Don't hold directly, but do have an interest in its viability...

Don't hold directly, but do have an interest in its viability via RCO, who have the gold royalty on the Reefton Mine.

Appear to be right up against it with their costs and hedging. Can't see their 6 mthly fin statements on the ASX either and lateness not usually a good sign. Good to see a director buying and hope Didipio sale comes to pass.

FYI attached is a recent article from the Otago Daily Times (the Dunedin regional newpaper, incl Macraes). Also should disclose I used to do mgmt contract work for Macraes, but alas no longer have any inside knowledge.

PE


Hard times for Oceana Gold 5:00AM Monday August 11, 2008
By Simon Hartley

Oceana Gold's cash-cow Macraes mine operation in East Otago is going through "tough times" to rectify a concerning fall in ore tonnage and gold production while its Philippines' copper and gold development comes under increasing scrutiny with a languishing share price.

The market capitalisation of the country's largest gold producer has plummeted 85 per cent from A$668 million to A$97 million ($844 million to $122 million) over 14-months, following restructuring and moving its principal listing to the Toronto Stock Exchange in June 2007 - making it ripe for a takeover play.

Its share price has been decimated, falling from the A$4.15 listing price to last Friday closing trading at A60c.

Oceana Gold chief executive Steve Orr has said Oceana was in negotiations for a partner in the Philippines and looking to raise US$185 million ($262 million). Costs for the Didipio gold and copper mine had blown out and doubled to US$320 million in May, followed by suspension of work in late-June as more funding was sought.

At Macraes, Oceana Gold management and the 500-strong workforce are understood to be at odds over proposed changes to working conditions at the East Otago gold mine, but management have rejected claims by some sources that it could be "crunch time" for the future of the 18-year-old old mine.

Vice-president of New Zealand operations John Kinyon said: "Yes. There have been delays and some tough times on several fronts. But there's no doubt in my mind we'll be here for life-of-mine [forecast till 2013]."

He confirmed staff had been briefed recently on proposed changes to combat the problems.

A senior mine employee, who spoke only on condition of anonymity, said many of the workers had not yet realised the seriousness of their predicament.