To a backdrop of new record spot gold prices, Oceana Gold Corp has booked an after-tax loss of $US69 million ($NZ84.3 million) for its full year to December - a 190% increase on last years $US23.4 million loss.
Despite record gold production from its three New Zealand operations in Reefton on the West Coast and Macraes in East Otago - up 0.5% from 182,288 ounces of gold to 183,209 - increasing costs in production, depreciation and administration all appeared to have taken their toll on the bottom line.
Global spot gold prices hit a record $US965.10 on Wednesday - double the price of almost five years ago - as prevailing negative economic data from the US and disappointing company results continued to batter the greenback, prompting investors to seek a safe haven in the precious metal.
Spot gold prices on the London Metals Exchange yesterday afternoon were around $US958, while the US' Comex board were at $US961.
Similarly oil, which historically tracks gold in volatile times, earlier this week hit a new record of $US102 per barrel - having risen more than 60% during the past 12 months.
Oceana gold sales were down for the year from 180,035 oz in 2006 to 177,722 oz last year, with the all-crucial production costs up more than 37%.
In the Oceana release yesterday there was no accompanying report by chief executive Steve Orr for either the full-year financial report or the analysis of financial conditions.
A company spokesman said from Melbourne yesterday that an ‘‘open briefing'' would be available ‘‘next week''.
For its full-year, Oceana booked several increased losses, including contributions from depreciation being up from $US14 million last year to $US28.7 million, interest up from a $US6.5 million loss to $US19.4 million, foreign exchange losses increased from a $US306,000 loss last year to $US2.6 million and administration losses increased from $US5.9 million to $11.6 million.
ABN Amro Craigs broker Peter McIntyre said the result would have been disappointing for Oceana and likely worse than expected for analysts and investors.
‘‘The result has deteriorated quite markedly on last year's ($US23 million) result,'' he said.
The average gold price for 2007 was $US697 - a 32% increase on last year's $US526 - however, the crucial production costs rose 37.6% from $US404 to $US556, leaving Ocean's margin gain increasing only slightly from $US123 million to $US141 million.
Also contributing to the loss was the fourth quarter to December result, also released yesterday, including unrealised hedge losses of $30.4 million -where Oceana has pre-sold gold commitments, but at much lower prices than the high flying spot gold prices at present.
For the quarter, Oceana had an after-tax loss of $US27.2 million, despite gold sales rising from $US21.6 million in the December 2006 quarter to $36.6 million last year and working with an average gold price increase of 29% when comparing the two quarters.
However, Mr McIntyre noted Oceana's total inventories of gold increased from $US31.9 million last year to $US44.8 million and this year's $US69 million loss was partially offset by positive tax provisions totalling $US25.9 million.
