Ferret's Stock to Watch: OCEANAGOLD LIMITED08:58, Wednesday, 10...

Ferret's Stock to Watch: OCEANAGOLD LIMITED
08:58, Wednesday, 10 May 2006

AUST BASED GOLD EXPLORER, PRODUCER STRIKING IT RICH IN NZ

Sydney - Wednesday - May 10: (RWE Aust Business News)
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OVERVIEW
********

True market punters like nothing better than a good gold strike
with plenty of blue sky on the horizon.

OceanaGold Ltd (ASX:OGD) yesterday reported positive results from
exploration drilling at the Supreme prospect, about 2.5 kilometres south
of the Globe Progress mine development in Reefton, New Zealand.

A total of seven holes for 833 metres drilling have been
completed to date on this program.

Several of these holes have successfully intersected a strongly
sheared, brecciated and altered structure containing mineralised
lithologies geologically similar to the Globe Progress orebody.

The shear zone appears to have a width of approximately 10
metres and a strike length of at least 250 metres.

Initial assay results from the drilling are indicating locally
high-grade gold within a broader mineralised envelope, associated with
the abundant sulphide mineralisation.

That sounds plenty of blue sky to the Ferret.

But tied in with the big picture it's an important development
and good enough to stir the blood of dedicated market traders, especially
when the company is already a major gold producer at Macreas.

OceanaGold is currently developing the Globe Progress mine
and a one million tonne per annum concentrate processing plant in the
Reefton Goldfield.

The project is expected to commission at the end of 2006 and
produce at a rate of 60,000 to 70,000 ounces per annum.

The concentrate from Reefton will be rail shipped back to the
Macraes plant for final processing through the company's autoclave.

OceanaGold also owns and operates the Macraes Gold Mine and
gold processing plant located in the Macraes Goldfield near Dunedin on
the South Island of New Zealand.

The company currently produces about 180,000 ounces of gold
per annum from this operation.

Back to yesterday's report, OceanaGold says visible gold has been
observed during logging of the drill core.

At the completion of drilling the Supreme resource model will be
updated and the company is optimistic that the resource for this area
will increase.

Infill drilling is currently being planned to test the continuity
and extent of the mineralisation.

Drilling is expected to be completed by June.

OceanaGold's CEO, Stephen Orr, commented that the drilling at
Supreme is supporting the company's geologic model which indicates that
significant amounts of additional surface mineralisation remain along
the entire Reefton mineralised trend.

The exploration in Reefton is targeting near-surface refractory
mineralisation which historically could not be economically recovered
with conventional gold recovery processes.

"Our strategy is to find additional ore bodies that will
supplement ore from Globe Progress and extend production life at
Reefton," Mr Orr disclosed.

SHARE PRICE MOVEMENTS
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Shares of OceanaGold yesterday rose 7c to 87c. Rolling high for
the year has been 90c and low 47c. More than two million shares changed
hands in yesterday's session. The company has 360 million shares on issue
with a market cap of $288 million.

The Frasers Underground development is expected to be
commissioned by the end of 2007 for a preproduction development cost of
$30 million.

Upon commissioning, this project will contribute 60,000 ounces
per annum to the company's gold production.

OceanaGold started construction of its Globe Progress project in
the Reefton Goldfield near the west coast of the South Island.

Globe Progress will consist of a surface mine and process plant
to grind and concentrate the mined ore.

The resulting concentrate will then be railed and trucked to
Macraes for final processing through the pressure oxidation plant.

During the year, work was completed on the silt ponds, tailings
embankments and an access bridge across the Inangahua River.

Since then, development of the access road and construction of
the power line to service the concentrator and mine site has been
completed.

Mr Orr says 2006 will be an exciting and pivotal year for
OceanaGold as "we build our future and deliver shareholder value from
the work undertaken during 2005."

OceanaGold shareholders can expect to benefit from operating
improvements, development project optimisation and exploration success
achieved during the past year, he added.

BACKGROUND
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OceanaGold is a leading gold producer listed on the Australian
and New Zealand Stock Exchanges in March 2004.

The company, one of the largest gold producers in Australasia, is
expected to increase production by 65 per cent to around 300,000
ounces per annum.

OceanaGold operates principally in the South Island of New
Zealand, where it has dominant land holdings in two major goldfields -
Macraes and Reefton.

OceanaGold has a confirmed growth path and is creating
shareholder value through organic growth. With profitable and long-life
mines it has an exciting future.

The company's assets include New Zealand's largest gold mine
at Macraes, new mining development at Globe Progress in the Reefton
Goldfield, and a large new gold discovery at Sams Creek.

During the next few years OceanaGold will develop new mines at
Macraes and Globe Progress, and substantially expand its resource base,
which currently stands at 6.1 million ounces.

The company is also seeking to expand its operations outside
New Zealand.

ENDS