Monsters of Rock: OceanaGold wants former Newcrest CFO to kickstart its turnaround story
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$1.5 billion capped OceanaGold has lost 48% of its value over the past five years, most of that since hitting near record highs in early 2019 after strict environmental rules in the Philippines forced the suspension of Didipio, its highest margin mine.
It also owns the Macraes and Waihi operations in New Zealand and the Haile gold mine in the USA, collectively delivering 362,807oz in 2021 at all in sustaining costs of $1247/oz.
That included 14,863oz and 2323t of copper from Didipio, which reopened for the last two months of the year.
Its final quarter of 106,591oz, 35% increase on the previous year’s December term, will be a good platform for new CEO and president Gerard Bond to build off.
Bond was the finance director and CFO of Newcrest, Australia’s largest gold miner, for a decade between January 2022 and 2022, following 14 years at BHP (ASX:BHP), which included roles in its M & A team, as deputy CFO of its aluminium business, head of human resources and CFO and acting president of its nickel business.
OGC chairman Paul Benson said Bond has a “proven track record of driving performance and delivering on business potential”.
RBC Capital Markets mining analyst Alex Barkley said the news would boost market confidence in OGC, which the investment bank has an outperform rating and $2.50 price target on.
He said it presents similar challenges to Newcrest with its geographically diverse operations and joint Australian and Canadian stock listing.
“Its operations also present a mix of reinvestment requirements and opportunities,” he said.
“During Mr. Bond’s tenure at NCM the company progressed through multiple mine expansions (e.g., Cadia block cave) operational improvements (e.g., Lihir optimisation and Telfer mill right-sizing), development projects and inorganic growth.
“OGC is planning investment and growth to varying degrees across all four operating sites. We see Mr. Bond as well placed to oversee OGC’s next phase of growth.”
OGC has been managed by COO Scott Sullivan since the resignation of Michael Holmes as president and CEO back in September.
$340 million capped Bowen Coal (ASX:BCB) is on our watch-list as a potential 2022 monster if the coal market keeps chugging along in its current gear.
Prices for met and thermal coal are sitting at or very close to record highs due to super tight supplies of the commodity and high demand out of Asia and Europe.
Nick Jorss’ Bowen is quietly up 420% over the past 12 months and 53% year to date as it moves toward production at the Bluff PCI mine it acquired from MACA last year. It is yet to mine a tonne of coal, with those catalysts still to come this year at Bluff and Isaac River.
The mine operated for less than two years under Carabella Resources before soft coal prices sent it under in December 2020, but market conditions have shifted markedly since then.
Ultra low volatile PCI prices were paying US$312.50/t on Thursday, which would generate extremely high margins if the mine was in production today.
Bowen’s marketing JV with M Resources has agreed coal sales contracts with “Tier 1” traditional North and South Asian blue chip steel mill customers, the company announced today.
Mining equipment, including a 250t excavator, is currently being mobilised to site with first coal expected this quarter and mining rates to ramp up over the next 3-6 months to Bowen’s target capacity of 1-1.2Mtpa.
Iron ore prices climbing back above US$150/t helped the Materials sector standout as the only winner on Friday, up 0.33%.