Craigs Investment partners broker Peter McIntyre said Oceana's $US40million ($NZ55.5million) profit for its last quarter to June was 21% above expectations, due to lower than expected development and acquisition costs for the period.
"Oceana's $US124million net debt position is broadly in line with expectations, and the balance sheet can comfortably fund final expenditure at Haile,'' Mr McIntyre said.
Following its first workplace fatality in 25 years last Friday, in its Correnso underground mine at Waihi, Oceana cancelled a presentation at the annual Kalgoorlie "Diggers & Dealers'' gold conference in Western Australia, and is rescheduling an analysts' conference call for later this month.
The Waihi mine remains closed while a WorkSafe New Zealand investigation continues and for the tangi of worker Tipiwai Stainton (29).
Mr McIntyre expected milling operations at Waihi would not be resumed until some time next week.
Oceana has been trading at about $4.85 per share, with Craigs having a $3.60 price target and maintaining a "sell'' recommendation.
Mr McIntyre expected Oceana's borrowing to peak at 15% by the end of 2016, saying the company had extended its revolving debt facility from $US250million to $US300million, but with only $US183million drawn down to date.
Mr McIntyre said "Oceana has moved to protect costs and margins over the next two years with opportunistic hedging of New Zealand dollar gold price and 90% of the group's diesel consumption,'' he said.
Overall, the Haile development was close to 60% complete, with 90% of concrete poured, 40% of structural steel done, two mills and two tanks were built and crusher construction was well advanced.
Oceana finished its quarter with overall debt of $US228million, including $US45million in equipment leasing, had $US104million cash in hand and $US117million in an undrawn debt facility. Oceana's quarterly report noted of the total $US246million required to develop Haile, there was $US134million of spending for completion. Commercial gold production was expected in early 2017.
