The OceanaGold Corp (ASX: OGC) share price could sink lower this morning following the release of the gold miner’s second quarter update on Thursday evening.
At the time of writing the company’s Canada-listed shares are down 6%.
What happened in the first half?
For the three months ended June 30, OceanaGold reported consolidated second quarter production of 129,290 ounces of gold and 3,961 tonnes of copper.
This took its first half production to a total of 254,972 ounces of gold and 7,871 tonnes of copper, which was a decline of 5% and an increase of 1.3%, respectively, on the prior corresponding period.
During the second quarter the company reported a consolidated all-in sustaining cost (AISC) of US$1,118 per ounce on sales of 125,609 ounces gold and 3,597 tonnes copper. For the half, the company’s AISC came to US$1,073 per ounce on sales of 246,753 ounces of gold and 6,921 tonnes of copper.
This ultimately led to OceanaGold posting first half revenue of US$365.5 million, earnings before interest, tax, depreciation and amortisation (EBITDA) of US$135.1 million, and a net profit of US$27.7 million.
The company’s president and CEO, Mick Wilkes, said, “We are very pleased with the performance of our operations in the second quarter, particularly at Haile where we had a significant improvement from the previous quarter with production higher 45%, total material mined increasing 45% and unit cash costs decreasing 39%. To capitalise on improved weather conditions, we have accelerated pre-stripping activities at the Red Hill pit, which is now into ore mining, approximately one quarter ahead of schedule. We have also brought forward pre-stripping of other areas.”
Mr Wilkes also provided an update on activities in The Philippines where protesters have been disrupting its Didipio operation.
He said: “In the Philippines, we continue to work constructively with regulatory stakeholders on the FTAA renewal process which is ongoing. We will continue to follow due legal process, and put employee safety and community welfare first, in seeking to secure an injunction against local orders issued by the Provincial Governor seeking to restrain operations at Didipio. We remain confident in the legal basis of our position.”
Looking ahead, the company continues to expect full year production between 500,000 to 550,000 ounces of gold and 14,000 to 15,000 tonnes of copper at AISC ranging between US$850 and US$900 per ounce sold.
However, the latter will take some work considering its first half AISC came in at US$1,073 per ounce.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ResMed Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.