Oceana Gold (OGC) had delivered a stronger than expected quarter to September, driven by higher grades, improved milling rates of ore and ''solid'' underlying cost performance, Craigs Investment Partners broker Peter McIntyre said.
Minor changes to the mine plan at its Philippine copper/gold Didipio mine avoided the lower grades which had been forecast, while at Macraes, in East Otago, and at Reefton, on the West Coast, gold output improved 5%, despite a flat quarter on earlier guidance, he said.
''The fourth quarter is expected to be strong and with only 112,000oz required to achieve the upper end of guidance, we expect the group's production guidance will be exceeded,'' Mr McIntyre said.
Oceana's guidance for calendar 2015 is 380,000oz to 410,000oz.
The cash costs per ounce of $US451 ($NZ666) for the quarter were below Craigs' estimated $US505 an oz, while the accounting standard ''all in sustaining costs'' of $US610 an oz were 22% below Craigs' expectations.
''Macraes and Reefton continued to outperform on costs due to leverage to the weaker New Zealand dollar against the US dollar and fuel prices,'' Mr McIntyre said.
Cost management was ''continuing to impress'' and would further benefit in the next quarter from the inclusion of gold and silver output from Waihi in the North Island, which was predicted to have all in sustaining costs of $US398 an oz.
Although costs at Didipio had disappointed again, Waihi tracking well below all in sustaining costs guidance and Macraes and Reefton also doing better, Mr McIntyre believed predicted all in sustaining costs of $US679 an oz could be achieved for calendar 2015.
OGC's recent script only acquisition of Romarco's gold development mine, Haile, in South Carolina, was yet to be included in Craigs' forecasts, but should deliver significant production growth and lower all in sustaining costs for the company, he said.
''Exploration opportunities at the newly acquired projects are also likely to deliver success ... Haile offers very prospective underground targets, as well as multiple regional opportunities,'' Mr McIntyre said.
Craigs was maintaining a ''buy'' recommendation on OGC, he said.
