The OceanaGold Corp share price has surged 33% after the gold producer announced the Philippines Government would renew the Didipio contract.
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The OceanaGold Corp (ASX: OGC) share price has surged after the gold producer announced the Philippines Government has agreed to finalise the renewal of its Didipio gold mine contract. At the time of writing, the OceanaGold share price has climbed by 33.16% to $2.53.
Why the OceanaGold share price surged on the news
OceanaGold has been the operator of the Didipio gold mine in the Philippines since 2013, a site which is 270km north of Manila.
The company has been operating the mine under a ‘Financial or Technical Assistance Agreement (FTAA)’ contract. In July 2019, the agreement was subject to a temporary order issued by the provincial governor to restrain activities of the mine, pending renewal of the FTAA contract.
The dispute was over the location of the mine, which was claimed by the indigenous people of the area as ancestral grounds.
The OceanaGold share price is today rocketing on news the company has been granted a Certification of Non-Overlap (CNO). This states that the FTAA area is outside the ancestral domain of the Indigenous Cultural Communities.
OceanaGold today advised its FTAA contract has strong endorsement from the residents in the local communities around the Didipio mine, including the indigenous peoples.
The company further reported it will continue engaging with the national government with the goal of finalising the FTAA renewal.
OceanaGold also announced in today’s release that as “a contractor of the Philippines Government and a responsible multinational miner, the company is ready and waiting to restart the Didipio operations and to continue contributing to the Philippines’ post-COVID-19 recovery.”
How has OceanaGold performed in 2020?
Prior to the market update, the OceanaGold share price had lost around 30% of its value in 2020. Following today’s movement, however, OceanaGold shares are now down just 9% in year-to-date trading. Despite today’s gains, this still leaves the company’s share price a long way off its 52-week high of $4.29.
OceanaGold has, however, been making progress recently.
Just last week, the company announced it was given permits by the New Zealand Government. These related to OceanaGold’s Golden Point Underground Mine, Deepdell North Stage III open pit extension and Frasers West expansion.
The company advised these permits would allow it to proceed with the development of underground mining opportunities in New Zealand, and to extend the mine life of its Macraes operation all the way to 2028.
Based on the current OceanaGold share price, the company commands a market capitalisation of $134 million.
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Motley Fool contributor Eddy Sunarto 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.