OceanaGold Corp. (TSX:OGC, Financial) released operating and financial results for the second quarter of fiscal 2017 on July 27.
The Australian gold producer closed quarter reporting a net profit per share of four cents, or $25.4 million, a significant 42.9% decline from the second quarter of fiscal 2016. The year-over-year decline was a result of a higher amortization and depreciation charges.
In the comparable quarter of 2016, OceanaGold reported a net profit per share of seven cents, or $39.7 million.
Revenue came in at approximately $171.7 million, a 1.1% year-over-year increase due to the sale of 129,750 ounces of gold and 5,828 tonnes of copper.
The company reported an all-in sustaining cost (AISC) of $681 per ounce of gold for the quarter, up nearly 31% from the previous quarter. It produced 124,396 ounces of gold and 4,322 tonnes of copper. Gold production was 22,379 ounces higher than the comparable quarter of 2016 and copper production was 1,950 tonnes lower.
Compared to the previous quarter, gold production was nearly 16% lower while copper was 5% higher.
A higher AISC per ounce of gold sold and lower production were results of a decrease in the head grade of the mineral processed at Didipio following discontinued operations in the Philippines, lower throughputs and gold recovery rates at Haile mine.
The company reported quarterly cash flow of $88.4 million from operations, a nearly 69% increase from the prior quarter.
As of June 30, the company had $81.6 million in cash and securities. The total liquidity position of OceanaGold also includes a revolving credit facility of $330 million, of which $284.8 million was drawn.
OceanaGold is currently trading around 3.41 Canadian dollars ($2.73) per share on the Toronto Stock Exchange, down two cents from the previous trading day.
OceanaGold has a market capitalization of CA$2.097 billion. Of its 615.03 million outstanding shares, 611.8 million is float. The company has a price-book (P/B) ratio of 1.16.
Analysts recommend buying shares of OceanaGold with a rating of 1.8 out of 5.
The analysts’ average target price is CA$4.36 and ranges between a low of CA$3.41 and a high of CA$5.16.Â
The forward price-earnings (P/E) ratio is 11.76. When the ratio is combined with forecasted 2017 EPS of 29 cents, it yields a value of CA$3.41, which is in line with the stock's current valuation.
Disclosure: I have no positions in any stocks mentioned in this article.
