Oceana Gold has delivered just its second dividend in 26 years, despite a profit plunge and depressed global spot gold prices during calendar 2015.
Oceana yesterday announced its financial results for calendar 2015, confirming its second annual dividend of US4c per share, totalling $US24million ($NZ36.1million), matching last year's maiden dividend.
Oceana's production year, reported in late January, notched up a blistering 36% gain in gold production, delivering a record 419,153 ounces from its New Zealand mines, in East Otago, the West Coast and Waihi in the North Island, and its gold-copper Didipio mine in Luzon, in the Philippines.
Oceana remains on track to become the industry leader in low-cost gold production, of mid-tier gold miners.
Its all-in sustaining cost to produce an ounce of gold fell from $US785 to $US709 from the third quarter to fourth quarter.
Oceana shares rose 3.6% on the news, trading at $4.30.
Gold sales for 2015 were down from $US563.3million to $US507.9million, earnings before interest, tax, depreciation and amortisation (Ebitda) were down $US239.7million to $US193.4million and after tax profit plunged 46.5% from $US112.1million to $US59.9million.
Oceana chief executive Mick Wilkes said the dividend demonstrated the robustness of the business and management's dedication to enhancing shareholder wealth.
"Despite the decrease on profits, which was due mainly to lower commodity [gold and copper] prices the transaction costs associated with the purchase of Waihi and Haile, the board has maintained the dividend of US2c per share plus a US2c per share discretionary payment,'' Mr Wilkes said.
Last year Oceana bought Waihi in the central North island from Newmont for $132million and separately bought Romarco Minerals' gold development Haile mine in South Carolina for $996million.
Craigs Investment Partners broker Peter McIntyre said the 2015 result was underpinned by a "strong result'' in the final quarter of operations.
"Oceana's balance sheet is getting stronger, which will allay any concerns by investors about its debt loading and overall viability,'' Mr McIntyre said.
Mr Wilkes said the dividend took into account Oceana's low level of debt and its "significant growth profile''.
A highlight for Mr Wilkes during 2015 was establishing a restructured $US250million revolving credit facility with "substantially lower margins'' and a longer tenure than the previous facility.
Oceana had also entered into a diesel-hedging contracts, covering 90% of the expected consumption of the entire group during 2016 and 2017.
Oceana added another zero-cost collar-hedging programme for the remainder of gold production during 2016 and 2017 at Macraes.
Mr McIntyre said both the collar-hedging and fuel-hedging were "smart moves'', saying analysts were overall bearish on the price of gold, while they expected oil prices to recover later this year.
"[By hedging] they're taking away the variables and making them known,'' he said.
At the end of 2015, Oceana's liquidity stood at $US253million, including $US185million cash, while total debt was $US198million.
