The OceanaGold Corp (ASX: OGC) share price has been one of the worst performers on the All Ordinaries on Friday.
In late morning trade the gold miner’s shares are down a sizeable 7.5% to $3.91.
Why is the OceanaGold share price crashing lower?
OceanaGold’s shares were always likely to come under pressure today. As I mentioned earlier, the company’s Canada-listed shares sank overnight following the release of a mixed second quarter update.
In the first half of FY 2019 the company achieved production 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.
In addition to this, OceanaGold reported an increase in its all-in sustaining cost (AISC) during the second quarter. This lifted its first-half AISC to US$1,073 per ounce on sales of 246,753 ounces of gold and 6,921 tonnes of copper.
This has left it with an uphill struggle to achieve its full year target of production between 500,000 to 550,000 ounces of gold and 14,000 to 15,000 tonnes of copper at an AISC ranging between US$850 and US$900 per ounce sold.
The company also provided an update on activities in The Philippines where protesters have been disrupting its Didipio operation.
The company’s president and CEO, Mick Wilkes, 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.”
Unfortunately, a lot can change in a matter of hours.
This morning the company revealed that the Provincial Court of Nueva Vizcaya has denied its injunction request to end the unauthorised restraint of the Didipio operation.
OceanaGold will now appeal this decision to the Philippine Court of Appeals in Manilla. But in the meantime, Didipio’s underground mining has been suspended due to the depletion of consumable mining supplies. Which is certainly not the news that shareholders wanted to hear this morning.
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