Why the OceanaGold (ASX:OGC) share price is on watch

The OceanaGold Corp (ASX: OGC) share price is one to watch this morning after the $1.6 billion gold miner's latest quarterly update.

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The OceanaGold Corp (ASX: OGC) share price is one to watch in early trade. Investors will be keeping an eye on the Aussie gold miner after its latest quarterly results.

ASX share price on watch represented by surprised man with binoculars

Image source: Getty Images

Why is the OceanaGold share price on watch?

The Aussie gold miner this morning provided its latest quarterly results for the period ended 31 March 2021 (Q3 2021).

OceanGold produced 83,191 ounces of gold on a consolidated basis at an all-in sustaining cost (AISC) of $1,229 per ounce. Production was up 3% on the prior corresponding period (pcp) but down 16% from the December quarter.

The group's AISC was marginally higher than the $1,218 per ounce recorded in the previous quarter. OceanaGold increasing consolidated cash costs of $800 per ounce and higher AISC reflected lower production and higher capitalised pre-stripping. 

The OceanaGold share price is one to watch today after the mixed result as the company maintained its full-year guidance numbers.

OceanaGold sold 82,847 ounces of gold during the quarter for revenue of $148.9 million. That was an increase on pcp but down 11.5% from $168.2 million in the December quarter. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) totalled $66.5 million for the quarter, down 6% from the December quarter.

Cost increases at the group's Haile plant reflected lower throughput during the quarter and one-off costs. OceanaGold expects Haile to produce 150,000 to 170,000 ounces at an AISC of $950 to $1,100 per ounce sold for FY2021.

The OceanaGold share price is worth watching today as it remains on-track to achieve full year 2021 guidance. That's despite challenges at its Phillippines-based Didipio site. Didipio remains "in a state of operational standby" as an ongoing blockade of the access road continues.

The Aussie gold miner said it is unable to provide a specific timeline to complete the Financial or Technical Assistance Agreement (FTAA) renewal. COVID-19 factors mean it may take "up to 12 months" for normal operations to resume.

Foolish takeaway

The OceanaGold share price is one to watch in early trade after the comprehensive quarterly update form the Aussie gold miner.

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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