Perth, Sep 21, 2006 AEST (ABN Newswire) - Merger player, Oceana Gold Limited (ASX: OGD), says its proposed marriage with Climax Mining (ASX: CMX) should start delivering increased production of around 555,000 ounces of gold equivalent by 2009 from their combined New Zealand and Philippines assets.
In an update on the A$500 million merger today, delivered to the Paydirt Asia Pacific Downunder Conference in Perth, OceanaGold Chief Development Officer, Mr Albert Brantley, said the move was necessary to give both companies the scale and market interest to develop gold projects currently beyond their individual scope.
"The merger is on track for completion on November 3 and should see the emergence of a globally significant Pacific Rim gold mining company with at least three new mine projects to be commissioned within two years," Mr Brantley said.
"It will lift OceanaGold's 2005 production from 180,000 ounces to around 550,000 ounces by 2009," he said.
"The combined entity will have the increased scale of around 4.8 million reserve ounces of gold to attract greater global investor interest and increased liquidity - a key objective of our joining forces."
The merged company - to continue to be called OceanaGold - will have total reserves of 81.3 million tonnes grading 3.9 grams per tonne gold within a total resource of 259 million tonnes grading 10.4 grams per tonne - with some copper credits as well.
"On our assessment, we believe the larger entity can potentially generate cash costs of between US$185-228 per ounce of gold from what we believe are dominant land holdings on two major goldfields - Reefton and Macreas - in New Zealand, and the Didipio Valley in the Philippines.
"Within a month of the completion of the merger, we expect to commence first open pit work at Reefton and move underground at Macreas within 12 months to lift that mine's output to 225,000 ounces per annum."
Contact
Kevin Skinner
Senior Consultant
FIELD PUBLIC RELATIONS
231 South Road
MILE END SA 5031
Tel: (08) 8234 9555
Fax: (08) 8234 9566
Mob: 0414 822 631
kevin@fieldpr.com.au
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