Record global spot gold prices have seen shares in East Otago-based Oceana Gold spike about 18% during the past two days as investors worldwide flock to the historical safe haven of bullion and gold-producer stock.
The share price yesterday was $3.80 - a far cry from its record low of 22c in December 2008 - with more than $1 million worth of shares traded over the past two days.
Oceana's market capitalisation in December 2008 had plummeted to $50 million but that has increased 1600% to $832 million, based on yesterday's trading price, a gain Craigs Investment Partners broker Peter McIntyre described as "extraordinary".
"The share price has motored on the back of the global spot prices, but also with Oceana having taken over [from a contractor] mining its Frasers underground at Macraes recently," Mr McIntyre said.
On May 5, 486,000 Oceana shares were traded for $1.6 million in 20 separate deals.
Oceana's share price gains during the past two days were more than double some Australian companies, such as Lihir Gold and Newcrest, both up 4.5%.
However, Australian stocks were hit hard last week, losing billions of dollars in value over concerns over the Government's proposed 40% tax on super profits.
The almost $US1 trillion ($NZ1.39 trillion) eurozone bail-out has raised investors' fears of rising inflation, prompting the surge in gold prices.
In March Oceana successfully completed a $119 million capital raising in order to buy back its forward contract hedge book - which had it locked into selling gold at contracted prices - and is now 100% unhedged and able to sell all its gold on the daily spot market.
The purchase was worth $102 million.
Gold pushed through the $US1000-an-ounce barrier for the first time in February last year, and $US1200 in early December, trading at a new high of $1238.70c this week on the Comex division of the New York stock exchange.
Oceana has estimated an extra $70 million to $80 million will flow to its bottom line annually, as long as spot prices remain high.
Oceana delivered a record 300,391 ounces last calendar year from its Macraes and Reefton mines, but has forecast a slight downturn this year because ore being worked through was of lower grades.
Oceana has called an annual meeting and special meeting for shareholders on June 4, in Vancouver, Canada, where it has its principal sharemarket listing on the Toronto stock exchange.
