The OceanaGold Corporation Ltd (ASX: OGC) share price is on watch after the company announced it had filed an injunction against any unauthorised restraint of its operations in the Philippines.
What did OceanaGold announce yesterday?
In an after-market ASX update, the company said the injunction is sought in response to an order from the Governor of Nueva Vizcaya in the Philippines directing local government units to 'restrain any operations' of OceanaGold.
Subsequent to the Governor's order, a local government unit prevented a large supply truck from accessing the company's mine site on Monday.
The company said it had proactively halted truck movements, including copper concentrate, to prevent the potential for escalation of the situation, which has thus far not impacted supply of copper concentrate for shipment.
OceanaGold said that its light vehicles, people and food supplies continue to access the site despite the current tensions.
What does the injunction do?
The company lodged its application for renewal of the Financial or Technical Assistance Agreement (FTAA) with the Philippine Government in March 2018 and received regulatory confirmation on 20 June 2019 that its Didipio Mine is permitted to continue operations pending the FTAA renewal confirmation.
While OceanaGold said it has attempted engagement with the provincial government to resolve the current situation, it has ultimately had to file for an injunction to ensure local government units recognise the legitimacy of its continued right to operation and the national government's legal authority over the operation.
Management said it will continue to work in partnership with the regulatory authorities in accordance with the law and will always comply with its responsibilities under its contract with the Philippines.
How has the OceanaGold share price performed in 2019?
The ongoing difficult situation in the Philippines has been a contributing factor to the OceanaGold share price falling 21% since the start of 2019.
The company also saw its Q4 2019 profitability drop with adjusted net profit coming in at US$124 million, with quarter-on-quarter numbers dropping across the board.
The OceanaGold share price performance is in comparison to the likes of Saracen Mineral Holdings Ltd (ASX: SAR), which has seen its share price climb 26% higher on the back of stronger gold prices and solid operational expansion.
