I agree. Very similar situation with DIO. 2 Gold stocks with very strong fundamentals that haven't benefited at all of the strength of Gold. Very disappointing.
Below is an extract of the latest report of Fat Prophets which may give you a beginning of answer.
"We recently recommended Oceana Gold following a positive charting signal, whereby the stock broke above its previous trading range. However, shortly afterwards the company announced that a protestor had been shot at the Didipio mine site in the Philippines. This focussed investor attention back on the high risk nature of the Philippines development and the stock slid sharply.
... we continue to believe that OGC holds significant potential to trade at much higher levels. The company is one of the cheapest gold stocks on the market but the reason for that is political uncertainty. While Didipio remains in the development phase, these concerns will remain.
However as OGC communicates its progress over the next few quarters, provided there are no major disruptions, the political risk premium should slowly be removed from the share price.
Also weighing on the share price was last week's release of an 'Annual Information Form', which indicated capital costs on Didipio are likely to be revised upwards. This should come as no real surprise given the inflationary pressures nearly all mining and construction companies are currently experiencing. However, it does raise the question of whether OGC will be required to raise further capital.
In summary, the recent setback has been disappointing but we continue to see long term potential for OGC. Notwithstanding the political issues, the company is set to produce around 300,000 ounces of gold from its New Zealand operations in calendar 2008, a considerable increase on last year. "
OGC Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
