Oceana Gold still appears dogged by the credit crunch in its effort to reignite investment in its stalled Didipio gold and copper mine development in the Philippines.
The Otago-based gold miner has notched up an increase of almost 50% in its New Zealand gold production, from its Macraes mine and Frasers underground in East Otago, and open pit in Reefton, when comparing its third-quarter result to the same time last year.
A decline in electricity and oil prices assisted Oceana during the period, as a did a decline in the strength in the New Zealand dollar, which boosted revenues.
Oceana delivered a second consecutive quarterly loss of around $US10 million, with this quarter's $US10.9 million loss comparing to last year's $US47.7 million loss quarterly loss.
The production cost-per-ounce for the quarter of $US640 was well down on the previous quarter's $US741 and $US718 on the same period last year.
Despite the average price of gold falling for the third consecutive quarter, Oceana increased its operating margin by $US61 for the quarter.
All gold was sold on the spot market for the quarter, increasing revenue 122% or $US29.7 million on sales of 62,753 ounces, which was boosted by a $US180 per oz increase in the average price, compared to the same period last year.
Oceana remains on track to deliver its forecast 280,000-300,000oz of gold this year.
Its Macraes production for the quarter was up 51% on a year ago at 45,843oz, while Reefton operated about 25% above design capacity to produce 17,427oz.
In a statement, chief executive Steve Orr said work at Didipio was focused on "low-cost, high-impact initiatives, such as road drainage, construction of accommodation and environmental management activities, to retain project value.
Oceana hit a stumbling block in June this year, when the estimated development cost at Didipio blew out by double, to $US320 million.
Oceana has yet to secure outside funding of about $US185 million, in a market where risk-averse investors, institutions and individuals, have prompted widespread panic selling around the world for the past three weeks.
Mr Orr said the company was "currently working through a strategic process to address the funding shortfall and expects to update the market during the fourth quarter".
Oceana's share price remains in the doldrums, having slid steadily from 74c on September 1 to trade around 35c this week, hovering 1c above its record low.
ABN Amro Craigs broker Peter McIntyre said there remained no doubt about the profitability of the New Zealand operations, but Oceana had "hugely heightened" its company risk profile going into the Philippines development.
"It would be a completely different company if the Didipio development were not part of the mix," he said.
There was an indication of some corporate interest in the Didipio project, but it was not a case of "vultures beginning to circle" to pick off a struggling development, Mr McIntyre said.
