OceanaGoldHi,
I usually don´t post so much here because the quality of the Stockhouse chats are so low and not at all regulated. Basically what I see is heavy accumulation by some brokerage houses at the same time as new posters turn up and try to scare small investors about the danger of gold.
Still I want to point out a few things:
1. OceanaGold is producing in New Zealand and is not at all affected by the socialist government follies of doubling the taxes in Australia but suffers the consequences since they are traded at the ASX. They are however affected by the lowering of the corporate tax in April 2011 by the conservative government in New Zealand. For those that invest in Australian producers it might be nice to know that the socialists are dropping rapidly and that the election this fall might be a hung parliament.
2. The aussie dollar is dropping rapidly and the kiwi dollar is (unfairly) following it down. Please understand this:
- 1250 usd gold divided by 0,715 a week ago = 1748 nzd paid/ounce
- 1170 usd gold divided by 0,67 now = 1746 nzd paid/ounce
So we are looking at record high gold prices this week too. The effect shows up through lower cash costs and total costs due to the fact that they use USD in book keeping but the effect is the same.
3. I view OGC as basically debt free since the debts are convertible bonds at around 3,9 cad which I expect to be converted into shares as well as tax debts without interest rates due to the usual tax possibilities to postpone tax to encourage investments etc. Still if you really think that OGC had 300 musd debt, then you also must understand that since they are in AUD and in NZD they will be lower by 7-12% or average 10% measured in the next report.
4. The company closed out its hedges in Q1 and on average recieved 743 usd/ounce. The wholde Q2 it will be market price which should on average be between 1150 and 1250 depending on your own prognoses. What will 450 usd extra/ounce do to the EPS? My expectations is at least EPS 10 canadian cents/share.
5. Expect non cash profit to increase far above the 10 cent due to the buying back of hedges paid in early april and the lower mark to markets reports of debts.
6. Expect production to be sharply up due to the earlier close for service of the autoclave in Q1, Reefton concentrate delayed (through the autoclave) in March being delayed, richer mining sequence and higher recoveries as all tonnage is again passing through the autoclave.
7. Higher production will sharply lower cash costs even before currency effects.
8. Expect an update on Didipio sometime after the board meeting around June 5th.
9. Lower oil price are in general good for open pit producers such as OGC due to lower diesel costs. Still other companies have a higher exposure since OGC is on the electric grid for power rather than diesel generators.
10. If market turbulence continues it is probable that the aussie dollar continues down bringing the nzd down as well further protecting us against volatility.
I will not post answers here, anyone that likes to follow my opinion can read my blog through google translator at
https://originalbraila.blogspot.com/ where you can also find our short essay about OGC from April 26 in English.
Please accept my appoligies for any abuse of the English language since it is not my native tongue. Best of luck with your investments.