For those who can't reach the link (of my previous posting) please find the articale below...
Macquarie sees currency squeeze for OceanaGold Ross Louthean, 15 August 2011
A report put out after the June quarter production figures for OceanaGold Corporation by Australian broking house Macquarie Equities says the New Zealand miner has been looking at introducing improved remuneration packages for its New Zealand workforce.
Macquarie said the June quarter production performance by OceanaGold's NZ mines were below its market expectation with production of 61,300 ounces being 9% below the broker's forecast.
The production guidance for the year was revised down to between 255,000-270,000 oz.
The currency variation with a stronger Kiwi to the American Greenback impacted on operations as did a lower productivity through "a continued loss of skilled labour during the past quarter."
Macquarie said cash costs were 32% above "our forecast" of $US700/oz and the new cost guidance has been increased significantly to between $US850-890/oz.
"It is important to note that a high $NZ-$US exchange rate implies an environment of gold price strength, which is supportive of maintaining profit margins," the broker said.
The weakened $US was "a reflection of the underlying cost pressures being felt across the entire resources sector."
Macquarie is projecting a ramp up of development in the first quarter of next year for OceanaGold's Didipio gold-copper project in the Philippines. The company inducted more than 200 staff in the June quarter with more than 50% coming from the local community.
There was an increasing likelihood of Didipio being commissioned late in 2012.
Despite the June downgrade Macquairie said it remains positive about OceanaGold on a medium to long-term basis.
OGC Price at posting:
$2.03 Sentiment: LT Buy Disclosure: Held
