OceanaGold Corp. (TSX:OGC), the gold and copper miner headquartered in Melbourne, Australia, announced on Jan. 20 that it has produced the first 445 ounces of gold in doré bars at Haile Gold Mine.
This is the first production of gold at Haile Gold since the miner started the milling activities at its mine in South Carolina.
This is a very important achievement for OceanaGold, considering that from operations at Haile Gold Mine, the company will increase the total production of gold from approximately 460,000 ounces up to 610,000 ounces and lower the overall AISC per ounce of 13.8%.
Once operations at Haile Gold Mine are at full capacity, the company expects that this will have a substantial favourable impact on the company’s cost structure, and will bring the AISC down to $625 per ounce from approximately $712 per ounce of gold.
Haile Gold Mine will enhance the quality of the company’s asset base and strengthen the company’s balance sheet, because it is another source of production that comes from friendly mining jurisdictions. This reduces the country risk profile and “is a world-class asset with leading margins, a growing resource, and significant expansion potential,” said OceanaGold’s president and CEO, Mick Wilkes.
Approximately 150,000 and 170,000 ounces of gold will be initially poured in doré bars at the South Carolinian mine and one ounce of gold will be produced at an AISC of $525, one of the lowest in the gold stock industry. The company is also exploring the possibility to further expand the mine and the results of the drillings will be published sometime between June and July.
At the moment, OceanaGold is trading at C$4.19 per share on the Toronto Stock Exchange, up 19 cents from the previous trading day.
OceanaGold has a market capitalization of C$2.56 billion and an enterprise value of C$2.72 billion. The number of shares outstanding is 611.02 million, of which 608.15 million is float.
The top institutional holder of the company is Tocqueville Asset Management with 20,735,224 shares as of Sept. 30.
Currently, the company is trading at 1.94 times the book value and 9.92 times the Ebitda. As of today, analysts recommend to buy shares of OceanaGold Corporation and the recommendation rating is 1.7.Ă‚
The analysts’ target price ranges between a low target price of C$2.83 and a high target price of C$4.90.
The company had C$88.07 million in cash on hand and C$298.27 million in total debt as of the most recent quarter. Over the 12 trailing months period, the gold producer generated cash flow of C$214.75 million from operations.
The PE ratio (TTM) is 22.29 and the EPS (TTM) is 19 cents.
Disclosure: I have no positions in any stock mentioned in this article.
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