The change comes on the back of currency gains on hedged gold and reduced production costs.
Triple-listed Oceana's half-year gold sales were up 24% at a record 156,412 ounces, which contributed $US110 million during the period, but that turnover was down 4.3% on last year's $US115 million sales income, the company said in its second quarter and half-year results to June yesterday.
ABN Amro Craigs broker Peter McIntyre said with the gold sales for the quarter down more than 4%, the profit came primarily from Oceana's undesignated hedging (forward gold sales at contracted prices) gains, which a year ago were booked at a $US32 million loss, compared with a $US47.3 million profit this half year.
The hedging profit was further boosted by the high New Zealand dollar, and also $US22 million saved in production costs, such as fuel, energy and machinery, he said.
"Everything has run in favour for Oceana - currency, hedging, fuel and machinery costs - which means it has been able to consolidate its core operations. They are doing as much as they can [to achieve profitability], while capital raising too," Mr McIntyre said.
Oceana's interim chief executive, Marcus Engelbrecht, said Macraes and Reefton were operating to plan, and had been boosted by the discovery of an additional area of high-grade gold mineralisation at its Frasers underground mine at Macraes and the start of additional exploration at existing sites.
"This [plan] has resulted in record company gold production and improved operating margins," he said in a market statement yesterday.
Oceana's crucial production cash costs per ounce were among the lowest in the top eight Australian-listed gold companies at $US349 an ounce, offering an average cash operating margin of $US356 from the average sale price of $US705 an ounce, Mr Engelbrecht said.
Oceana is still forecasting a record production of 280,000 to 300,000 ounces for 2009.
Late last month, Oceana raised $NZ30 million in $1 chess depositary interests, which trade as ordinary shares, to boost exploration at its East Otago Macraes mine and Reefton on the West Coast, in a bid to increase mine lives by three years to about 2017.
In February, Oceana reported its liabilities exceeded its assets by $US43.4 million.
In yesterday's half-year report, liabilities were $US101 million while assets were $US71 million - an improved gap of $US30 million.
However, Mr McIntyre said the $US101 million liability was reduced hugely to about $US50 million if the non-cash hedging liability of $US54.4 million was deducted.
Oceana mothballed its Didipio development gold/copper mine development in the Philippines a year ago after its projected costs doubled to $US320 million. It has been unsuccessful in finding financial backing of $US185 million to reactivate the project.
Mr Engelbrecht said yesterday an "internal technical review" of the Didipio project scope and capital requirements, part funded by the recent capital raising, was intended to provide "strategic options" for the stalled project.
Mr McIntyre believed Oceana should be more forthcoming with information on Didipio, which appeared to be a potentially valuable resource, noting it was understood more than $US120 million had been spent by Oceana before the mine development was mothballed.
"Not having much in the way of costs for Didipio at present would have also helped the half-year result," Mr McIntyre said.
• Oceana's Dunedin-based chief operating officer, John Kinyon, has resigned to return to Canada.
