The relatively high risk project appears set to make the most of near record gold and copper prices, with the object of having the project pay for itself within 2.2 years after production begins in January 2013.
Oceana's shares spiked 4.5% on the news, trading around $3.05 yesterday.
Oceana's development of the Didipio prospect in Luzon in the northern Philippines, which had long concerned analysts as to whether costs could be kept under control, had a capital expenditure blowout in May 2008.
Oceana announced at the time its capital costs had more than doubled from $US155 million to $US320 million, a figure then chief executive Steve Orr said was "conservative". The project was then essentially mothballed under a care and maintenance programme.
In a fruitless worldwide search for joint venture partners at the time, the global financial crisis twinned with waning investor sentiment to work against Oceana finding any replacement financing.
Yesterday, Oceana's present chief executive, Mick Wilkes, said in a statement construction would resume, with $US12 million having been spent at Didipio so far. Oceana's board had approved the further $US173 million in capital expenditure needed to complete it.
Since moving to a 100% unhedged position last year; selling all its gold on the open spot market, Oceana estimates it could reap up to an extra $80 million per year from the move.
Oceana's cash in the bank at March 31 was $194 million and it is still generating cashflow from New Zealand operations.
Craigs Investment Partners broker Peter McIntyre said Oceana's strong cash position meant it was likely the entire construction balance of $US172 million would come from Oceana.
He said Oceana estimated "internal rate of return" - the rate of growth the project is expected to generate - was positive in being high at 48%.
A "key strength" of Didipio was the mix of copper and gold, with copper prices near record levels and in demand when the global economy was growing.
That was offset by gold, which was generally sought-after by investors when there was a spike in economic uncertainty.
"These are the two metals to have to make the most of hedging off one another," he said.
However, he also cautioned the Didipio project faced higher risks compared with operating in New Zealand, such as initial delays to engineering or production, labour issues, foreign political issues plus foreign exchange and gold and copper price volatility.
Mr Wilkes said the payback period for Oceana, beginning from production starting on January 2013, was 2.2 years; with annual gold production estimated at 100,000 ounces and 14,000 tonnes of copper.
The estimated gold reserves at Didipio had been upgraded by 19% to 1.68 million ounces and copper estimates were up 35% to 229 million tonnes.
Didipio's's mine life had been reduced to 16 years, with a larger open pit operation now planned, he said.
"This robust project will be transformational for Oceana Gold and give us a significant platform to expand further into the Philippines and throughout Asia Pacific," Mr Wilkes said.
