Oceana Gold's share price has seen a much needed resurgence, having in the past fortnight gained 50% in value to trade close to 55c, after languishing in the low to mid-20s in recent months.
The East Otago-based gold miner's resurgence comes on the back of overseas reports, from United States broker Merrill Lynch saying its share price is at bargain levels, through to financial news agency Bloomberg highlighting recent record New Zealand gold prices when converting US dollars to New Zealand dollars, ABN Amro Craigs broker Peter McIntyre says.
The Oceana price lift coincides with record New Zealand gold prices per ounce, underpinned by the weakened kiwi, which yesterday reached $NZ1700 as global spot market prices hit $US901 ($NZ1702).
Mr McIntyre said recent reports on the return on gold bullion investments during the past 12 months, having yielded investors 5.5%, had sparked more interest in gold stocks.
"All the focus will now be on Oceana's fourth-quarter earnings and how the company is faring," he said of the quarterly report due about mid-February.
Last week, Oceana answered a "please explain" from the ASX on its share price rise by noting its operating results for gold production and cash costs were "anticipated to fall broadly in line with the previous market guidance of July 31, 2008" and that it was otherwise in compliance with all ASX rules.
The Oceana statement said that on January 12 Merrill Lynch issued a research report on Oceana, listing it as the cheapest gold stock under the broker's coverage and forecasting it would achieve its 2008 public guidance, as well as a materially improved performance during 2009.
"We have observed that our share price and volumes have strengthened since this report was published," the Oceana statement said.
Mr McIntyre noted the gain in triple-listed Oceana's price, spanning 36c to 54c during the past two weeks, was based on high trading volumes, with more than one million shares traded on Tuesday alone.
The surge in gold prices, more stability in recent spot-price energy prices and diminishing fuel costs were all positive for Oceana.
However, Oceana's mothballed gold and copper development proposal in the northern Philippines still hangs heavy on the company, as it searches in vain for an additional $US200 million of funding, while its Otago and West Coast operations remain its cash cow.
Oceana appears to be readying itself to scale back its Philippine proposal, in order to get into production and have some evidence of cash flow for would-be joint-venture partners.
Mr McIntyre said had it not been for the Philippines venture and subsequent funding uncertainty, Oceana stock could have been trading at more than $2 a share.
Oceana Gold yesterday appointed Marcus Engelbrecht as its chief financial officer.
His career includes 20 years with mining giant BHP Billiton.
