oversold?, page-17

Goldman Sachs report:

Event:

* OGC has released a brief production update. Given the company's primary listing on the TSX, the release does not contain detailed production metrics, which makes reconciling our numbers difficult.

Key Take-Outs:
* Fourth quarter gold sales were 68,027oz bringing total for FY10 to 268,087oz (GS&PA 286koz Au). This was 10% lower than FY09 and slightly below the company's expectations for the year, and well below our estimate.

* The Didipio project team has been assembled and OGC is confident this is now fully funded - with a capital raising complete in late CY10 and the remaining capital available out of operating cash flows.

* Exploration for the quarter was US$3.3m, and focused on Macraes on both the surface and underground at Fraser's mine.

* Further exploration at Reefton also confirmed the continuity of the Globe Progress Shear Zone - beneath the existing pit design. A resource update is due in the current quarter.

Earnings and Valuation Impact:

* Incorporating the actual gold sales for FY10 results in a significant earnings downgrade for the year (albeit off a low base). Lowering our overall production forecast for FY11 also results in a downgrade. The earnings decrease and slight fall in valuation results in us lowering our target price from $4.50 to $4.20.

Investment View:

* Maintain BUY.

* Given the lack of detail, it is difficult to reconcile the physicals, however the 4th quarter was clearly short of our estimates. We have also lowered our production going forward (which was previously based on the most recent 43-101 Technical Reports filed with the TSX), to more closely correspond with the actuals. We will await further clarification and guidance with the FY10 financials which will be released on 17 February.