OceanaGold may reduce operations to cut costs

MANILA, Philippines - Oceana Gold Corp. may reduce operations and lower output for its gold mine in Didipio, Nueva Vizcaya to cut costs. The company, which is listed in Toronto, New Zealand, and Australian stock exchanges, “is seriously scaling down operations to a much manageable financial level," Mining and Geosciences Bureau chief Horacio C. Ramos said. The company needs to implement the planned output cut “if it wants to proceed with the project," Ramos added. The company also intends to lower its capitalization by an amount that has yet to be determined, the mining official disclosed, citing a discussion he had with Blair Way, director of the Didipio Gold Copper Project and president of Oceana Gold (Philippines) Inc. Although many mining companies are interested in buying into Oceana, “joint-venture negotiations with interested parties are not working well," Ramos said. The company, which is listed in the Toronto, Australia, and New Zealand stock exchanges, was earlier given half a year to look for a partner before the government takes over its facility. By mid-2009, Oceana should have been scheduled to begin operations. However, financial difficulties have delayed its plans. After spending $120 million to develop and explore in Nueva Vizcaya, the company still requires $200 million to bankroll additional construction. According to the company’s plans, OceanaGold intends to undergo open mining for four years, another 11 years of sub-level caving operations, resulting in a minimum 15 years of processing operations. The company also holds exploration rights and option agreements in the Surigao Peninsula area of North Eastern Mindanao, including Paco, Mayag, Asiga, and Manhulayan. - GMANews.TV