Oceana Gold made $2.5 million in the first three months of this year. The company operates the Macraes and Reefton gold mines. But this is only a quarter of the profit that it witnessed in the same period last year.

Due to unplanned maintenance, the Australian-based company produced 22% less gold. It may be caused by lower recoveries because of mining sequencing at the Macraes mine, and unanticipated repairs to the Macraes autoclave equipment.

The commentary on the accounts said, “Revenue was also impacted by a decrease in the average price received as 78.4% of production was sold into 'out of the money' hedges and call options. In Q4 and Q1 approximately
35% of production was delivered into hedges”.

To bring an end to this problem, Oceana used C$73 million from the proceeds of a C$86.3 million equity and closed all left over undesignated forward hedge contracts for gold sales on March 31.

The average gold price received in the quarter decreased to US$743 million, as a consequence of the hedge impact, but cash costs of production per ounce were high at US$551.