Here's why the OceanaGold (ASX:OGC) share price is gaining today

It's shaping up to be a big day on the ASX for OceanaGold…

| More on:
Woman holding gold bar and cheering.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The OceanaGold Corp (ASX: OGC) share price is gaining this morning after the company announced its Didipio Mine's Financial or Technical Assistance Agreement (FTAA) has been renewed for another 25-year period. OceanaGold also released an operations update.

Shares in OceanaGold are currently trading for $2.52 – 2.44% more than at market's close yesterday.

Let's take a look at today's news from the gold mining company.

The news driving the OceanaGold share price

Didipio Mine

The OceanaGold share price looks like it's in for a good day after the company announced the Philippine Government has renewed the Didipio Mine's Financial or Technical Assistance Agreement (FTAA) for another 25 years.

Didipio is a gold and copper mine. Work at the mine is currently halted as the company prepares to rehire and train its workforce.

Some of the FTAA's renewed terms include:

  • OceanaGold must invest an additional 1.5% of the mine's revenue into community development.
  • The company must list at least 10% of OceanaGold Philippines Inc's ordinary shares on the Philippine Stock Exchange within the next 3 years. OceanaGold Philippines is a subsidiary of the company.
  • Additionally, OceanaGold Philippines must offer at least 25% of the gold it produces to the Philippine Central Bank for a fair market price.

The OceanaGold share price might be one to watch in the near term, as the company plans to announce more details on the Didipio Mine's production resumption in due time.  

It hopes to restart its milling operations soon, using the 19 million tonnes of ore it has stockpiled.

Once work at the mine begins, OceanaGold predicts it will reach full capacity within 12 months. The mine's expected to produce around 10,000 ounces of gold and 1,000 tonnes of copper each month at first quartile.

Commentary from management

OceanaGold's president and CEO Michael Holmes said of the news:

We are pleased to confirm the renewal of the Didipio Mine's FTAA and thank the Philippine Government for their endorsement… We look forward to commencing restart activities and continuing to work in partnership with our regulators, communities, employees, and all stakeholders to contribute to the Philippines' post-COVID-19 economic recovery.

Operational update

Also likely affecting the OceanaGold share price is news the company expects all its operational mines to reach their 2021 production guidance.

OceanaGold's US operation, Haile, is on track to hit its 2021 production guidance of 150,000 to 170,000 ounces of gold.

However, the mine's production costs have increased and it's yet to meet the company's expectations. As a result, OceanaGold is conducting a review of the operation.

News the company's New Zealand-based operations are tracking in line with their 2021 production guidance could also be boosting the OceanaGold share price.

The Waihi Gold Mine's production guidance was between 35,000 and 45,000 ounces of gold.

Macreas Gold Mine's guidance was 155,000 to 165,000 ounces of gold.

OceanaGold share price snapshot

It has been a rough year so far for the OceanaGold share price. It's currently 5.9% lower year to date. It has also fallen 23% since this time last year.

The company has a market capitalisation of around $1.7 billion, with approximately 704 million shares outstanding.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Gold

Miner looking at a tablet.
Gold

2 ASX All Ords gold stocks making moves on big news today

The ASX All Ords gold stocks are catching investor interest today. But why?

Read more »

A man standing in a red rock mine is covered by a sheet of gold blowing in the wind.
Gold

One ASX 200 gold stock to buy now…and one to sell

Some ASX 200 gold stocks stand to gain more from the surging gold price than others.

Read more »

A man in a suit face palms at the downturn happening with shares today.
Gold

Guess which ASX gold stock is crashing 20% on permit blow

This gold miner is having a day to forget. But why?

Read more »

Gold bars and Australian dollar notes.
ETFs

$10,000 invested in GDX ETF a year ago is now worth…

Has this ASX gold ETF delivered for investors amid the recent gold price bonanza?

Read more »

Gold bars on top of gold coins.
Gold

Why did Citi Group just raise its gold price target?

One ASX broker thinks gold's recent run is all out of steam, at least for now.

Read more »

Woman holding gold bar and cheering.
Gold

Up 200% in 2025, guess which ASX gold stock is surging 11% again today

Investors are sending the ASX gold stock soaring again today. But why?

Read more »

Man with rocket wings which have flames coming out of them.
Gold

Guess which ASX gold stock just rocketed 167% on big news!

Investors are sending the ASX gold stock flying higher on Monday. Let’s find out why.

Read more »

Rising gold share price represented by a green arrow on piles of gold block.
Gold

Up 72% in 2025, why is this ASX 200 gold stock racing ahead of the benchmark again today?

Investors are bidding up this high-flying ASX 200 gold stock again on Thursday. But why?

Read more »