Melbourne, Jan 15, 2008 AEST (ABN Newswire) - OceanaGold Corporation ("OceanaGold" or "the Company")(ASX: OGC) is pleased to announce that, subject to final approval by its partner financial institutions, the Company intends to restructure its gold hedge facility. Currently the Company has 320,000 ounces forward sold at NZ$773 / ounce expiring in 2010. The current facility calls for 113,712 of these ounces to be delivered at NZ$773 / ounce in 2008.
With the proposed restructure, 2008 will become an entirely unhedged production year allowing the Company to take full advantage of the strong gold price environment. The ounces for delivery in 2008 will be rolled forward to 2011 in order to benefit from the forward curve and realize a higher price for those ounces in 2011. Following this adjustment, the additional cash flow generated in 2008 is expected to total US$33 million at a US$850 per ounce gold price. These additional funds will be used to accelerate payment of debt and for general working capital purposes.
Over the past two years, OceanaGold has progressively reduced the influence of its legacy hedge facility through restructuring and the addition of unhedged production from new mines. The Company has no intention of hedging any future gold production and is continuing its strategy to dilute the effect of the remaining hedge book. In addition, OceanaGold continues to examine financially sensible options to eliminate the remaining hedge facility.
Contact
Mr Darren Klinck
Vice President
Corporate and Investor Relations
OceanaGold Corporation
Tel: +61-3-9656-5300
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