Emerging miner, Oxiana Ltd was another to bounce from near term lows in trading yesterday through the combination of the turnaround on the market and a statement; this time the fourth quarter's and year's production report.
OXR shares closed at $2.98, up 40c from the low of $2.58 reached on Tuesday. Oxiana shares had their biggest one-day fall in almost 8 years on the exchange, tumbling 50C, or 16%, to $2.58. That was just 4c above the low reached in a sell off of the stock in March of last year.
Up to yesterday Oxiana shares had dropped 26% so far this year as investors worry a US slowdown will cut global demand for commodities such as copper and zinc.
But OXR remains upbeat.
"Base metals prices were pushed lower during the quarter due mainly to the slowing U.S. economy. The underlying fundamentals for industrial metals in Asia remain unchanged with a particularly firm outlook for copper,'' the company said.
Higher copper and gold prices on Tuesday night played a part in the recovery yesterday, but the operational update and market rebound were the main reasons. Copper fell Wednesday night so we can expect pressure on the OXR share price today.
Oxiana said it had met its production and cost forecasts in the December quarter at its Sepon mine in Laos, but zinc production at Golden Grove in Western Australia was marginally below target.
Sepon production and cost forecasts were met with Sepon copper production achieving a record for the quarter with 16,304 tonnes produced and 62,541 tonnes produced for the year.
Approval was also given for the Sepon copper operation to be expanded to a nameplate capacity of 80,000 tonnes per annum, with first expanded production in 2010.
The company said its Sepon copper plant would also be expanded.
Sepon gold production was as forecast with 102,390 ounces produced for the year.
Zinc, however, was marginally below target at Golden Grove with 34,993 tonnes produced over the six months.
Oxiana said its Prominent Hill development in South Australia was progressing well and remains on schedule, and development of the Martabe gold project in Indonesia was also approved in the final quarter.
The company also said that its resource drilling had confirmed a new oxide deposit at Houay Yeng.
A major project review said Prominent Hill was on schedule but the capital costs were estimated to increase to $1080 million, a development revealed late last year.
"Work during the quarter progressed well with mining ahead of schedule and engineering and construction rates improving," Oxiana said.
"Encouraging drilling results were returned more than 500 metres either side of the Prominent Hill pit."
The development of the Martabe gold mine in Indonesia was also given the green light by the Oxiana Board. First production from a 200,000 ounces gold and silver mine is expected in 2010.
Oxiana said that where dividends for 2006 remain unclaimed Oxiana has reinvested the dividend amounts into Oxiana shares for shareholders registered in Australia and New Zealand.
"This is in accordance with a modification to the Oxiana Constitution approved by shareholders at the Annual General Meeting held on 2 May 2007. During December 2007 Oxiana utilised this facility for the first time with respect to dividends paid on 28 April 2006 and 6 October 2006.
"This is intended to benefit the shareholders affected as they have now received shares in their own name instead of having to claim the dividends (which do not bear any interest) from the Company or under the unclaimed monies legislation."
Oxiana's 2007 full year financial results will be released to the market on Wednesday February 20.
