new discoveries on those targets, he said, the likely scenario would be a new underground development at those locations. Bibby said the Reefton mine was operating at 20% above nameplate and recent exploration had expanded the longevity of the Globe-Progress mine environment.
There were now 16 geologists and field assistants at Reefton and the company was looking for more geologists.

Bibby said the announced extension of mineralisation at Souvenir and General Gordon should lead to pit extensions for Globe-Progress and assays were now awaited for near-mine targets Target 3, Target 31 and Hard to Find. Sampling was being undertaken on 14 other targets in the Reefton field.

There would also be a deep drilling programme at the old Blackwater mine at Waiuta to probe the extent of mineralisation of the narrow vein, high grade system below the old workings at about 750 metres. Several years ago then company management tried to access the old shaft with a new headframe but conditions were found to be poor and that quest was abandoned.

Of the mothballed Didipio gold-copper project in the Philippines, Bibby said a management team was looking at re-opening options. The company had spent $US80 M ($NZ109.1 M) to date and placed the project on care and maintenance with escalating costs that showed a further $US160 M ($NZ218.2 M) may be required, about the time of the global financial crisis.

Bibby said the Philippines Government had renewed the mining licence last year.

Mick Wilkes has speedily been invited to the boardroom table as a managing director. Would this mean that instead of just being an observer in board meetings, he will have a vote? Hmm. Can't see that Paul Bibby or Steve Orr had a vote during their tenure, I think they stayed as CEOs. The board now comprises 7 members, and Mr Askew would have a casting vote should anyone have to abstain from voting, and there was a split decision..

Apr. 28, 2011 (Canada NewsWire Group) --

NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES AND NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES

MELBOURNE, April 28 /CNW/ - The Board of Directors of OceanaGold Corporation (ASX: OGC, TSX: OGC, NZX: OGC) ("the Companyhttp://images.intellitxt.com/ast/adTypes/mag-glass_10x10.gif (http://www.istockanalyst.com/business/news/5094558/oceanagold-corporate-update#)") is pleased to announce that Mick Wilkes, CEO of the Company, has been appointed to the Board of Directors. Effective immediately, Mick will assume the role of Managing Director and Chief Executive Officer of OceanaGold Corporation.

elZorro

04-05-2011, 01:50 PM

This is a sample of the merger activity (http://www.resourceintelligence.net/gold-merger-wave-builds-with-avoca-deal/11547)that is going on with miners the size of OGC.

I've had a change of opinion on possible M&A timing for OGC: would it not be better for the established Chairman to bring any deal forward before the AGM? That would mean soon.
I've written out some figures on the back of an envelope. Note: this is all completely supposition, just playing with numbers.

As Conquest is valued at 50% of Oceangold by the market now, then a merged company would have an Mcap of A$1billion today. 1/3 to 2/3 contribution in capital, means that as CQT has about 600mill shares including options and OGC about 300mill including convertible notes, and there would need to be another say 150mill shares in OGC issued for the appropriate payoff to CQT shareholders, maybe a 1xOGC for 4xCQT or perhaps a 2 for 9 share swap.

At the end of this, if the market thought all was OK, OGC shares would still be worth A$2.60 or so.

If the conservative 2 for 9 deal was used (and this is all hypothetical) Jake Klein's 27 million options for CQT would yield exactly 6 million shares in the new entity, say worth A$15.6 million. But the cost to exercise the options (not vested, but here are the conditions (http://www.abnnewswire.net/press/en/62409/Conquest_Mining_Limited_(ASX:CQT)_Appoints_Jake_Kl ein_As_Executive_Chairman.html)) is only A$8.1 million. Not bad- A$7.5 million profit if the new entity holds its own, and it could do a lot better with all the horses working in the same direction.

elZorro

05-05-2011, 07:36 AM

The gold price has dropped back a bit, so you'd expect OGC to go with it. It's holding at about $2.60, still with some evidence of shorting on the TSX. Have a look at this chart of OGC against the gold price for the last 6 months. It looks to me like the shorting started in earnest in late January, and since then OGC's price has remained around C$2.60. OGC has not behaved as though it was linked to the gold price, although recovered output is stable and profits are increasing. Around C$2.60 is the same figure a self-proclaimed short trader was mentioning on the Stockhouse thread. Perhaps the intention is to provide a stable but low valuation price for OGC's shares.

Copper the new gold: (http://dcnonl.com/article/id44185)here's something for Mistymountain I think. Dipipio is a copper/gold area, right in the sweet spot for the future.

mistymountain

05-05-2011, 09:46 PM

Hi EZ

Had to respond... been out of home due to chch EQ. Been following your brilliant analysis, POG, OGC SP and announcements with interest since tho.

My original sentiments from last year still haven't changed given OGC's potential upside for gold production here in NZ and Didipio. POG approaching the $1600 I predicted. SP lagging but holding. Once profits become more sustained with the hedging now removed 12 months ago I'll still say this company still has significant good news to come.

The copper will indeed by a bonus...
Cheers!

elZorro

06-05-2011, 07:41 AM

Hi Mistymountain, sorry to hear it sounds like your house was damaged, trust that can be sorted out in due course.

Well, I'm feeling more like a chump actually, as if I can believe my research, then it follows that we have been watching and commenting on OGC's shareprice for over three months, when the shorting interest on the TSX is so strong and with such a single-minded intent, that there is no way it is going anywhere until a deal has been proposed and put on the table. Period. I tried to find the level of shorting from the TSX data, looks like a paid subscription is needed. Anyway I'll wait to see what happens between now and the AGM.

Since 2004, Jake Klein and Nicholas Curtis (both ex Sino Mining) have been involved in the board of Lynas Corp (LYC). This is a A$3.4billion company, holds the largest resource of rare earths in the world yet known. They will start production in late 2011, sending concentrate to a plant in Malaysia. Klein has been on the board since 2004. Curtis owns a good chunk of the company and is the Chairman. Despite all these board positions and interests, Klein and Curtis (both on the board of Conquest) have recently listed a new company called Forge (FRG) and are putting up a proposal to LYC (http://www.theaustralian.com.au/business/opinion/lynas-forge-deal-raises-issues-of-conflict-of-interest-disclosure/story-e6frg9if-1226044682093)to pay for the rights to some of the tenement there, to mine phosphate and other side minerals. A special board had to be convened to consider it, as the mutual interest and the net advantage to Mr Curtis is significant, $30 million. Looks like it is a reasonable deal considering the unknowns, but of course LYC has not asked for external tenders from other miners for the same resource.

Forge will need to find a lot of funding to mine this resource if it goes through, but no doubt they have the contacts. All these interconnected companies are stretching my brainpower, it must be tricky figuring out which company's interests are being served with each decision.

But each time I'm seeing more likelihood of some kind of a deal being put in place for OGC.

elZorro

10-05-2011, 06:39 PM

Here's a bit more detail from the Greymouth Star: short-term pain for long-term gain at Reefton, says Jim Askew. (http://greystar.co.nz/content/oceana-plans-expansion)
This is all good timing if you want to hold the shareprice back a bit, while gold soars (or maybe it has soared already). As I first figured out a year or two back when looking at the resource chart for OGC: they have billions of dollars of gold in the ground. It's not going anywhere, that money is still for the taking at a later date. They don't pay shareholders a dividend, so shorter-term investors will look for a capital gain in the price. Nothing doing this year or next year, according to the press release. And shorting on the TSX has even removed the thrill of seeing the shareprice go up with gold. Maybe our best chance is that insiders will want to do a deal, and have been beavering away to set one up (with a finder's fee or two attached). Interesting to note that both Conquest and OceanaGold have set targets of mining 500,000oz a year in the past.

elZorro

10-05-2011, 11:38 PM

On the ASX is a file with the OGC AGM voting data (3rd June). (http://www.asx.com.au/asxpdf/20110510/pdf/41ykw9yhlqh5k0.pdf)

Here's what I've seen so far:

The governance rules have been changed, the Chairman of the board no longer has to chair the Remuneration and Nomination Committee. That clause is now missing in action, Jake Klein chairs the committee.

Mick Wilkes is nominated for the board's next term. The number of members will go back from 7 to 6, so Mr Fern is gone. There are no spares to vote on, regarding members of the board.

The total of fees to the directors is now capped at A$550,000. Directors would like this increased to A$830,000, about a 50% increase, now that's inflation, but relatively small beer.

They want to ditch the Restricted share plan for insiders, where shares took 3 yrs to vest. The new Performance Rights Plan vests in 3 years, but is adjustable by the board later, without shareholder approval. Don't worry, the maximum no. of shares that can be reserved for any one "designated participant" is still no more than 5% of the total company shares, in each year, and 10% across all annual reserved shares. The board sets the performance criteria, and that is also adjustable (moving target milestones). I'm unsure if these shares are free once earned, or if the price is locked by market prices at the start of the performance year. Some help here please. We can write to the company secretary to get a copy of the rules for this setup. Too sensitive for the internet?

On page 12, specific mention of options treatment under a M&A situation is made (clauses (i) and (ii)).

I'd think these resolutions will be passed with Jim Askew at the chair, and during the next board meeting (they have several) Jake Klein will become Chairman.

At balance date, Jim Askew had over a million OGC shares, Jake Klein had about 67,000.

OGC could be a bigger pie soon, but insiders will be wanting more of it.

gonzo56

11-05-2011, 10:36 AM

Word on the street is someone is exploiting the stop losses on the asx...
I read it at www.hotcopper.co.nz (http://www.hotcopper.co.nz/search_do.asp?fid=1&symbol=1727)

elZorro

11-05-2011, 11:05 AM

Word on the street is someone is exploiting the stop losses on the asx...
I read it at www.hotcopper.co.nz (http://www.hotcopper.co.nz/search_do.asp?fid=1&symbol=1727)

Hi Gonzo, did you mean this post?

re: is this one of the most manipulated stocks asx (googs61) (http://www.hotcopper.com.au/user_profile.asp?uid=160498)
Forum: ASX - By Stock (http://www.hotcopper.com.au/posts.asp?fid=1) (Back (http://javascript<b></b>:history.go(-1);)) Code: OGC - OCEANAGOLD CORPORATION (http://www.hotcopper.com.au/search_do.asp?fid=1&symbol=1727)
Post: 6695744
Reply to: #6695384 from jvegas (http://www.hotcopper.com.au/post_single.asp?fid=1&tid=1455681&msgno=6695384) Views: 79 Posted: 10/05/11 15:44 Stock Price (http://www.hotcopper.com.au/stockprice.asp?symbol=1727&msgid=8270181) Sentiment: LT Buy Disclosure: Stock Held From: 58.107.xxx.xxx << Previous Post (http://www.hotcopper.com.au/post_single.asp?fid=1&tid=1455681&msgid=8269768)Next Post >> (http://www.hotcopper.com.au/post_single.asp?fid=1&tid=1455681&msgid=8271554)blatant for mine ....the next in line to be taken over on the ASX, i had a stop loss @ 2.37 and pulled it just in time..somebody wants my shares...:D

only 2000 sHARES traded @2.33 then up she goes..I'll think i'll just ride this one out..too much potential upside with POG and didipio(?)and MA activity!

Another: I got stopped out at 2.42. I know for a fact that there were a lot of stop orders at 2.40. Someone obviously got wind of this and exploited it. Im so sick of playing this rigged market. Ive made more $ playing poker in the last 12 months than I have from trading...and Im supposed to be a full time trader

It's starting to look obvious to many, but I still think the major shorting of Oceanagold happens on the TSX. I don't think the intention is for OGC to be taken over right away, it's more a one-two punch: insiders want to get the company to the size of 500,000oz, and then it will be courted by the bigger outfits no problem, for $2-$4 billion plus. So of most interest to them, is how to get themselves heaps of shares in the company now, for the least capital outlay. Nothing trickier than that. We're talking mergers (preloaded targets that are highly valued), clamping shareprices in the main company vehicle in the meantime, options, and performance shares. (They) are working on all four ideas I reckon.

Would someone who has knowledge of boardroom politics post their thoughts? Is this the likely situation, or is it more like "Tell 'im he's dreamin'.."

gonzo56

11-05-2011, 12:51 PM

Hey, yeah I did mean that one.

"...So of most interest to them, is how to get themselves heaps of shares in the company now, for the least capital outlay." When is enough enough?

I too would like to hear from posters that have experienced this activity in other companies.

elZorro

12-05-2011, 07:47 AM

Hey, yeah I did mean that one.

When is enough enough?

I too would like to hear from posters that have experienced this activity in other companies.

Here's a new thread for OGC on Hotcopper (http://www.hotcopper.com.au/post_single.asp?fid=1&tid=1456584&msgid=8275271), maybe it is someone like MistyMountain writing to the company and suggesting the company can now afford to pay out dividends as the PoG increases. Good on that person, for sending something in. Further on, the poster notes the proposed director fee increases, but also the lower shareprices that have resulted, even after a 600% increase in gross income.

This poster is ignoring or missing the main point: now is not the time to allow OGC to shine - insiders are not loaded up with shares yet, and they don't even want to buy at $2.45, they can get them cheaper than that by bringing through a merger, or organising their own share allowances.

Meanwhile the plebs (shareholders who voted these people in - or did we never get a choice of board members, that's more like it -) must wait until all the ducks are lined up. How is it that well-connected individuals owning just a small portion of a large company can have all this control? It's staggering to observe.

A mate of mine has reserved 750,000 shares in Oceanagold for me, with the price fixed at the current low. I don't want to pay for them now, maybe in a year or two. I have a fairly good idea that by the time I pick them up (or not, at my option), the shareprice could easily be doubled from its state today, which will provide me about $2.5 million easy profit when I sell them. My mate created these shares out of thin air, and the only catch is that when I turn them into real shares by paying for about half their current value, all the other shareholders will get their shares diluted. Who am I? (http://www.asx.com.au/asxpdf/20110512/pdf/41ymbkrctbzw55.pdf)

Ah yes, it's all fun and games, except for the ordinary shareholder. I was unsure of the word "pleb" but it looks bang on in my case.

Definition of pleb - common language -

1) one whose inferior intelligence results in them making a complete titface out of themselves in public

2) one who has had their brain replaced with a small cucumber whilst visiting the doctor for a routine check up

St James Square

13-05-2011, 04:24 AM

For the past two years, I have been actively trading gold and its related stocks - explorers, miners, etf's and the hard commodities. This has largely been driven by macro-economic factors. QEII and the soon to be announced QEIII mean Gold is now a one way beat - Up. Further any weakness in China, additional sovereign crisis support my investment thesis, Gold has to keep going north.

Trading Gold and the miners has been a great bet to date and one which I will continue with. However OGC has to be one of the weirdest stocks to follow, it has little correlation with direct comparisons, has nothing to do with price of gold. And corporate announcements fail to move share price. For a stock with a very diverse shareholder base, this really leaves me scratching my head at times. I could completely understand this if, one party held 35%+.
This message board like other has been interesting and given the operations are essentially NZ based, I would have hoped to pick up on info which is closer to the mine face but which we get very little from.

My view is this share price is being manipulated and pushed well down. Any bottom-up analysis, any true fundamental researcher, anyone who can see the amount of resources on the balance sheet, will tell you this stock is worth well north of CAN$ 3.50. Yet no one has noticed this South Pacific gem.

This leads me to conclude that the level of shorting is has to be driven by higher forces (shorting summary attached). I note since Sept, Baker Steel Capital has grown its holding from 2% to 6%. I wonder how much additional shareholding can be built up, on the cheap.

My view is OGC is to be treated with suspicion. The multi listing of the stock cannot help. If you drive it down in one market and buy on weakness in another are you breaking regulatory rules and is anyone monitoring this kind of activity (I doubt it)??

That aside the, one can hope that another miner, another hedge fund, another investor with big balls and lots of money will spot OGC for what it is - A grossly undervalued gold mine, in the truest sense.

I’ll be buying back in sub CAN$ 2.25 but have a very keen eye on the shorting and a very keen eye on volume.

elZorro

13-05-2011, 01:13 PM

Thanks for the post, SJS. I checked about Baker Steel, they have reduced their holdings by about 1 mill shares between Sept 2010 and Feb 2011, but do have 6% or so. Baker Steel have 6% of CQT as well, latest report from there (http://www.asx.com.au/asxpdf/20110513/pdf/41ymqpljn0fllj.pdf)shows a graph of where CQT is going, into an area of Mcap just above Oceanagold's. They suggest that just getting their mines going will do it, by late 2013. If they're in a hurry, a merger would be quicker though.

OGC did follow the gold price for bursts of time, but share dilution and shorting has affected it, along with bad press. When it was down on its knees at $50mill, late 2008, opportunists got in there (certainly some insiders too), and it was not shorted on its way up to A$4, not much anyway. But around the time Paul Bibby left (Jake Klein had been on the board for awhile by then), things started changing a lot, and those not aware of the board moves in advance were caught with ever lower shareprices. It's only when you consider inside deals that might be available, that the pattern makes sense.

SJS, I couldn't see the shorting summary, can that be expanded on? Is there any way to trace shorts?

geezy

13-05-2011, 03:27 PM

I cant seem to understand the way the SP is going with POG still sitting quite firmly at 1500, but something does not seem right .

Thanks for the post, SJS. I checked about Baker Steel, they have reduced their holdings by about 1 mill shares between Sept 2010 and Feb 2011, but do have 6% or so. Baker Steel have 6% of CQT as well, latest report from there (http://www.asx.com.au/asxpdf/20110513/pdf/41ymqpljn0fllj.pdf)shows a graph of where CQT is going, into an area of Mcap just above Oceanagold's. They suggest that just getting their mines going will do it, by late 2013. If they're in a hurry, a merger would be quicker though.

OGC did follow the gold price for bursts of time, but share dilution and shorting has affected it, along with bad press. When it was down on its knees at $50mill, late 2008, opportunists got in there (certainly some insiders too), and it was not shorted on its way up to A$4, not much anyway. But around the time Paul Bibby left (Jake Klein had been on the board for awhile by then), things started changing a lot, and those not aware of the board moves in advance were caught with ever lower shareprices. It's only when you consider inside deals that might be available, that the pattern makes sense.

GR8DAY

18-05-2011, 12:36 PM

elZorro

19-05-2011, 01:25 PM

.......looks like someone's just suffered a melt down and bailed!! (at 12:21) to be precise. Pleased I also "bailed" at $4.20 (took a $5k hit to my profits).........OGC surely has to be seriously undervalued now, but then what do I know! That wasn't you was it Elz??

No, It wasn't me, have been away from the computer for most of the week, sending this from the ferry. I will buy more OGC when it's stopped dropping, if that's what it's doing..you did well to sell a while back. Cheers.

GR8DAY

19-05-2011, 04:06 PM

elZorro

21-05-2011, 09:20 AM

cheers Elz. Not sure if taking a $5k hit is doing well but I guess I could have done a lot worse. Looks like a little strength showing today.......perhaps they have bottomed out now? I might just "dip my toe" once again and see what happens. Hope alls well.

Hi Gr8day, last week was just a sales trip and to visit family and friends in S.I., all good.

More people on Stockhouse saying OGC is too low, how can this be? I received the voting papers last week, for the AGM. Wish I had enough shares to scupper most of the voting clauses. Giving the board all of the rights implied could eventually hand over the business to board members for a song. They could give themselves heaps of performance shares, set up cheap options at low times for the share, etc. Don't forget that having NZ's gold output stagnant or decreasing is as simple as ordering more overburden to be stripped in a given year. The board is in total control of what the company looks like to the outside world, including a very modest and tempered down website, and very few press releases at the moment. Have a look at this very poor precis of OGC's history from the website. (http://www.oceanagold.com/about-us/history/)

If I'm right, and we have a new board chairman soon, we might start to see the big plan in action, and I think it will be very favourable to board members and key staff if we have a good look at it. Once this has all been ratified, the share price should miraculously improve.

Ross Louthean (NZResources) has also read the documents for the AGM, but has looked purely at the mining data. No mention of the money-grubbing ideas from board directors.

Intricate detail in document for OceanaGold annual meeting

Ross Louthean — 11 May 2011

A weighty document with amazingly detailed information about probably every facet required for the triple listed OceanaGold Corporation was released to the market yesterday.
While holding detail that would excite few more than corporate lawyers and analysts focused on the New Zealand gold miner, it also had expansive information about performance and exploration and development issues.
OceanaGold (ASX, NZX & TSX: OGC) will hold its annual general meeting in Melbourne on June 3 at which one of the key issues for shareholders will be the re-election of three directors – chairman James Askew, J. Denham Shale and chief executive Michael (Mick) Wilkes who has just joined the board.
In 2010 the company sold 268,087 ounces of gold and had improved cash costs of $US570/oz ($NZ719/oz). The cash operating margin for the year, following the expensive issue of de-hedging was $US763/oz ($NZ949/oz).
Net earnings were $US21 M ($NZ26.7 M) in December quarter and $US44.4 M ($NZ55.97 M) for the year.
With the mothballs taken off the stalled Didipio gold-copper project in the Philippines the company near year end recruited key members for project management and the construction team for a start to detailed engineering design and procurement for the project.
Through the strong build up of exploration in 2010 gold reserves in NZ increased to 2.15 M oz, net of mine depletion.
On exploration at Reefton there was a focus on identifying and interpreting factors that control the location of mineralisation outside of the current mining footprint.
Multiple targets were identified and scout drilling testing of three targets within 2 km of the Globe-Progress pit resulted in mineralised intercepts.
Meanwhile total material movement at Macraes in 2010 was 50.3 Mt compared with 53.4 Mt in 2009. The 6% lower movement of material of 3.1 Mt was mainly attributable to additional ore tonnes being mined on longer haulage cycle times than for overburden haulage.
Mining at the Macraes open cut was almost completed at Stage Frasers 4C with the Frasers 5 cutback providing the majority of ore by year end. Frasers 4C will be the main ore source for 2011.
Underground mining was planned to continue downdip in panel 2 in 2011. Resource drilling will continue in the downdip area of Panel 2 to convert inferred resources to measured and indicated resources, and ultimately to reserves.
On exploration at Reefton, strong gold-arsenic-stibnite geochemical surface anomalies were identified through sampling in the Big River and Big River South programmes. These are priority drill targets for early 2011.

GR8DAY

22-05-2011, 08:47 AM

elZorro

22-05-2011, 10:34 AM

Hi Elz......you are a mine-field of information! You must spend countless hours researching OGC but sadly all to no avail as far as the SP goes. Personally I have little understanding of the board room developments and as I always do with any share, just track the SP from a distance and try and be patient (as a potential buyer). OGC has taken a real hammering over recent months while the GP has continued to generally improve.....it (the SP softening) just doesnt make sense. Hence I have decided to buy in again.......although tempered with a little caution this time. Wish me luck!

Hi Gr8day, you are not alone in buying OGC, it's been towards the top of the directbroking buy list on average, for the last 2 weeks. I very nearly drove down to Macraes last week, but it was too far out of my way during a short trip. I worry that if US$gold drops away, OGC might fall with it, even though it's at a low valuation. I do try to be patient with shares, but frankly OGC is the one I've looked hardest at more recently, and I'm not the only one who suspects some jiggery-pokey by insiders. If this is the sort of thing that occurs across all listed companies, then TA would be the only way to make a dollar in the short-medium term, as nothing you read about fundamentals of a share, or press releases, could be taken as gospel. That is bad on two counts: I'm keener on FA analysis, and it would mean Phaedrus et al are always going to be more correct, more often, using their charts, even if they know very little about the company.

elZorro

24-05-2011, 02:10 PM

It's about time to send off the AGM proxy forms by airmail, if you want to have a say.

Amendment 3 should be a good thing: looks like OGC want to be in the NZX50 and a dual listing spec might do that (anyone know?). Note that if any deal (like a merger) could involve 5% or more of the shares, and be more beneficial to insiders than an arm's length treatment, the board will have to notify the NZX with the details. But just under 5% of a billion dollar company is still a lot of investment profit.

I'd guess to be fair, amendments 4 and 5 should be allowed to go to completion. It's 6 and 7 I have real issues with, and especially the last one. In this clause, there is what I'd expect to be unprecedented power for the board to set up their own lolly basket at the cost of all other shareholders. Look at the ability to change the rules once this amendment is voted in, without redress by shareholders. The Performance Share Rights Plan - :scared::scared: -this is a recipe to hand over a lot of the company to insiders, and I will not be voting for this clause.

Normally people work for an income, then use their savings to buy shares in a company. Not for the likes of some OGC board members, who would like to gift themselves a heap of shares in the near future, while patently not looking after other shareholders' interests.

I'd like to hear about other's views of the documents.

waterboy

24-05-2011, 03:14 PM

elZorro

24-05-2011, 09:31 PM

I agree with you elz, I have issues with 6 and 7 as well. I know directors have a lot of liability but their ability to pay themselves massive amounts of money through cheap options etc even if the company does not do all that well is ridiculous...I am not just talking about OGC this happens everywhere. Whilst its nice to vote on things like this our holdings are miniscule so your average shareholder doesn't have much power.

On a different note I see michael wilkes has recently bought 15,000 shares at 2.24 (au). What do you make of this does he have inside knowledge about the short sellers, is something good in the pipeline, does he see value ? I will be suspicious if he picks the bottom of the price drop but happy to see it regain some of the recent loss.

Hi Waterboy, we don't have much voting power, but we can post info on the internet, which might be of interest to someone with more votes. I'm not so sure about Mr Wilkes, haven't met him or anything, but I think he's in with the big boys now. 15,000 shares purchased outright, that is window dressing. He has options for 750,000 shares. (http://www.asx.com.au/asxpdf/20110512/pdf/41ymbkrctbzw55.pdf) He will most likely stay a board member, and be a party to the performance shares also. I think those are free, once 'earned'. As ordinary shareholders, we are never likely to see what 'tough' criteria is applied to earn the shares. And these goalposts will be moveable.

I have seen the words 'slick' or 'smooth' applied to Mr Klein. I just have a strong suspicion that when the circumstances are right for the insiders, especially JK, we'll see OGC moving forwards again, and not before. I'd be very happy to be proven wrong on that.

Phaedrus

25-05-2011, 09:38 AM

The downtrend continues.

Note how the On Balance Volume triggered Buy and Sell signals well ahead of the other indicators featured here. (OBV is classed as a leading indicator because changes in volume tend to precede price changes.)

http://i602.photobucket.com/albums/tt102/PhaedrusPB/OGC525.gif

El Zorro, your knowledge of this company and your attention to the detail of their reports is impressive. It must be galling for you to see such meticulous, painstaking research being outperformed by the bluntest tool in the TA toolbox - a bog-standard 200 day moving average. No wonder you are becoming a little discouraged. I believe that in time you will come to see that market sentiment is at least as important as fundamental considerations and that it should most certainly not be ignored.

El Zorro, are you familiar with the Zurich Axioms? http://www.sharelynx.com/papers/TheZurichAxioms.php
How many of these do you reckon you have violated with your OGC investment?

elZorro

25-05-2011, 02:40 PM

Hi, very good Phaedrus, I especially like:

Major Axiom 8 :- On Religion and the Occult
It is unlikely that god’s plan for the universe includes making you rich. Assume you are on your own. Rely on nothing but your own wits.

I thought you were poking the Borax again, not so sure after reading it all. There were some phrases similar to yours. Something about not averaging down..

I have not really looked into the reports for OGC, just skimmed most of them. Which means most traders will never even look at the info there. That's the scary thing.

This market sentiment you're always going on about, I don't think it's the 'market' at all, not in OGC's case. It's what the insiders and large traders (fully informed by the insiders) want the share price to be, assuming no other external factors (like the gold price, plant failure) are acting on the share unduly. It shows up in the charts all right, but if nothing else, I think I can see why the sentiment for OGC is so poor at the moment. Retail traders in all three markets are scratching their heads trying to figure it out, have been for months.

Some insiders ( maybe just one) are probably shorting the share, because they stand to make several million dollars profit from it, by establishing merger targets, options and performance shares in the interim.

Yes, it's frustrating that OGC hasn't behaved as its FA figures would predict. But I have learned that some companies are likely to be run for the benefit of the board and senior staff, not the rest of the shareholders, contrary to whatever they might say in the corporate governance documents. I think that was a useful lesson.

GR8DAY

26-05-2011, 12:09 PM

.......starting to look a little stronger in Oz now?

elZorro

26-05-2011, 01:08 PM

.......starting to look a little stronger in Oz now?

Yes, I'm unsure why that would be, but gold has gone up, and it should take OGC with it. The price is still below that all-important A$2.60 that the shorter was quoting.

I'm keeping an eye on Conquest Mining. Look at this press release today (http://www.asx.com.au/asxpdf/20110526/pdf/41yvvxhd4rz097.pdf): Their Mt Carlton mine is likely to be funded by a bank loan or consortium loan, because the project stacks up so well. This means there is no need for further equity capital raising from shareholders.

What a shame then, that OGC didn't try that option for Dipipio. OGC's shares get diluted, while CQT's shares are left alone. CQT went up 6% in an hour today.

GR8DAY

26-05-2011, 03:51 PM

elZorro

26-05-2011, 06:06 PM

.....wow Oz taking off (up 7.4% as I write).......NZ not far behind. Looks like I might have "dipped my toe" at just the right time.....might go up to my ankle now. Maybe this sleeping laggard has woken again from its slumber??

Gr8day, you do have the jammiest timing, from what I've seen. Now if I wasn't listening to Phaedrus so well, I'd have averaged down a lot more the other day, but I couldn't break Minor Axiom XV. "never try to save a bad investment by averaging down". What happens if you're fairly sure it's not a bad investment though? Hmm.

gonzo56

26-05-2011, 07:51 PM

Youv'e got to remember that Phaedrus focuses on the general trend. So yes OGC may still be in a downtrend, but that doesn't mean it wont bounce up and down within its bollingerband range.
I too tried to put an buy order in on Tue for $3, but when the market opened that sell was taken away and the next one up was $3.19. Congrats to the people whom bought on Monday at 2.97-3.00, quick profit!

GR8DAY

26-05-2011, 07:52 PM

LOL m8......I don't always get 'em right. I do look at charts but not in any great depth......just too damn confusing for this simple Irish brain! However if there has been a long running downtrend on an otherwise perfectly fine co. you've gotta take a harder look at it........and ACT accordingly.......seems to work for me most of the time!

elZorro

27-05-2011, 07:32 AM

Well you do get OGC right more often than me, so I bow at your feet Gr8Day. The interesting thing about OGC now is, will it breach CAD$2.60 if gold moves up from here? Are the shorting interests still at play?
Very low traffic on the TSX for Oceanagold, retail interest is muted after the hammering over there in earlier weeks.

Vtrader

27-05-2011, 02:48 PM

$850K traded on NZX today, EZ are you topping up, or averaging down?
V.

Silverlight

27-05-2011, 02:59 PM

V, 241k of the 267k were international crossings reported here this morning, for broker market share purposes.

Only 26k of real trades today ;)

elZorro

27-05-2011, 04:09 PM

Many thanks for the clarification Silverlight. I always imagine you sitting in a room full of large computer screens..
V: 1/20th of the real sales might have been me trying to get the first cheap shares and paying a bit more, but they were still below my average cost. So technically I did average down a small amount. I will have to do pennance for that I suppose.

And now we wait for good news, the AGM, or gold to go up :)

Hoop

28-05-2011, 01:04 PM

Update from my #629 post (http://www.sharetrader.co.nz/showthread.php?7647-OceanaGold-good-news-from-the-mine/page42) 20 April 2011
My Quote "......If the H&S pattern formation is false and fails to form the share may fall below 2,45 and possibly gap down and test the bottom at the 2.20 area...."

I think I've got the hang of the behaviour with this share now..OGC.ax is a complex TA beast. The chart below may still confuse some but I made it less complicated leaving out much of my last charts lines and that failed inverted H&S formation. Bottoms are often formed during a completed inverted H&S formation and observing the latest formation failure was bad news and the share fell back to the 2.20 marking a lower low.

As with all complexities it is easy to stand too close to the mirror in a crowded room and only see yourself. Standing back here, one discovers that the crowd are using a bear market strategy.
Using the Bear "rule of thumb" that corrections (sucker Rallies) never rise above the previous rally...you can see that investors bail out of the rally to the optimists causing the typical "blow offs" The orange arrows shows this.

Zurich Axiom Rule 2.. On Greed...Always take your profits too soon. Decide in advance what gain you want from a venture, and when you get it, get out. Rule 2 is a bit out of date now with TA indicators overuling...however its still a very potent rule in risky situations and trading in a bear market share is a large risk situation.

A conspiracy theory that a few are keeping the price down??...maybe but unlikely..more likely due to the Mr Market buying and selling in a bear market using its bear market strategies...

Where would Mr Market set his safe sell limits this time around ?? .....2.60 - 2.80 Max?
2.80 is a very important level and one should not ignore.

If Mr Market goes above 300 this time (a higher high) this would signal a weakening of this Cyclic Bear Market.

You may have noticed no volume on the first bear market rally...this can be explained.Its easy to see in hindsight that the Bear market had started but at that time Mr Market noted caution (the peak "blow off") but was not sure..as the waters were muddied so no Bear market Strategy was used.

http://www.imageurlhost.com/images/0snc30khoq2ygza6dxd.png

Disc hold no OGC shares

elZorro

29-05-2011, 12:58 PM

Hi Hoop, thanks once again for the chart. I agree with your point that in the meantime, OGC shares reaching A$2.80 would be time to sell for short-term traders. But only because this lines up with my 'conspiracy theory'. To call this background information a conspiracy theory could mean you would miss out on an opportunity to follow some big money. Have a look at previous posts and you'll see Mr Klein and associates have a well-documented history of making good profits in their business dealings. I suggest to you that if, in the line of your normal work as a company director with several mining firms, you could arrange some synergies that were good for both parties on paper, and coincidentally book a handsome profit, at what level would it become an all-consuming interest?

$2 million? $10 million? There could easily be well over $20million profit at stake here for Mr Klein, with say a Conquest-OceanaGold merger. In the deals that have been done so far (Conquest takeover etc) apart from some mild ribbing in the press (e.g. the very smooth Jake Klein (http://www.highgrade.net/category/China)), it has all been acceptable because everyone got a piece of the action. These deals amount to payment of a finder's fee.

The OGC chart looks close to a double-bottom, but until any deal is announced (I am not certain there is one) I see no reason for OGC to change much, unless gold goes up. That's another reason why shorting looks to be a possible cause for the OGC SP recently: it failed to move higher with gold last time, went the other way. I posted a chart about that. True, many gold miners have dropped back as well.

The AGM on 3rd June will be interesting, as we should expect continuing income to be repaying debt quite quickly, and there have been no press releases to speak of for over a month. Highly unusual for a firm with so many exploration staff, but maybe that's just conspiracy talk.

After the AGM, I predict a change of Chairman to Mr Jake Klein. The board have already changed the founding rules of governance to allow a relatively new board member to chair the powerful Nominations and Remuneration committee. Jim Askew and Jake Klein have worked together on other boards at least from 2007 (http://www.hkexnews.hk/listedco/listconews/sehk/20070305/01862/ewp121.pdf). Also for probably the first time, the CEO (under the control of the Chairman and the board) has been appointed to the board of OGC, and the number capped back at 6 after the AGM. There are no spare directors to vote on, so it's not really a vote, more a fait accompli. The board propose a 50% directors fee increase. Forget that being an issue - they also propose the much more lucrative Performance Shares for insiders.

Sorry Hoop, too many coincidences for me.

Hoop

29-05-2011, 08:04 PM

.........Sorry Hoop, too many coincidences for me.

Thats OK ...you do a lot of research on OGC so your comments are valuable.
Cheers:)

elZorro

30-05-2011, 09:09 PM

Well I'm often wrong too, there is a press release ready for the TSX tonight: 95,000oz of gold resource added at Reefton (http://www.asx.com.au/asxpdf/20110530/pdf/41yy5h6nxxv1zq.pdf)by the latest drilling program. This is another 1% added to the resources that are listed by OGC. The grades aren't massive, but reasonably solid in depth. A side profile shows they'll have to remove an awful lot of overburden first, to get at it by opencast. Another note they made was that the open pit and drilling program often finds old workings. The old-timers followed the very rich reefs by underground tunnels, and appear to have left slim pickings. Let's hope the latest science finds some good remaining pockets. One section at 30g/tonne was found.

P.S. very light trading overnight, so most of the TSX action on OGC might be from US investors.

Another look at the latest chart comparing USgold to OGC on the TSX. It's starting to follow gold now. I'd expect the Barrick chart to be a lot tighter, for example. During the last 6 months there has been no major share dilution, change in output or overly hyping press releases. Didipio fears I guess, were a downwards affect. But no doubt helped by a bit of proactive shorting.

elZorro

01-06-2011, 08:25 PM

Big increase in resources at Globe-Progress mine

Dene Mackenzie — 1 June 2011 (NZResources)

Drilling on the Globe Deeps section of the Globe-Progress mine has provided a major shot in the arm for the longevity of this operation in the Reefton goldfield.
Owner OceanaGold Corporation (ASX, TSX, NZX: OGC) said the drilling had seen a significant increase of in the inferred resources at Globe Deeps and said that this zone remains open down-dip.
The Globe Deeps has an inferred 1.55 million tonnes grading 1.91 grams/tonne for a total of 95,000 ounces – representing a 14% increase to the resource at the Globe deposit at Reefton.
OceanaGold said this resource should expand further down-dip once a follow-up drill programme was completed, some of which should be completed later this year.
Also, a re-optimisation of the Globe pit was now planned for the third quarter of this year.
In the last half of last year, as part of OceanaGold’s aggressive drilling programmes in New Zealand, the company undertook a major programme to evaluate both open-pit and underground potential beyond the limit of the Globe Progress pit design.
All assay results from the programme, known as Globe Deeps, have been returned, and a resource estimate has been completed.
While the Globe Deeps programme was in progress, the Globe Progress open pit was re-optimised, based on revised economic parameters. This led to a significant increase in reserves that was included in the company’s resource inventory released in February.
The toe of the expanded pit coincided with the limit of resource drilling prior to the Globe Deeps drilling. All Globe Deeps intersections intersect mineralisation down-dip of this expanded pit.
12 drill holes for a total of 4,745 metres were drilled and completed by the end of December. Four were reported in December 2010, while the remaining drill holes were released this week.
The Globe Deeps programme confirmed that the style, width, and continuity of gold mineralisation, currently being mined in the Globe Progress open pit, extends at least a further 150 metres down-dip below the current pit design.
Based on estimated true thickness some of the better drill intercepts were RCD0007: 9.6m @ 2.81 g/t gold; RCD0011: 15.6m @ 3.52 g/t Au, RCD0012 7m @ 2.94 g/t Au, followed by 11.7m @ 3.47 g/t and 14m @ 3.42 g/t gold.
Gold grade across zones drilled was highly variable, with the highest grades returned in excess of 30 g/t Au. Higher grades were typically associated with mineralised quartz veins and breccias of the type that were historically mined in the Globe underground mine.
Underground workings, which are frequently encountered in the open pit, were intersected during drilling.
Chief executive Mick Wilkes said: “Globe Deeps is open at depth and continues to show promise of further extensions. There is strong continuity to the mineralisation and we believe the vast majority of these resources will be converted to reserves in the future, further extending the mine life at Reefton.”

Not much added by this article, but a 14% increase in the resource is OK. It's not a huge mine yet.

OK, maybe the brakes are off, have a look at this New presentation dated May 31. (http://www.oceanagold.com/assets/documents/Presentations/OGCMay2011300509.pdf) The company comparisons are back, making OGC look too cheap again. With the timing being just before the AGM, perhaps the company wanted any uncommitted shareholders gone from the registry. If gold makes a move up, we could be in interesting times.

elZorro

03-06-2011, 07:30 AM

So the last couple of days haven't been so rosy for our OGC shares. But the AGM is today, and so I'll be looking at the results of that with interest. There is a new page called Business Strategy on the Oceanagold website. Well it looks new, mentions that gold output will stay at 270,000 oz in NZ for awhile. Note the mention of M&A activity being possible.

Business Strategy

Mission Statement
OceanaGold’s mission is to maximise shareholder value and a build sustainable, profitable, international gold company whilst adhering to the highest standards of corporate governance and environmental practices.
Business Strategy
The Company’s business strategy is to increase its reserve and resource base and expand its current mining operations and production by:
- developing new reserves and resources at its existing mines from in-pit, adjacent and regional exploration;
- continuing performance improvements and progressing exploration opportunities to grow the business;
- successfully bringing the Didipio Project into production; and
- where appropriate, pursuing selective acquisition and exploration opportunities to grow the business and extend mine life in New Zealand.
The Company’s goal is to maintain steady rate gold production from the New Zealand operations of approximately 270,000 ounces per year while at the same time successfully extending mine life through the conversion of resources to reserves and the new discovery of additional resources at the Macraes and Reefton goldfields. In addition, OceanaGold will pursue other growth opportunities from both organic projects such as the Didipio Gold–Copper Project in the Philippines as well as through accretive transactions involving other producing or near-term production precious metals assets.

Ayrton

03-06-2011, 03:39 PM

So gold up round 1532.. OGC falls 9% on NZX (although small volume).

Is this because of something said at the AGM? Did they let on that they are heating the office by burning $100 bills?

elZorro

03-06-2011, 04:26 PM

So gold up round 1532.. OGC falls 9% on NZX (although small volume).

Is this because of something said at the AGM? Did they let on that they are heating the office by burning $100 bills?

Hi Ayrton, I don't think the meeting has been held yet, but yes, 9% of CAD$700mill or so is a lot of money. It would be in the insiders' interests for OGC to be low at this point, if they were intending to soon merge with a smaller company and bring in external shares or options by proportion. But there is a general loss of value in many shares at the moment. All mine anyway.

elZorro

03-06-2011, 08:46 PM

Here are the results of the AGM, held at 2pm in Melbourne.

http://www.oceanagold.com/assets/documents/filings/2011/110603AGMResults.pdf

The performance share rights plan resolution was withdrawn :D, all others passed as expected. Thank goodness for that, I wasn't the only one who read the last agenda item then. Bet the meeting was interesting..

Also today, OGC needs a new CFO. (http://www.oceanagold.com/assets/documents/filings/2011/110603OGC-Managment-update.pdf) Marcus E. has been with OGC for over two years.

Bloomberg:
BACKGROUND*

Marcus Engelbrecht has been Chief Financial Officer of OceanaGold Corporation since January 26, 2009. Mr. Engelbrecht served as an Interim Chief Executive Officer of OceanaGold Corporation from June 10, 2006 to November 5, 2009. Mr. Engelbrecht spent nine years in South Africa with Deane & Thresher, Chartered Accountants before starting a 20 year career with BHP Billiton and affiliated companies. During this period Mr. Engelbrecht served as Divisional Finance Manager, ... New Business and Base Metals in South Africa and The Netherlands where he established and managed the full finance function of the business development group and the base metals operating division. He later assumed the role of Vice President, Finance Business Development where he reported to the CFO. Since 2002, Mr. Engelbrecht served as Chief Financial Officer of Diamonds & Specialty Products, based in Melbourne, Australia. He later managed the implementation of IFRS within the BHP Billiton group as Project Manager. Most recently Mr. Engelbrecht served as a Principal and Director of Mandate Finance. Mr. Engelbrecht holds a Post Graduate Bachelor Degree (Finance) from the University of South Africa.

Mr Engelbrecht has been acting CEO on occasion, and has been with the company at least since 2006. So I would think that seeing an outsider being appointed CEO, then given options, then unusually appointed to the board, along with a probable change of Chairman soon, might have been enough to encourage him to look elsewhere for employment. As there is no current person in the CFO role, this announcement might not have been with much notice.

OGC is sailing into unchartered territory.

elZorro

07-06-2011, 11:38 AM

I've just noticed that the AGM in 2010 was in Vancouver, this year it was in Melbourne. Here is the AGM presentation. (http://www.oceanagold.com/assets/documents/Presentations/110603OGCAGMpresentationASX.pdf)

I cannot find the previous dates of any recent board meetings, except that on 28th April 2011, Mick Wilkes was announced as a member of the board. As there are several meetings each year, another meeting in June wouldn't be out of the question.

An article showing the strength of the mining sector. (http://www.theaustralian.com.au/business/mining-energy/resources-boom-to-keep-rolling-says-analysts-report/story-e6frg9df-1226070520584)

Whatever happened to Chen Lin? (http://173.203.193.65:83/jtaylormedia/?p=3263)Still an investor in OGC.

Resource news April 2011: it's hard to acquire larger gold miners.

Metals Wrap-up
In a stunning development this week Barrick Gold outbid a Chinese company by offering a whooping $7.3 billion for copper miner Equinox Minerals which has operations in Zambia and Saudi Arabia. The debt financed, all cash offer was 16% above a competing offer from China’s state-owned Minmetals Resources.
The acquisition has more twists and turns than a good spy novel, beginning when Lundin Mining and Inmet Mining agreed to a merger of equals - only to have their plans scuttled when Equinox made a hostile bid for Lundin. When Barrick stepped into the picture, Equinox left Lundin at the altar, accepting the better offer from its well-heeled suitor. (It would appear that corporate marriages have more in common with the real thing than most people thought).
What probably surprised the market the most was the fact Barrick agreed to make such a large financial commitment to a commodity that was not considered its core business. Many shareholders simply voted with their feet, pasting the stock and trimming its market cap by a hefty $5 billion before it staged a minor recovery.
You might see a trend developing here as gold miners find it increasingly difficult to acquire new sources of supply to maintain existing production levels – in Barrick’s case about eight million ounces per year. Better a tarnished metal than no metal with glitter.

Latest from NZResources:

Macraes Underground ore system may go 500 metres deeper

Ross Louthean — 8 June 2011

The Frasers Underground mine at Macraes, which commissioned early in 2008, may have an ore system that goes 500 metres below the current mine workings.
This point was made at the annual general meeting of OceanaGold Corporation (ASX, TSX & NZX: OGC) by chief executive Mick Wilkes.
Wilkes told shareholders the underground mine, accessed from within the big Frasers open cut the operation was now contributing annually between 55-65,000 ounces of gold from a known ore system containing 1 million tonnes grading 2.5 grams/tonne gold.
Meanwhile the Macraes open cut operations have now produced more than 3 million oz, from pit mining that began in 1990. This was providing between 120-130,000 oz pa from 4.5 Mt @ 1.1 g/t gold.
Wilkes said the company held 26 km of mineralised trend where only one-third of the Macraes goldfield was being mined.
Meanwhile, at the Globe-Progress mine at Reefton annualised production was now in the range of 75-95,000 oz from established reserves and resources of 1.6 Mt @ 2 g/t.
The mill was operating at up to 60% above plant design.
Reserves were increased by 28% in 2010 and recent exploration showed strong geochemical anomalies at Big River and Big River South, and drill testing of the Blackwater lode at Waiuta was scheduled for the second half of this year.
The advancing Didipio copper-gold project was now 92% owned by OceanaGold with the balance held by a local partner.
The mine, mothballed a few years ago through low metal prices and cost overruns, is now scheduled to commission in the last quarter of 2012.

elZorro

08-06-2011, 01:08 PM

Before 2002, Terrence Fern was a major shareholder and the Chairman of Climax Mining. Jim Askew replaced him as Chairman, before the merger with Oceana. He has just dropped away from the board of OGC with no fanfare, last week. His main company, Petsec Energy, has dropped back a lot over the years, but has just sold some interests in China (http://www.asx.com.au/asxpdf/20110602/pdf/41z0pt121xtlcf.pdf)to do more work on shale oil in the USA. Some might like to follow that up..

elZorro

09-06-2011, 08:36 AM

Resource World is a subscription magazine (http://www.resourceworld.com/index.html)based in Canada. They like to follow smaller miners, but have one page on OGC in this month's mag. It's fairly positive, not a paid writeup either.

Announcement about NZX ASX dual listing today (https://www.directbroking.co.nz/DirectTrade/dynamic/announcement.aspx?id=2817595): I think this is a step in the direction of getting listed on the NZSX50. That can only be good news. Head office must be seeing some significant ownership over here, and want to increase that. Again, it looks like the brake on the SP might be easing up.

elZorro

10-06-2011, 07:29 AM

According to Bell Gully, this dual listing process started yesterday is exactly what is needed for OGC to be in the NZSX50.

Dual Listing

An Australian ASX listed issuer can list on NZX as a "dual listed issuer", which means that it is fully listed on the NZX and is also listed on the main board of its Home Exchange, the ASX.
Unlike an overseas listed issuer, neither of the exchanges on which the Australian issuer is listed (e.g., ASX and NZX) takes precedence in terms of regulatory compliance – compliance is required with the listing rules of both exchanges. However, NZX has provided that many of the NZSX Listing Rules do not apply to a dual listed issuer (because, for example, the issuer is already bound by equivalent ASX Listing Rules).
A dual listed issuer will be weighted on the NZSX50 on the basis of the proportion of revenue generated in New Zealand. For an Australian issuer to be eligible for this weighting the Australian issuer needs to have a New Zealand business and its audited financial statements must separate the revenue generated in New Zealand. Generally, this weighting will give a significantly greater weighting to the Australian issuer’s shares than if the Australian issuer was listed as an overseas listed issuer.

Overseas Listing
An Australian issuer listed on the ASX can list on NZX as an "overseas listed issuer".
Unlike dual listed issuers, overseas listed issuers are not (with a few exceptions) obliged to comply with the NZSX Listing Rules. Instead, an overseas listed issuer is deemed to comply with the NZSX Listing Rules as long as it is listed on a recognised overseas exchange (of which the ASX is one) and remains listed. NZX does however retain the right to require an overseas listed issuer to comply with any NZSX Listing Rules, although this discretion is infrequently exercised.

An overseas listed issuer is required to give NZX the same information and notices it is required to supply to its home exchange and to release simultaneously to NZX all material information it releases to its home exchange to ensure uniformity of information between the markets.

The index weighting of an overseas listed issuer's securities on NZSX is calculated on the basis of the proportion of securities held on its New Zealand share registry. This may mean that the issuer will not qualify for entry into the relevant NZSX indices and therefore will not be a "required buy" for index tracking funds.

It's possible at the moment, that our higher exchange rate against the USD is affecting the price paid for the share overseas.

elZorro

13-06-2011, 07:06 AM

From NZResources: nothing new here however..

OceanaGold outlines its targets

Simon Hartley — 13 June 2011

OceanaGold Corporation (ASX, TSX & NZX: OGC), which is targeting to more than double annual gold production to 600,000 ounces by 2016, is ramping up its exploration in New Zealand and the Philippines.
In its recently released annual meeting report, chief executive Mick Wilkes said $9 million was being spent at its Macraes open pit and Frasers underground mines in East Otago on exploration; following an announcement earlier this month of a successful 12-hole drilling programme at its West Coast, Reefton open pit, which had boosted estimated gold resources by 14%.
Overall, New Zealand mine life operations have been extended by 7-8 years, to 2018-2019, Wilkes said.
Craigs Investment Partners broker Peter McIntyre said while the global financial crisis had seen Oceana mothball the Philippine development site Didipio, it had since tempered the company's outlook and, with high gold prices on the spot market, it was now in a strong cash position; having $US194 million ($NZ236.2 M) in hand.
"They've shown some patience and that should now pay off ... the outlook for gold and copper is favourable for both," he said of forecast prices.
Wilkes said at the Macraes open pit there was a 28 kilometre "mineral trend," but he estimated that only one-third of the goldfield had been developed.
At the Frasers underground mine at Macraes, Wilkes said there was an ongoing dedicated exploration drive underway looking to extend the life of the mine.
"Recent results indicate [gold] mineralisation 500m down dip from the current workings," Wilkes said of Frasers underground.
Guidance by the company for the full (calendar) year remained at 260,000-280,000 oz; with current estimated gold mineral reserves in New Zealand of 2.15 M oz and 1.41 M oz in the Philippines, plus several thousand tonnes of copper.
Wilkes said the target is to commission Didipio in the Philippines by the end of 2012, saying it had "low-cost production growth with exceptional reserve life and immense exploration upside," with exploration being ramped up.
McIntyre said while the strength of the New Zealand dollar against the $US would be undercutting some margins, Oceana was reaping the benefits of record gold prices, having entirely left any hedging position to sell 100% on to the spot market.
*Simon Hartley is senior business reporter for the Otago Daily Times.

Since there is a monthly review of the NZX50 (http://www.nzx.com/markets/NZSX/NZX/announcements/3792111/June-Quarterly-Index-Review), and the next announcement should be on 8th July, maybe by the middle of July OGC will be in it, depending on its ranking. NZX will not say..certainly it's not happening in June. (http://companyresearch.nzx.com/corporate/NZX/newsopen_dyn.php?menu=NZX&header=n&a=209990:NZX)

In 2010, Silverlight published an NZX50 Mcap table based on ranking 1-50 (http://www.sharetrader.co.nz/showthread.php?7391-How-will-the-Allied-Farmers-deal-work./page13), and no. 24 on the list was about $400mill MCap, with Mcap being a very good correlation to ranking. So I'd say OGC has a good chance of getting a ranking, sooner rather than later.

elZorro

15-06-2011, 07:39 AM

Background on Jake Klein, OGC gets just a passing mention. (http://www.brisbaneminingclub.com.au/newsletters/53_NewsletterJake%20Klein.pdf) Certainly a general dropping in money on the table for shares, this is not helping OGC's shareprice much. Those of us holding will need some good news.

And here it is hot off the press: (http://www.oceanagold.com/assets/documents/filings/2011/110615Didipio-Project-Update.pdf)

Didipio, outstanding figures for gold costs, increased output p.a. too. This will get some interest going. Fairly sure the brakes are off: I don't think all of this information just came to light yesterday, it has been held onto, some sort of timing is probably involved.

waterboy

15-06-2011, 11:56 AM

adamcz

15-06-2011, 07:05 PM

They have plenty of cash as at 31 March they had $193m and this should be growing by around $10-$15m per quarter. Would imagine that any other cash requirements they could go to the bank for. I wonder when they will manage to forecast their costs more acurately. Every quarter costs seem to go up, likewise with Didipio.

elZorro

15-06-2011, 07:37 PM

Interesting reading that latest release Elz, a lot of positive news. I see it mentions though that the costs have gone up from 140 million to 185 million expended primarily in h2 2012 but does not say where the extra money will come from. Any ideas... can they fund it internally..that might mean lower profits until start up, options, rights issue?

I would think that mining cashflow should cover a few mill$ increase, and I'm sure they have an overdraft facility they could call on. They have been paying down debt, so room to move either way within a year or two. I think the market has told management what it thinks of equity raising in the meantime. Capital costs would be off the main books, so no major profit decrease.

Since CQT has proposed merging with Catalpa today as equal partners (plus a small part of Newcrest) [see CQT thread on the ASX side] I'm not sure what the next lot of news might be. But maybe I was wrong about an OGC-CQT merger! Not right now anyway. Today's merger proposal is going to take the rest of the year to sort out.

elZorro

18-06-2011, 09:41 AM

Lately OGC has showed better volume in Aussie, lower on the TSX. But last night was interesting: gold was moving back to its all-time US$ high, and at the end of trading a furious buy/sell patch brought the volume up to over 800,000 shares traded, OGC ending lower. Looks like shorting activity to me.

OGC often uses EV/Resources to value itself relative to its peers. Valuecruncher.com uses EV/EBITDA to compare similar companies, like the chart below. According to that, NCM (Newcrest) is overvalued by the market, OGC undervalued. NCM is likely to sell interest in two smaller mines to a Jake Klein merger proposal. Despite expectations, NCM has outperformed OGC over the last 6 months, and longer. Both have trended down.

However, note the high EBITDA/Revenue percentages for gold miners currently, 40-55%. Those are good margins, and OGC is keeping up.

waterboy

20-06-2011, 11:07 AM

Article from The Age

Melbourne-based miner reduces costs by resuming mining in the Philippines.

COST pressures continue to build in the mining industry. Higher energy prices, an outbreak of labour agitation for a greater share of the spoils and rising resources nationalism around the globe have made sure of that.

So companies that can go against the trend and orchestrate a meaningful reduction in costs are going to be rare beasts in the years ahead.

One such rare beast is the Melbourne-based, tri-market listed (Australia, Canada and New Zealand) gold producer, OceanaGold Corporation (ASX: OGC).
Advertisement: Story continues below

An established gold producer from operations in New Zealand at cash costs of more than $US600 ($A564) an ounce, OGC is on its way to becoming a $US400-an-ounce producer from 2013 thanks to last week's decision to resume the development of its Didipio gold/copper project in the Philippines.

That would place OGC in the bottom quartile of the global cost curve, which in the March quarter this year, had the global average cost of production at $US572 an ounce, a 13 per cent year-on-year increase.

OGC's dramatic shift down the cost curve on it achieving first production at Didipio means that mining analysts have set the most aggressive share price targets for the stock you can find anywhere in the sector.

OGC last traded at $2.37 a share. Goldman Sachs has a 12-month share price target on the stock of $3.55. Citi reckons a $5-a-share target is the go while Macquarie has pretty much split the difference and gone for a 12-month target of $4.40 a share.

Those aggressive share price targets reflect the transformational nature for OGC of Didipio, located in northern Luzon. Based on an initial mine reserve that is good for 16 years, annual production at Didipio is forecast at 100,000 ounces of gold and 14,000 tonnes of copper.

Life-of-mine cash costs have been put at a super competitive $US356 an ounce (net of by-product credits for copper at a conservative $US3 a pound) and will have the effect of dragging total group costs of production down to the $US400- an-ounce level mentioned earlier.

And thanks to higher copper production in the first six years of the project, the cash cost of the gold output will actually be a negative $US79 an ounce (after copper by-products). It is little wonder then that OGC pushed the button on a resumption of Didipio's development last week.

The key word there is resumption. Didipio would be in production today if not for the September 2008 start to the global financial crisis, and before that, the sort of delays and frustrations normally associated with mine developments in the Philippines.

Non-government organisations run riot in the country. But the tide looks to be turning, with the majority of the population wanting the economic and social benefits that mining projects can deliver at the regional level.

At the national level, the government has been kicking some goals too, with Moody's last week upgrading the country's credit rating.

''The upgrade was prompted by the relatively high degree of resiliency exhibited by both the country's financial system and external payments position in [the] face of the global financial and economic crises,'' Moody's said. ''International reserves of the central bank are at a historical high and exceptional policy measures have not been required to shield the banking system.''

NGO activity aside, that's got to be comforting for OGC, which has to spend $US173 million on getting Didipio to the starting line in the fourth quarter of next year.

CENTAURUS Metals (ASX: CTM) has added an export leg to its domestic Brazilian iron-ore development plans, prompting the need by the market to have another look at its valuation of the stock.

The group has acquired the Serra do Lontra iron-ore project in the south-east of Brazil, which it reckons it could have in production by 2014 at an annual rate of 1-2 million tonnes.

Forecast costs of $US32-$US43 a tonne loaded on the ship compares with the (current) export selling price of $US150-$US170 a tonne, demonstrating the export project has some real appeal for a stock that last traded for 8.4¢ for a market capitalisation of some $71 million.

As it is, the stock was drawing valuations from brokers that were multiplies of its current share price before it added Serra do Lontra to the portfolio.

On the strength of its plan to sell up to 3 million tonnes of iron ore into Brazil's domestic market (steel mills in the famed Iron Quadrangle), Centaurus had scored a 12-month price target of 25¢ a share from Hartleys and 21¢ a share from Ord Minnett.

So it will be interesting to see where the stock goes from here. Unlike the rail and port infrastructure constraints that face our iron juniors in the Pilbara, Brazil offers low-cost solutions to juniors getting their product to export markets.

In the case of Serra do Lontra, the plan is to truck the iron ore some 140 kilometres on existing sealed roads to the deepwater export port of Ilheus. It is the sort of coastal dig-and-truck strategy that Atlas Iron has used to such great effect in the Pilbara.

Ilheus is an open-access, multi-user port best known in this part of the world for being the one used by ASX-listed Mirabela Nickel as the export point for its Santa Rita nickel sulphide project.

Centaurus reckons that after talks with the port authorities, it should be able to upgrade existing storage and berth facilities to handle its planned production rates at Serra do Lontra.

There is a lot of work to do before Serra do Lontra becomes a reality. Most notable is the need to confirm a supporting resource base of 30-50 million tonnes of mineralisation suitable for upgrading to a high-grade export product.

Still, a second leg to the Centaurus story can't hurt.

Read more: http://www.theage.com.au/business/oceanagold-value-soars-on-didipio-dig-20110619-1g9yy.html#ixzz1PlYKGhAF

elZorro

22-06-2011, 06:59 AM

Cheers for finding that article Waterboy -although the Didipio restart decision was announced nearly a year ago, and that's why the share price went into decline (dilution and poor sentiment).

OceanaGold is now a major employer (http://www.careers.oceanagold.com/advancedSearch.aspx?widgetSearch=1&LoadAll=1), they don't just look for one person for one job, occasionally. Worth thinking about, for people who are going through trade and university studies. This pattern in the mining industry is likely to continue, and the equipment in use and conditions are leading edge, quite often.

OGC up 5% so far on the TSX, I'm watching for shorting to complete the day, but gold has moved up too, US$ down.

elZorro

28-06-2011, 09:05 PM

Jim Askew resigned from the board of Ausdrill (http://www.businessspectator.com.au/bs.nsf/Article/Ausdrills-founding-director-resigns-HM2TE?OpenDocument)this month, for personal reasons. He was on the board since 1987.

No surprise that OGC is moving sideways at the moment, gold has been dropping to around $1500 or just below.

Silverlight

29-06-2011, 11:05 AM

Descending triangle breakout on a 1-2yr chart, good time to buy.

Phaedrus

29-06-2011, 12:19 PM

Descending Triangle? A triangle with a down-sloping top and a horizontal bottom? Where? I don't see one.

A breakout? Where? I don't see one. OGC has been in a downtrend all this year and has an intact, unbroken, confirmed trendline in place (see chart below).

A good time to buy? Why? Even if there was a "descending triangle" these are a Bearish formation.

The chart features indicators that I have been using to monitor OGC for some years. See how they got you out of OGC when the uptrend ended. See how they have so far kept you out of this stock as the shareprice has fallen from $5 to $3. (Red arrows mark Sell signals)

Silverlight, take a look at the OBV plot. It continues to make lower highs as OGC continues to be sold down and its downward trendline is currently unthreatened. Personally, I wouldn't even consider buying OGC so long as the OBV trendline remains unbroken. In the event of any significant turnaround, this is likely to be the first signal to fire in that OBV is usually a leading indicator. Without attendant volume, any interim transient rise is going nowhere.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/OGCnz629.gif

elZorro

29-06-2011, 01:03 PM

Yes, that's fair enough Phaedrus, and I have sold most of my OGC to wait this out for a bit, so I'm not too worried about who is right or wrong.

Is OGC doing worse than in previous years? No, they are making more profit. Has gold output dropped? Not much. Is their debt situation improved? Yes, partly by issuing shares. Has the dilution been overdone? Yes I think so.
Are management waiting a bit, and implementing policy, to shake out pessimistic investors (even me?) Yes, I suspect so.

Good news on the horizon? Most likely.

I think Jim Askew might be thinking about retiring, and why not. That leaves a big opportunity for you-know-who.

Silverlight

29-06-2011, 03:50 PM

Descending Triangle?

Apologies, meant diaganol triangle.

Phaedrus

29-06-2011, 04:28 PM

Interesting day though - today's price rise takes OGC right back to the trendline.

elZorro

30-06-2011, 07:39 PM

Interesting day though - today's price rise takes OGC right back to the trendline.

Maybe it has passed the trendline today, fairly typical, since I don't have many of these at the moment.

There was a press article today about OGC starting to get consents sorted for the SI mines, extended to 2020. Perhaps they thought it would be a good idea to sort this, while all eyes are on more foreign exchange or export earnings, better employment stats, and National is in power. http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10735330 Still the same gold output range being quoted, in a world where most things are changing, why is this a constant? It will be a good 'pump' target later.

elZorro

08-07-2011, 12:28 PM

Hello Phaedrus, trust you bought some OGC back then, have to hand it to TA, sometimes you just have to let it rule.

Here's a prediction for a press release, courtesy of FA work:

OGC to be included in the middle of the NZX50 on 18th July 2011, press release will be at 5.00 pm today.
OK, I'm being hopeful, but here's what happened last month.

http://www.nzx.com/markets/NZSX/NZX/announcements/5117235/HNZ-TO-REPLACE-PGC-IN-THE-NZX-50-INDEX

Press release earlier today, the vacated board spot has been filled.
http://www.asx.com.au/asxpdf/20110708/pdf/41znwp4vkzjpb8.pdf
An interesting choice, we'll see what happens. Darren Klinck has a new job title too.

Addendum re NZX50 listing this month: As Darren would say: "Don't pay too much attention to bloggers" is my usual advice.

(It was a fun afternoon though).

elZorro

10-07-2011, 03:00 PM

There is a new corporate presentation on the OGC website, using some June data.

http://www.oceanagold.com/assets/documents/Presentations/2011-OGC-Corp-Presentation-070711-web-v1.pdf

I apologise to anyone who bought some extra OGC shares on Friday hoping to make a fast return, including me. For some reason, OGC didn't make the grade for a fast entry onto the index, and will have to wait a while for the normal process. At least we had a taste of the extra interest that might follow.

OGC is still linked to the US$gold price, which has returned to form. It has also trended up against the gold price over the last month.

elZorro

16-07-2011, 12:24 PM

See post 145 about OGC's Sam's Creek permit near Nelson (40338). NZPAM have blocked out further permits near here (or even over the top of it) for 12 months. This is so a competitive tender process can be organised. Must be good?

http://www.nzpam.govt.nz/cms/news/2011/notice-of-land-closure-for-all-permitting-for-metallic-minerals-and-coal

Silverlight

18-07-2011, 01:40 PM

Apologies, meant diaganol triangle.

A graph to back up my view, could see a run to $4.5 -$5, graph should say diagonal, not descending :p

elZorro

18-07-2011, 08:47 PM

Hi there Silverlight, that does look compelling, even if I am a bit sceptical of TA line drawings ;). (About now Phaedrus should shoot me down in flames, but he's on holiday).
OGC ought to be following gold closely, and gold should be moving up even more soon. I also have it on good authority that the OceanaGold website is getting a shakeup soon.

So most signs are positive, as you say.

elZorro

29-07-2011, 07:51 AM

On the TSX overnight, OGC selling down a lot. The quarterly report implies that the gold at Macraes and Frasers is proving more elusive at the moment, and issues with experienced staff leaving aren't helping. Some of those new adverts must have been replacements, not additional staff. Recovery costs are up (tied to energy costs and overburden) while recovery is down, more use of standby lower grade piles of ore through the mill. On top of that, the predicted annual production figure is being pulled back again. But a 17% drop on the TSX must be a bit excessive. Taking (as usual) a happier approach, this article from NZResources today:

Strong half year for OceanaGold

Ross Louthean — 29 July 2011

New Zealand’s premier gold producer OceanaGold Corporation (ASX, TSX & NZX: OGC) had a purple patch in the half year to June with gold sales up 44%, earnings before interest, tax, depreciation and amortization up 62% and net profit up 94%.
The rising gold price rather than the currency variation between the Kiwi dollar and the American Greenback would have been a prime factor, along with a strong mining performance at both Macraes and the Globe-Progress mine at Reefton.
The company said yesterday that the revenue increase was driven by the increased average gold price, offset partly by a decrease in gold sales for the half year of 126,100 oz, compared with 132,388 oz in the June 2010 half.
Gold sales for the half year were valued at $US185.551 million ($NZ212.666 M) a lift of $US57.034 M ($NZ65.368 M) on the June 2010 half year.
Cash operating costs for the second quarter were $US921/oz, bringing the average for 2011 to date of $US801/oz ($NZ917/oz).
For the half year the Macraes operations provided 2.915 Mt of mill feed grading 1.12 g/t for 88,264 oz, while Reefton had 881,985t milled at 1.62 g/t for 39,395 oz.
The discussion paper released with the financial result said the strengthening $NZ to “unprecedented levels” versus the $US had an impact on costs. The Kiwi rose 12% since the start of 2011.
Early stage diamond drilling at the Big River project on the Reefton goldfield had returned several significant, high grade results, including an intercept of 20 metres (true width 15.08m) at 8.08 grams/tonne gold from 127m followed by 6.6m (5.03m) @ 21.37 g/t.
Exploration at Frasers Underground mine at Macraes confirmed new mineralisation to the north and north east of current workings, and the deposit remains open in both directions.
The company cash balance at June 30 was $US193.2 M ($NZ221.4 M).
Attachments

http://nzresources.com/icons/pdf.jpgOceanaGold 2011 second quarter results (Adobe PDF File) Download (291KB) (http://nzresources.com/attachments/2335/oceanaanalysis_lr.pdf)

Strange isn't it? Everything in that article is correct, but 2 million shares have been sold down overnight.

Continuous Disclosure. This quarterly report came near the end of its required timestamp, it has to be produced for the market before the end of July. For some weeks now, management must have known the figures were not so hot, and I did wonder why staff weren't picking up share issues on offer (annual and Q1 report). Surely there should have been a bit more forewarning for the market.

p2r

29-07-2011, 01:33 PM

yep 13% down. Be a good investment if you thought the nz dollar is heading down.

elZorro

31-07-2011, 08:46 AM

yep 13% down. Be a good investment if you thought the nz dollar is heading down.

I did notice a bounceback on the ASX on Friday p2r, it dropped low enough for bargain-hunters. But I'm also keeping an eye on mining equipment suppliers like Caterpillar, also going backwards at the moment, and that would not be a good thing.

The 28 July 2011 Q2 release said:

Production & Cost Guidance

At the release of first quarter results in April, the Company indicated if cost pressures continued, guidance would be reassessed. The Company has now adjusted full year production guidance to 255,000 – 270,000 ozs Au at cash costs of US$850-$890 per ounce (from 260,000-280,000 ozs Au at cash costs of US$645-$685 per ounce). The higher cash cost guidance is largely driven by a $123 per ounce increase associated with the weaker USD, as well as slightly lower production in H1 2011, higher input costs and a lower amount of capitalised mining. The updated cost guidance is based on NZD/USD exchange rate of $0.88 for H2 2011.

Those who follow the company know this is quite a drop from about 300,000 oz, and that was being achieved with less gear, just two years ago. So obviously the stripping costs are going up, more diesel, more energy costs too. Until Didipio comes online in about 18months, OGC has high recovery costs compared to most goldminers.

On 30th June 2011, the NZ Herald sourced an article from the ODT which included:

Oceana intends to continue processing around six million tonnes of raw ore a year in conjunction with the partly refined output from its West Coast Reefton open pit.
Estimated gold production would average between 260,000 and 280,000 ounces of gold a year, Cadzow said yesterday.
Separately, Oceana estimated recently that once its development gold and copper mine at Didipio, in the northern Philippines, is fully operational it will produce collectively 600,000 ounces of gold a year by 2016.
- Otago Daily Times

Technically that article is correct, it's the reading between the lines that might be required, that upsets investors.

elZorro

01-08-2011, 07:25 PM

NZResources, today:

Impact of higher cash costs detailed for OceanaGold

Simon Hartley — 1 August 2011

Record gold prices have off-set spiralling crucial production costs for Otago-based OceanaGold Corporation (ASX, TSX & NZX: OGC) which has downgraded its full-year forecast of gold production by between 5,000 to 10,000 ounces this calendar year
Cash costs for each ounce produced have gone up more $US200/oz from earlier estimates; or around 30% for the year, because of foreign exchange costs, higher working costs and slightly lower production.
However, of more immediate rising concern to brokers at Craigs Investment Partners was the quarterly cash cost of production rocketing up 50%, from a total $US37.5 M last year to $US56.5 M.
OceanaGold said in its second quarter report to June that "costs are expected to remain under pressure if the New Zealand dollar remains strong."
Foreign exchange costs accounted for around an extra $US120 in the production cost for each ounce. The Kiwi has hit 30-year highs against the Greenback, last week, trading above the record US87c for several days.
Craigs Investment Partners broker Peter McIntyre said Oceana was a good example of companies which exported and had to deal in US dollars, and which were being hard-hit by the record strength of the Kiwi.
"With cash costs in US dollars this strength in the kiwi is really beginning to affect profitability," McIntyre said.
He highlighted OceanaGold's operating profit had fallen from $US20.9 M a year ago to $US13.9 M, it was facing higher interest costs and foreign exchange losses totalling $US1.9 M were booked.
"The quarterly increase of 50% in production costs 'was of real concern' and OceanaGold would have to work hard to try and rein in the escalation", he said.
While the latest record spot gold price is outside Oceana's reporting period, global prices have steadily climbed during the reporting quarter to reach a record $US1,628/oz early last week.
OceanaGold's earlier full-year production forecast was for 260,000-280,000 oz, but that was revised down to 255,000-270,000 oz.
The downgrade was because production during the first half of the year was "slightly below expectations" due to mining rates at Frasers underground at Macraes and open pit mining at Reefton on the West Coast coming in below estimates.
"This was largely driven by labour shortages in some of the positions. There was less higher grade ore making its way to processing, and there was more lower grade stockpiles being processed in its place," OceanaGold's head of business development, Darren Klinck said when contacted on Friday.
The company outlined its increasing cash costs, up from an estimated $US645-$US685/oz during the full year to $US850-$US890/oz, or a range of 29%-31%.
In the previous quarter, cash costs were $US687/oz, but leapt 34% to $US921/oz because of the Kiwi and higher on-site production costs.
However, there is an expectation of a higher grade of ore being processed for the second half of the year, returning better production results.
*Simon Hartley is senior business reporter for the Otago Daily Times.

elZorro

03-08-2011, 01:46 PM

Here is the news release that was on the ASX 29/7, then it disappeared, now back again..

http://www.asx.com.au/asxpdf/20110729/pdf/42035fj5lyp0tz.pdf

More in-depth data about the Didipio Mine preparation. Most of it a re-hashed report, but I'm not sure. Anway, if gold keeps at the current price, the new mine will be paid off in 2 years or so, after that a 60% net return in total to the Philippines Govt, but this does include all taxes that would have been due anyway. Some years the output will be much higher than normal, the 2nd and 3rd years are good. They will need to buy or lease about 26 dump trucks, 3 excavators, etc etc. Total gold is about 1.5Moz, plus lots of copper concentrate, making net gold costs low or negative. The Didipio site has been riddled with drillholes, well documented.

waterboy

05-08-2011, 09:17 AM

elZorro

05-08-2011, 09:42 AM

smashed again overnight, this would have to be one of the most volatile stocks I have ever seen given market cap. It is down 33% in a week or so. Still no value on didipo..is it just to far away from production? Not sure when this is going to stop but one would expect gold to keep rising in US dollars. Hoping we don't see a repeat fall in price like 2008 then another rapid increase once didipo is running.

Hi Waterboy, yes, maybe a repeat of that cycle is on the cards. Remember it was a 20-bagger from its low. Probably it won't drop that far again, that was just madness. Some big shares are also dropping a lot, companies with varied interests and international reach.

JBmurc

08-08-2011, 01:49 PM

OGC looking good buying at this levels NZD going down Gold up strongly can buy on the ASX 1.93 should re-bound once the fear is over later in the week

Romulus

08-08-2011, 02:38 PM

Does anyone have the updated brokers valuation for OGC after June 11 Qtr is incorporated?

Vtrader

08-08-2011, 10:29 PM

elZorro

09-08-2011, 07:16 AM

OGC has been a pet of mine, has got many lines scored all over the chart.
Have been waiting for $2AUD since March, a 50% discount to the peak of $4AUD SEP2010.
Turning point here?
Some big red volume last few days, and therefore falling OBV.
Can this level be sustained? or is the noose of Didipio to drag SP back to 2009 levels?
Would like to be patriotic with this one, but will wait patiently for evidence.
V.

That's a bit cryptic isn't it Vtrader? But you have been very patient to wait for this one. Should be a medium multi-bagger when it does start heading back up, and this time not a lot of immediate dilution to worry about. Look for outfits like Baker Steel to increase their holdings. Keep an eye on a certain board member too.

waterboy

09-08-2011, 03:15 PM

ogc looks like it might finish up slightly for the day in aus after taking a hammering for the last week or so. Gold now at 1743. This is getting out of control DOW futures are way down for tomorrow (263 points) as well although we are some way off opening and futures can be very jumpy. If this 'correction' continues at this rate for much longer it will be worse than the GFC and cause a depression in itself, a kind of self fulfilling prophecy. I know shareholders will be feeling poorer so consumer spending will be tightened up.
For OGC cheaper oil, lower nz dollar and higher gold price has to be good but to be honest I'd rather the chaos stopped here for a while and stabilized.

Sideshow Bob

09-08-2011, 08:22 PM

Up 10c in NZ - gold up and USD down.

Current PE showing on NZX as 9.21

elZorro

10-08-2011, 06:08 PM

Yesterday, Mick Wilkes (CEO) thought OGC was too cheap to pass up.

http://www.asx.com.au/asxpdf/20110810/pdf/4209y73pf3snzm.pdf

troyvdh

14-08-2011, 12:32 AM

....logic would say buy...OGC.....I have....gold...at near historic highs...$1888 what ever ....allowing for inflation plrase do not forget that the real price is $25K...to be acheieved as a high...despite the market news ...

troyvdh

14-08-2011, 01:36 PM

...sorry....$2500....

elZorro

14-08-2011, 09:55 PM

Here's a 55 min video presention (2008) (http://fora.tv/2008/10/08/Dr_Geoff_Raby_-_How_Much_Has_China_Really_Changed) from Dr Geoff Raby, the new board member. I think he was/is in the equivalent of MFAT in Aussie, relating to China. He's spent a lot of time there, looks to be very knowledgeable and well-spoken. I watched half of this video. I didn't know much about China, so it helped a bit. Things have changed a lot in the last 20 years, and we've seen this at work. We can now ring up and talk to a buyer in Shenzhen (a city that didn't exist 20 years ago), and they are very eager to supply technical goods in any quantity to businesses, large and small. In most cases the quality and prices are excellent. I'm sure Dr Raby has hundreds of much bigger contacts in China.

How will a stronger link to China benefit OGC? Is this in relation to the gold and copper that will be produced in Didipio? Some of the other miners that Jake Klein is involved with, have shipped concentrate to China before. It seems that the domestic market in China is four times bigger than their exports, and growing at 10% a year because of the contract the governing party has with the citizens. If that growth should falter, and unemployment increase, they'd be in big trouble over the contract.

Make no mistake, the board members of mining companies (and many of them are interlinked) are powerful people, there's always been big money in mining, and that looks set to continue.

elZorro

15-08-2011, 04:38 PM

OGC not so hot today, and maybe this report has something relevant to say..

Macquarie sees currency squeeze for OceanaGold

Ross Louthean — 15 August 2011
A report put out after the June quarter production figures for OceanaGold Corporation by Australian broking house Macquarie Equities says the New Zealand miner has been looking at introducing improved remuneration packages for its New Zealand workforce.
Macquarie said the June quarter production performance by OceanaGold’s NZ mines were below its market expectation – with production of 61,300 ounces being 9% below the broker’s forecast.
The production guidance for the year was revised down to between 255,000-270,000 oz.
The currency variation with a stronger Kiwi to the American Greenback impacted on operations as did a lower productivity through “a continued loss of skilled labour during the past quarter.”
Macquarie said cash costs were 32% above “our forecast” of $US700/oz and the new cost guidance has been increased significantly to between $US850-890/oz.
“It is important to note that a high $NZ-$US exchange rate implies an environment of gold price strength, which is supportive of maintaining profit margins,” the broker said.
The weakened $US was “a reflection of the underlying cost pressures being felt across the entire resources sector.”
Macquarie is projecting a ramp up of development in the first quarter of next year for OceanaGold’s Didipio gold-copper project in the Philippines. The company inducted more than 200 staff in the June quarter with more than 50% coming from the local community.
There was an increasing likelihood of Didipio being commissioned late in 2012.
Despite the June downgrade Macquairie said it remains positive about OceanaGold on a medium to long-term basis.

OK, this all makes sense: until OGC pay at the international rates (c.f. Aussie) they'll have trouble holding top staff at the mines. This impacts on the throughput, and then the cash costs.

Here's a new investor's report from the OGC website, dated 9th August.
http://www.oceanagold.com/assets/documents/Presentations/2011-OGC-Corp-Presentation-110812-web3.pdf

elZorro

25-08-2011, 09:24 PM

Just as I was thinking about buying more OGC, it drops back with the PoG. It has been a tough share to make sense of, despite its sensible looking fundamentals.

Just read this from Adam Hewison, couldn't help thinking about that big run OGC had in 2009.

http://club.ino.com/trading/2011/08/the-7-irrefutable-laws-of-every-market-ignore-them-at-your-own-peril/

If we have another GFC, maybe we'll get a repeat of that pattern. I'll be a bit more organised next time.

elZorro

28-08-2011, 10:03 PM

How's this? Posting a day early..

AUSIMMNZ2011: OceanaGold has Asia Pacific target of producing 600,000 oz annually

Ross Louthean — 29 August 2011
New Zealand’s largest gold producer OceanaGold Corporation (ASX, TSX & NZX: OGC) has a vision of being able to produce 600,000 ounces of gold per annum by 2016.
Chief operating officer Mark Cadzow told yesterday’s session of the AusIMM NZ Minerals Conference in Queenstown that the company thought this was possible through organic growth from its operations at Macraes and Reefton on NZ’s South Island and also at its exploration holdings around the Didipio gold-copper project in the Philiippines.
There was also the opportunity of new projects in the Asia Pacific region.
Cadzow said OceanaGold had near-mine projects in NZ with the most advanced being Coronation on the Macraes leases and Globe Deeps at the Globe-Progress mine at Reefton, with both having moved into the feasibility stage.
Other projects at Macraes were the extension of the Frasers Underground mine and emerging “blind” deposits” while at Reefton Big River, Crushington and Blackwater were in the drilling stage.
The company was now spending between $10-20 million on exploration annually.
OceanaGold holds 30 kilometres of strike at Reefton where historic mines had produced a record 2 M oz of gold, and OceanaGold’s Globe-Progress open cut was now moving to the 400,000 oz mark.
Big River had come into prominence with recent drill hits like 15m grading 8 grams/tonne gold and Cadzow said this was from a virgin target near the old Big River mine and the target was showing potential for being open in both directions and at depth.
Cadzow said the hiatus at the Didipio project after the global financial crisis had allowed the company to re-assess mine development plans and, as a result, a larger open pit was planned to increase initial production.
Regional exploration at Didipio had shown up new targets including True Blue near the mine and D’Fox to the south.
Attachments

http://nzresources.com/attachments/2432/ogc.pdf

http://www.sharetrader.co.nz/icons/pdf.jpg

OceanaGold Presentation. (Adobe PDF File)

elZorro

29-08-2011, 06:17 PM

This information is probably worth more than 20 posts: Baker Steel have purchased another 3.6 million shares in OGC recently.

http://www.asx.com.au/asxpdf/20110829/pdf/420pdzjr5hyqp2.pdf

We know from last time, that they have fairly good timing in this share: they reduced holdings after a huge run up, about the same time management started talking about funding again, for Didipio. That was smart. Apart from staffing issues, and lower gold grades in NZ (on the face of it), Oceana Gold should have no major headwinds in the near future. Gold is still over US$1800, that's not US$1500. Baker Steel don't always get it right, but this should help in decision-making. I see that plenty of Direct Broking clients were selling OGC last week. I'm so glad I'm not the only one doing everything backwards...

Linz

30-08-2011, 08:48 AM

elZorro

30-08-2011, 12:23 PM

I think "everything backwards" is the best way to get the good buys, when you feel all the fundamentals understood.
Ogc had a nice wee bump on TSX apart from low vol today.
I see Baker Steel sold down NGF and add to RED5 aswell.

Welcome to the thread Linz, see it's your first post too. Good bit of research there. Maybe it would be a lot easier for me to follow funds like Baker Steel, they often do quite well.

Linz

30-08-2011, 04:57 PM

elZorro

30-08-2011, 07:58 PM

Thank you for the welcome.
Im very impressed with your input to this site!! And your understanding/view of our largest producer.

You are correct with Baker Steel- most(85%) of the time they are good times of this bull market. I have followed them for a few years and find comfort when they and Sprott Asett Man both support the same junior/mid tier company.
I was fortunate to pick up and put 4or 5 of my mates (don't know if mother law counts as a mate) on to ogc at aud$.175 to .60 at the end of 08.

I looking forward to gleaning some great info and viewers from this very interesting site!!! Many thanks

Sheez, that's kind of you to say so Linz, I just wish I was as good at turning a profit, as blathering on about a couple of shares:). On the other hand, you have had impeccable timing, I'm very impressed. Most of us dabbled in OGC and kept selling on the way up. Since OGC is generally linked to the gold price when there is no bad news, can you see anything that would worry us?

Article on Blackwater from the conference.

AUSIMMNZ2011: Deep drilling programme builds up at Blackwater

30 August 2011
A special deep drilling rig from Australia is being brought to the Blackwater project in the Reefton goldfield as OceanaGold Corporation (ASX, TSX & NZX: OGC) builds up an exploration programme focused on targets beneath the historic mine workings.
The company could be drilling up to 11 deep holes to depths of between 1,100 and 1,600 metres at the Blackwater mine at Waiuta. The new drilling programme is expected to begin in November.
Blackwater was one of NZ’s great mines and the biggest historic producer in the Reefton goldfield. It was mined from 1907 to 1951 down to a depth of 800m and produced at a grade of 14.2 grams/tonne gold for 740,000 oz.
OceanaGold’s Roger Mustard told the AusIMM NZ Minerals Conference that gold was hosted in a quarz reef that averaged 0.81m wide, and geological and grade continuity was remarkably consistent.
Modern attempts to reopen Blackwater got off on a wrong footing a few years ago when the company put in a new headframe over one of the main shafts only to find out, contrary to technical reports it had received, that access was too difficult. One option considered was to develop a decline access from near the Snowy River that would go below the old workings.
Mustard said that with the build-up of exploration in the Reefton goldfield it would engage between three to five drill rigs to drill the Globe-Progress Deeps (where the company is undertaking an open cut mine), the Blackwater Deeps, Big River and regional exploration including Crushington and Big River South.
Testing of the Globe Deeps has produced best results of 17.8m @ 4.59 g/t and 17m @ 3.17 g/t. There was now an inferred resource of 95,000 oz.
OceanaGold was trialling a heli-portable RC drill rig.
Roger Mustard said the Reefton field was under-explored and to elevate activity OceanaGold was combining its structural mapping (with form line analysis), bedrock wacker geochemical sampling and engaging technology to see through the cover.
The Reefton field has had historical hardrock production of 4.1 Mt mined at 15.8 g/t gold while the West Coast region has also produced about 8 M oz of alluvial gold.

elZorro

05-09-2011, 11:13 AM

Here's some good news long-term, not so good for 2011 for shareholders, (more overburden to be stripped at Reefton). It's great news for the local labour force. Apologies, not sure what the date of this article is, might be old news.

http://greystar.co.nz/content/oceana-plans-expansion (http://greystar.co.nz/content/oceana-plans-expansion)

This is from today: consents being sought for extensions to operations at Frasers mines.

Consent applications advance for Frasers mine expansion

Ross Louthean — 5 September 2011
Consents are now being sought for expanded tailings storage space, a new freshwater dam and other features for the next phases of cutbacks and expansion of the huge Frasers open cut at the Macraes mining centre.
Owner OceanaGold Corporation (ASX, TSX & NZX: OGC) will be undertaking a phase 5 cutback of the open cut in the next year and will initiate the phase 6 cutback within the next three years.
Coupled to this the company is advancing exploration beyond and below the Panel 2 Deeps of the Frasers Underground mine which has been a great success in showing the underground mine will operate well beyond the originally conceived extent.
The continuing success of exploration beyond Panel 2 has provided further proof to OceanaGold that the eastern side of its line of open pits – Round Hill, Innes Mills, Frasers, Frasers South and Rough Ridge – that there is higher grades and eastern plunge extent to mineralisation.
OceanaGold has been spending big on exploration in the existing mines environment, including deep drilling on the eastern side of the mullock and tailings dumps over the completed Round Hill and Innes Mills pits.
At last week’s NZ Minerals Conference in Queenstown, OceanaGold’s chief operating officer Mark Cadzow pointed out that step-out surface drilling continues to be successful in intersecting mineralisation down-dip on the Frasers Underground Extension exploration.
Lower zones of mineralisation have been picked up 25 metres below the Panel 2 Extension that was discovered in 2010, and the plunging ore system remains open at depth.
While it is too early for detailed planning, NZResources.com understands there is a clear possibility of underground mining extending also back into the depth extension of the Innes Mills and Round Hill ore systems, should ongoing deep exploration continue to prove positive.

Linz

06-09-2011, 07:21 PM

Elzorro, Thanks again for the latest updates- It makes life easy to follow OGC.

I can't see anything fundamentally
out of place with OGC apart from the average head grade of appox .67 of oz/t, when inflation strikes the cost per oz (with the increase oil/wages.....) may impact ogc more than lower cost producers. I know someone at Newmont Whia who said they could not work out how they were processing in the $700 with that head grade last year.
I personnel will be a holder of ogc until the pm mining stock have come to the fore fort with hedges/fundm more than likely 4/5 years away. Fingers crossed ogc will be $16/24 range.

Over the last 10 months i been working on my silver shares and would be interest if you have read any of the latest going on at SVM ( I have always loved this company, great management etc), it has been a favourite of mine. I have been glued to the message board for the last 5 days as this fraud / manipulation plays out. Great if you are a gambler in options! – which I am.
I would be interested if you have any thoughts on SVM.
Cheers L

JBmurc

06-09-2011, 07:25 PM

who's SVM?
also whats OGC average production grades 1.5g/t ??

elZorro

06-09-2011, 08:02 PM

who's SVM?
also whats OGC average production grades 1.5g/t ??

SVM must be Silvercorp, trades on the TSX. Here's a news item Linz must be talking about. http://tmx.quotemedia.com/article.php?newsid=44288502&qm_symbol=SVM
So this company looks to have no long-term debt and some big grades, but has trended down over the last few months.

I don't know all of OGC's grades myself, but they are moving a lot of overburden, so that isn't helping. Is the head grade the average mill grade over a period of time Linz?

elZorro

07-09-2011, 02:41 PM

News release: good progress being made at Didipio. Looks like every effort is being made to keep onside with the locals too, even more important. Around 260 employed so far, will increase to 500 and busiest construction phase Q1 2012.

http://www.asx.com.au/asxpdf/20110907/pdf/420y6mx2vjqzzn.pdf

elZorro

07-09-2011, 05:44 PM

A worthy addition to the NZX50, OGC. Congrats to management.

http://www.directbroking.co.nz/DirectTrade/dynamic/announcement.aspx?id=2886021

NZX

07/09/2011 17:20

GENERAL

REL: 1720 HRS NZX Limited

GENERAL: NZX: OGC TO REPLACE APN NEWS AND MEDIA IN THE NZX 50 INDEX

OCEANAGOLD CORPORATION TO REPLACE APN NEWS AND MEDIA IN THE

NZX 50 INDEX

07 September 2011.

NZX Indices announces changes to the NZX 50 Index following the June

Quarterly Index Review. The changes below, and the quarterly index rebalance,

will be effective at market open on Monday 19 September 2011.

In accordance with the NZX 50 Index methodology, OceanaGold Corporation (OGC)

will be added to the NZX 50 Index as it ranks above the Quarterly Review

requirement for inclusion in the NZX 50 Index. An adjustment factor of 0.50

will be applied to the number of OGC indexed shares, as allowed for in the

NZX Equity Indices Methodology for dual listed issuers. OGC will take the

place of APN News and Media Limited (APN), which will be removed after

failing to meet the liquidity requirements for continued inclusion in the

NZX50.

ENDS

Changes to the NZX Equity Indices in no way reflect an opinion on any NZX

Listed Issuer - they are determined solely by the NZX Index Methodology.

These index changes arise from NZX's

regular Quarterly Index Review schedule. Quarterly Index Reviews are

conducted in March, June, September and December of each year.

NZX i-search subscribers receive the full NZX Index Quarterly Review Memo via

the i-search platform. For more information about the i-search product

pleasephone (04) 495 2810 or email data@nzx.com

For more information, please contact:

Rachael Newsome

NZX Limited

E-mail: rachael.newsome@nzx.com

Phone: 04-4952812

Mobile: 027-2774610

End CA:00213480 For:NZX Type:GENERAL Time:2011-09-07 17:20:19

elZorro

07-09-2011, 09:29 PM

Keep an eye on this guy Matthew Leach at Forsyth Barr, he seems to know what he's talking about..

http://www.nbr.co.nz/article/huge-herald-writedown-plunges-apn-loss-mn-99132

As the NZX50 funds will have to buy some OGC on the NZ exchange at balance date on 19th September, OGC should do quite well, at least until then.

http://www.stuff.co.nz/business/market-data/5586949/OceanaGold-to-join-NZX-50-APN-out

elZorro

08-09-2011, 03:45 PM

OGC is doing a bit better today, rising solidly by about 4.5% on the ASX. NZX50 listing will help with exposure.

http://www.interest.co.nz/news/55276/businessdesk-oceana-gold-join-nzx-50-fisher-and-paykel-healthcare-strike-threat-port-taur

elZorro

09-09-2011, 11:03 AM

More interest on the TSX overnight..equivalent of nearly NZ$3.13 reached. Baker Steel are still buying, now have 7.3% of OGC, spread over several funds. Very bullish for the share IMHO.

Does anyone know why we have to wait for the ASX posts to read the SSH news items (e.g. Baker Steel?) Why can't we see all the info on the NZX?

gonzo56

09-09-2011, 11:32 AM

elZorro

09-09-2011, 01:47 PM

You dont have to, I read it this morning on NZX.com https://www.nzx.com/companies/OGC/announcements/213536

Thanks for that, it must be DirectBroking that has the issue.

Have a look at the pile-up on the buy side on the ASX, OGC has a way to go today if that's any indication. This NZX50 listing should help the domestic market. OGC sales (some internal) were 1/40 of the NZ market this morning.

gonzo56

09-09-2011, 03:12 PM

Thanks for that, it must be DirectBroking that has the issue.

Have a look at the pile-up on the buy side on the ASX, OGC has a way to go today if that's any indication. This NZX50 listing should help the domestic market. OGC sales (some internal) were 1/40 of the NZ market this morning.
yeah, it's crazy. It goes to show how pointless it was to be selling stock a month back.

elZorro

10-09-2011, 07:15 AM

yeah, it's crazy. It goes to show how pointless it was to be selling stock a month back.

And how carefully the big buyers step in (or out) at the right time. In this case the buying reasons were compelling (NZX50 listing soon, share price in the doldrums, gold price increasing, poor market appreciation).

This from NZResources:

Tendering process begins for OceanaGold's copper and gold from Didipio

Simon Hartley — 9 September 2011
OceanaGold Corporation (ASX, TSX & NZX: OGC) has begun the tendering process to sell gold and copper concentrate from its Didipio tenement in the northern Philippines, which is expected to be fully commissioned by the end of 2012.
More than three years after mothballing the project, following a capital expenditure blowout from $US155 million to $US320 M ($NZ187 M - $NZ387 M), in May 2008, Oceana is scheduled to be pouring its first concrete at the already partially developed open pit site by November.
Oceana was caught out by the global financial crisis and was unsuccessful in a global search for development funding, but since mid-2009 had amassed $320 M in three capital raisings; the majority of which will go into Didipio's development.
OceanaGold's chief executive Mick Wilkes said in a market update that tendering for the concentrate offtake agreement had begun, with "strong interest from leading metals trading companies."
"This process will continue through the remainder of the year, when a contract is expected to be finalised," Wilkes said.
Equipment purchased during the mothballed period, including mills and flotation tanks, are being relocated to the Philippines, access roads upgrades are underway and accommodation facilities for more than 500 construction staff should be completed by the end of the month.
Oceana's New Zealand operations are expected to deliver between 255,000 - 270,000 ounces of gold this calendar year, while Didipio is forecast to produce annually, on average, 100,000 oz of gold and 14,000 tonnes of copper during its 16-year life.
*Simon Hartley is senior business reporter for the Otago Daily Times.

Didipio will produce about 2.8 tonnes of gold a year, a whopping 14,000 tonnes of copper. That's a lot of cable and wiring. The ratio by weight is 5000 to 1, in favour of copper. Gross returns based on current prices would be US$185mill for gold, and US$140mill for the copper, less smelting rates, shipping costs etc.

The bit that I highlighted above is one of the most telling sentences I have ever seen written about OceanaGold. If you knew this was going to play out, in mid 2009, you would know that the ramp in the share price was going into reverse, quite soon.

Thankfully there is nothing like that on the horizon for now, not in 2011 anyway.

elZorro

11-09-2011, 10:11 PM

I have been waiting in vain for a decent article covering OceanaGold being accepted into the NZX50 on September 19th. Nothing but basic copies of the press release, a poor showing from the business journalists out there. I decided to write one.

OceanaGold to the rescue of the NZX 50 Index

El Zorro -11 September 2011

The recent announcement by the NZX that OceanaGold would replace APN in the NZX 50 index from 19th September has taken the market generally by surprise. Strong gains in the share price last week, on the NZX, ASX and TSX, suggest that the next week of trading will be positive for OGC. With market capital in the region of NZ$840 mill, OGC should debut well up the table, and it has passed liquidity and other tests to be included. Strong recent buying interest in the share by Baker Steel funds (UK) has been noted, and considering their timing of this share has been good in the past, that is considered to be worth following up, according to Linz.

Strat, another Sharetrader poster, advised that foreign exchange differences may reduce returns from other bourses. Meanwhile Skol advised all traders and investors to be wary of gold stocks, and especially gold bars and other barbarous relics, which do not earn interest or dividends. The NZX 50 is looking neglected, not passing its resistance levels, said Hoop of Hamilton. Vtrader consulted EWT charts and remained on the sidelines regarding OGC at this stage, but was keeping watch, he said.

Staff at NZX and McDouall Stuart (who were not contacted for this article) are no doubt hoping that some exposure of the NZX50 to the largest gold producer in New Zealand will spur it on to greater heights, or at the least improve its lacklustre performance of late. ST stalwarts JBMurc and Denpal advised that they were still bullish on gold stocks, and had been for some time. JBMurc has been quoted in previous articles during Oceanagold's 2009 runup as saying OGC was a "no-brainer".

With each quarterly report showing improving profitability, Oceanagold's main issue for the near term could be one of market perception, but that is changing fast.

Some shares have been purchased in advance of market opening between brokers ($3.22), usually a good sign too.