Oceana Gold shares have shed more than 20% in value from a price spike earlier in the week on the back of volatile global gold prices, as investors world-wide sought safe haven invest-ments.
Oceana's share price has had a seesaw ride in recent months, in some instances tracking the volatility in global spot gold prices, as panicked investors returned time and time again to the historical security of gold bullion with each new negative announcement surrounding the equities and financial insti-tutions in the US and Europe.
Gold has eased from around $US950 earlier in the week to trade slightly above $US900 yesterday, having rallied from a Russian sell-off in January, which undercut prices to $US820 at the time.
Oceana is beset by several problems at present, with last month's $US54.7 million ($NZ106.8 million) loss, which followed a $US69 million loss the year before.
It is being hampered by its inability amid the credit crunch to find about $US200 million to restart its mothballed Philippines gold/copper development mine, has dwindling cash reserves down from $US108 million to $US9.7 million and its liabilities now exceed its assets by $US43.4 million.
Triple-listed on the Toronto, Australia and New Zealand bourses, Oceana's shares hit $1.20 earlier this week, but by yesterday had shed more than 22% of that value to trade around 93c, ABN Amro Craigs broker Peter McIntyre said.
For several days in February the volume of shares traded was more than 2 million per day, but just 149,000 on Wednesday and well beyond 500,000 by 1pm yesterday.
Mr McIntyre said for New Zealand investors to get a stake in gold stocks they had to take a currency risk buying Australian stocks, which had likely prompted the interest in Oceana recently.
On January 16 Oceana's shares spiked from 28c to 40c and again on February 17 from 56.5c to 80c, prompting separate "please explain" requests from the Australian Securities Exchange on both occasions.
Oceana responded that it was not aware of information which could be an explanation for the recent trading, and in both instances noted that from October, and later in January, the value of gold in New Zealand dollar terms had increased respectively almost 30%.
In late March the global spot price of gold hit a New Zealand dollar high, while it was weakening off against the US greenback, having recorded a cost of $1886 per ounce.
Oceana also noted in its February 20 response that a February 12 research report by US-based brokerage Merrill Lynch had said Oceana shares were the cheapest gold stock under its coverage and forecast Oceana would achieve its 2008 financial guidance, and also improve its performance in 2009.
"We have observed that our share price and [share] volumes have continued to strengthen since this [Merrill Lynch] report was published, in all exchanges where the company's shares trade," Oceana's secretary Matthew Salthouse said.
In mid-September Oceana shares slumped to a record low of 44c, since its June 2007 principle relisting on the mining-friendly Toronto stock exchange, at $A4.15 per share.
About two weeks ago its shares were trading around 85c after a rejuvenative, positive, run, but Oceana then announced the $NZ106.8 million loss for its full year 2008 operations and its shares were pummelled by investors and slumped 22% to close at 75c on the day.