OceanaGold Corporation - Management's Discussion and Analysis of financial condition and results of operations for the year ended December 31, 2007



    /NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES AND NOT FOR
    DISTRIBUTION TO US NEWSWIRE SERVICES/

    MELBOURNE, Australia, Feb. 27 /CNW/ -

    
                                 HIGHLIGHTS
                                 ----------

    -   Gold production totalled 63,505 ounces for the fourth quarter and
        183,209 ounces for the year, slightly exceeding production in 2006.

    -   Gold sales revenue increased 69% for the quarter and 10% for the full
        year, compared to the same periods last year.

    -   Cash operating margin in 2007 increased 15% over 2006 to US$141 per
        ounce.

    -   2007 EBITDA (excluding unrealized gain/(loss) on hedges) totalled
        US$8.7 million.

    -   Didipio phase 1 financing was completed through an issue of
        A$30 million in convertible notes in Q1 bringing the total
        convertible note financing for Didipio to A$100 million.

    -   An IPO on the TSX was completed in July, raising C$100.7 million in
        gross proceeds.

    -   The Reefton Gold Mine was commissioned and achieved production of
        37,897 gold ounces during the year.

    -   The Frasers Underground mine development was completed and the mine
        commissioned in January 2008.

    -   Macraes open pit was reengineered to expose the higher grade ore in
        the stage 4 portion of the pit earlier than original design.

    -   Didipio development was initiated with the award of key contracts,
        mobilisation of the EPCM contractor, construction of the access road,
        and hiring of key management personnel.

    (*)  All statistics are compared to the corresponding 2006 period.
    (xx) OceanaGold has adopted USD as its presentation currency, the
         financial statements are presented in USD and all numbers in this
         document are expressed in USD unless otherwise stated.


                               GROUP OVERVIEW
    

    Results from Operations

    Production increased during the fourth quarter with combined gold
production of 63,505 gold ounces bringing the total for the year to 183,209
gold ounces, exceeding 2006 gold production of 182,288 ounces.
    The completion of the overburden removal campaign and a pit redesign at
the Macraes open pit in the third quarter resulted in a significant increase
in mill grades. This, combined with improved performance at the Reefton mine
contributed to a strong finish to the year.
    Gold sales volume for the quarter and full year was 58,803 and
177,722 ounces respectively compared to sales volume of 37,733 and 180,035
ounces in the same periods of 2006. 10,229 ounces for the fourth quarter and
28,015 ounces for the full year of 2007 were produced from the Frasers
underground development and credited to the project cost.
    The impact of the lower sales volume was more than offset by a
significant rise in the average gold price received per ounce. This increased
29% to $754 per ounce for the quarter and 33% to $697 for the year due to a
combination of continued higher gold spot prices, the continued benefits of
the hedge restructure completed in 2006, and the positive impact of the gold
put options. As a result gold sales revenue for the quarter and the year
exceeded that of the comparative periods of 2006.
    Reduced production due to lower grade ore mined in the early phases of
the Frasers Stage 4 pit at the Macraes mine, together with a slower than
expected ramp up at the Reefton open pit mine did impact cash costs for the
year. Despite a better than forecast cost performance in the fourth quarter
with cash costs at $544 per ounce sold, the full year's cost result was higher
than 2006 at $556 per ounce.
    The increased gold prices and sales revenue more than offset the
increased cash costs per ounce and delivered significantly higher cash
operating margins of $210 per ounce sold in the quarter and $141 per ounce in
the full year, compared to $53 and $123 per ounce for the same periods of
2006.

    Development Update

    The development of the Frasers Underground Mine neared completion, with
trial production mining, mine panel development and the completion of the
ventilation and escapeway raisebores all occurring in the fourth quarter.
    In January 2008, the company announced the successful on schedule
commissioning of the Frasers Underground Mine.
    The development of the Didipio project on Luzon Island, Philippines
continued as planned. A tender process for the open-cut mining contract was
initiated and finalisation is expected in the first quarter of 2008.
Mobilisation and commencement of the pre-stripping for the open cut is
scheduled to start in the second quarter.
    Hiring of key personnel continued and included appointments to senior
roles for the Construction, Project and Process Manager positions. Ausenco
also continued to increase manpower for construction activities at site.
    The development of the 21 kilometre access road reached site and the road
was upgraded to all weather status.

    Project Financing

    An extraordinary general meeting of shareholders was held in the first
quarter which approved the company's issue of A$100 million in convertible
notes in December 2006 and March 2007. Funds from the issue comprised phase 1
of the Didipio financing and are being used for the ongoing development of the
Didipio project.

    North American Listing

    During the second quarter, OceanaGold completed a restructure whereby the
parent company became a Canadian corporation with a Toronto Stock Exchange
(TSX) listing.
    The Company subsequently completed a TSX initial public offering (IPO) on
July 5, 2007. The IPO raised C$90,002,500 from the issue of 25,715,000 common
shares at C$3.50 per share. On July 25, 2007 the syndicate of underwriters
exercised their over-allotment option which raised an additional C$10,710,000
from the issue of 3,060,000 common shares at C$3.50 per share.
    Net proceeds from this transaction are being used for the development of
the Didipio Project in the Philippines.

    
                                 - Table 1 -
                   Key Financial and Operating Statistics

    -------------------------------------------------------------------------
                                 Quarter     Quarter        Year        Year
                                Ended 31    Ended 31    Ended 31    Ended 31
    Financial Statistics        Dec 2007    Dec 2006    Dec 2007    Dec 2006
    -------------------------------------------------------------------------
    Gold Sales (Ounces)           58,803      37,733     177,722     180,035

                                     USD         USD         USD         USD
                                     ---         ---         ---         ---
    Average Price Received
     ($ per ounce)                   754         583         697         526
    Cash Operating Cost
     ($ per ounce)                   544         530         556         404
    Cash Operating Margin
     ($ per ounce)                   210          53         141         123

    Non-Cash Cost
     ($ per ounce)                   211          93         190          78
    Total Operating Cost
     ($ per ounce)                   755         623         746         482

    Total Cash Operating Cost
     ($ per tonne)                 16.80       14.13       13.50       13.18
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                 Quarter     Quarter        Year        Year
                                Ended 31    Ended 31    Ended 31    Ended 31
    Operating Statistics        Dec 2007    Dec 2006    Dec 2007    Dec 2006
    -------------------------------------------------------------------------
    Gold produced (ounces)        63,505      38,543     183,209     182,288

    Total Ore Mined
     (tonnes)                  1,434,549   1,229,459   4,680,384   5,678,195
    Ore Mined grade
     (grams/tonne)                  1.74        0.96        1.41        1.23

    Total Waste Mined
     (tonnes) - incl pre-
     strip                    13,563,299  10,618,257  55,748,837  48,363,629

    Total Material Mined
     (tonnes) - incl pre-
     strip                    14,997,848  11,847,716  60,429,221  54,041,824

    Total Material Moved
     (tonnes)                 15,399,244  12,517,608  63,039,572  55,915,129

    Mill Feed (dry milled
     tonnes)                   1,576,118   1,413,857   6,166,485   5,513,634
    Mill Feed Grade
     (grams/tonne)                  1.65        1.02        1.20        1.24
    Recovery (%)                   78.0%       83.5%       77.5%       82.5%

    Total Autoclave feed
     (concentrate tonnes)
     (dry with lime)              39,102      26,488     133,977     124,682
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                 Quarter     Quarter        Year        Year
                                Ended 31    Ended 31    Ended 31    Ended 31
    Operating Statistics        Dec 2007    Dec 2006    Dec 2007    Dec 2006
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    EBITDA (excluding
     unrealized gain/(loss)
     on hedges)                    9,057         975       8,724      16,002
    -------------------------------------------------------------------------
    Earnings/(loss) after
     income tax and before
     unrealized gain/(loss)
     on hedges                    (5,880)       (536)    (25,461)     (1,476)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Reported EBITDA (including
     unrealized gain/(loss)
     on hedges)                  (21,345)     (1,853)    (53,529)    (16,761)
    -------------------------------------------------------------------------
    Reported earnings/(loss)
     after income tax
     (including unrealized
     gain/(loss) on hedges)      (27,162)     (2,431)    (69,039)    (23,427)
    -------------------------------------------------------------------------
    

    OPERATIONS

    Consolidated New Zealand Operations

    The New Zealand operations produced 63,505 ounces for 4th quarter 2007.
This compares to 38,543 ounces produced in the same period during 2006. The
65% increase reflects the additional production from Reefton and Frasers
Underground which were not in production in the 4th quarter 2006.

    Macraes (New Zealand)

    The Macraes operation improved safety performance and achieved no lost
time injuries for the quarter and one medically treated injury (MTI). In the
2007 year, Macraes sustained three lost time injuries and 12 medically treated
injuries.
    Total material moved in the fourth quarter and for the year was lower
than in 2006 due to longer hauls from deeper portions of the Macraes open pit
and mining of the Golden Ridge pit. Increased weather related delays also
negatively affected production as compared to the previous year. The fourth
quarter produced an open pit mined ore grade that averaged 60% higher than in
2006 although the yearly average compared to 2006 was almost the same.
    Processing throughput at Macraes for the fourth quarter was 7% lower than
the same period in 2006 due to milling higher hardness ore and lower mill
availabilities.
    The mill feed grade in 2007 was 15% lower than 2006 due to processing of
large volumes of low grade stockpiles while a large scale waste removal
campaign was conducted. Recoveries were also adversely impacted by higher
amounts of carbon material in the ore feed combined with late commissioning of
the regrind mill for the Reefton concentrate.

    Reefton (New Zealand)

    The Reefton operation had two lost time injuries during the quarter and
no MTIs. Reefton sustained five lost time injuries and four MTIs during the
year.
    The Reefton Mine's production progressively increased through 2007 and by
quarter 4, the plant achieved design throughput rates. Over the course of
2007, modifications were made to the grinding and water clarifying circuits
which are now achieving above design throughput rates. Filter performance is
now performing at design levels on a consistent basis.
    A total of 16,687 gold ounces were produced for the fourth quarter and
37,897 gold ounces for the year.

    
                                 - Table 2 -
                         Macraes Operating Statistics

    -------------------------------------------------------------------------
                                 Quarter     Quarter        Year        Year
    Macraes Goldfield           Ended 31    Ended 31    Ended 31    Ended 31
    Operating Statistics        Dec 2007    Dec 2006    Dec 2007    Dec 2006
    -------------------------------------------------------------------------

    Gold produced (ounces)        46,818      38,543     145,312     182,288

    Total Ore Mined
     (tonnes)                  1,113,591   1,229,459   3,796,184   5,678,195
    Ore Mined grade
     (grams/tonne)                  1.54        0.96        1.22        1.23

    Total Waste Mined
     (tonnes) - incl pre-
     strip                    10,655,037  10,618,257  43,752,396  48,363,629

    Total Material Mined
     (tonnes) - incl pre-
     strip                    11,768,628  11,847,716  47,548,580  54,041,824

    Total Material Moved
     (tonnes)                 12,115,134  12,517,608  50,059,468  55,915,129

    Mill Feed (dry milled
     tonnes)                   1,317,352   1,413,857   5,564,873   5,513,634
    Mill Feed Grade
     (grams/tonne)                  1.43        1.02        1.05        1.24
    Recovery (%)                   77.3%       83.5%       77.5%       82.5%

    Total Autoclave feed
     (concentrate tonnes)
     (dry with lime)              26,733      26,488     106,154     124,682
    -------------------------------------------------------------------------



                                 - Table 3 -
                         Reefton Operating Statistics

    -------------------------------------------------------------------------
                                 Quarter     Quarter        Year        Year
    Reefton Goldfield           Ended 31    Ended 31    Ended 31    Ended 31
    Operating Statistics        Dec 2007    Dec 2006    Dec 2007    Dec 2006
    -------------------------------------------------------------------------

    Gold produced (ounces)        16,687         n/a      37,897         n/a

    Total Ore Mined
     (tonnes)                    320,958         n/a     884,200         n/a
    Ore Mined grade
     (grams/tonne)                  2.42         n/a        2.24         n/a

    Total Waste Mined
     (tonnes) - incl pre-
     strip                     2,908,262         n/a  11,996,441         n/a

    Total Material Mined
     (tonnes) - incl pre-
     strip                     3,229,220         n/a  12,880,641         n/a

    Total Material Moved
     (tonnes)                  3,284,110         n/a  12,980,104         n/a

    Mill Feed (dry milled
     tonnes)                     258,766         n/a     601,612         n/a
    Mill Feed Grade
     (grams/tonne)                  2.79         n/a        2.60         n/a
    Recovery (%)                   81.9%         n/a       77.1%         n/a
    -------------------------------------------------------------------------

                             DEVELOPMENT PROJECTS
    

    NEW ZEALAND

    Frasers Underground Mine

    The Frasers underground mine had no lost time injuries for the fourth
quarter or for the year.
    The mine continued with trial production mining in the quarter. Stope
production was 97,652 tonnes at 3.17 g/t bringing the annual total to 235,122t
(2.70g/t). Fourth quarter gold production was 11,253 ounces for a yearly total
of 29,037 ounces.
    Underground development continued ahead of the plan with 1,232 metres
completed, bringing the total to 5,178 metres for 2007 and project to date
total to 6,536 metres.
    Raisebore development was also completed during the fourth quarter,
linking the underground workings to surface. A 342 metre (2.4 metre diameter)
escape raise was lined with shotcrete and fitted with a ladderway. A 4.0 metre
diameter raisebore for exhaust ventilation was also completed.
    The Company announced successful commissioning of the Frasers Underground
on January 17, 2008.

    PHILIPPINES

    Didipio Project

    The development of the Didipio project continued to plan in the fourth
quarter. The tender process for the open-cut mining contract commenced and a
preferred contractor was identified. Negotiations are expected to be finalised
in the first quarter of 2008 with the contractor to mobilize to site early in
the second quarter to commence pre-stripping and the construction of the
tailings storage facility. In addition, the bulk earthworks on Plant Hill and
the ROM pad will commence late in the first quarter to early in the second
quarter of 2008. The mills remain on schedule for arrival in late in the third
quarter of 2008 with the construction of the Process Plant to take place
through the second half of 2008 and into the first quarter of 2009.
    Hiring of key personnel continued with senior roles filled for the
Construction, Project and Process Manager positions. Ausenco, who was
appointed the EPCM contractor in 2007, also continued to increase manpower for
construction activities on site.
    In 2007 the 21 kilometre site access road reached the project site.
General maintenance and some improvements including widening in some areas has
been taking place through the rainy season in the fourth quarter in order to
maintain all weather status and access for project construction requirements.
    Geotechnical drilling in the process plant area is in progress. A local
geotechnical contractor has been engaged to undertake the drilling.

    
                                 EXPLORATION
    

    New Zealand

    Macraes Goldfield

    Infill diamond drilling continued at Frasers Underground Panel 2
Extension in order to increase geological confidence in the resource for the
area (Figure 1).
    A total of 3,219m diamond core drilling was completed for the quarter
progressively increasing drill hole density to a nominal 50m x 50m grid.
Eleven holes in the current program have now successfully intersected the
mineralised Hangingwall shear zone.
    Assay results were received for the four diamond drill holes detailed in
Table 4. The grade and width of the mineralised Hangingwall structure was
within the expected range based on intersections from the surrounding holes.
Several holes have also intersected significant stockwork style mineralisation
beneath the Hangingwall (Appendix I).

    
                                 - Table 4 -
                         Frasers Underground Panel 2
                   Extension Diamond Drilling Intersections
    -------------------------------------------------------------------------
                                                            True
                Hole      From        To       Length      Width      Grade
    Prospect     ID        (m)        (m)        (m)        (m)     (g/t Au)
    -------------------------------------------------------------------------
    FRUG P2   DDH4904
    Extension              552        559         7          7          2.54
    -------------------------------------------------------------------------
              DDH4907      537        543         6          6          4.42
    -------------------------------------------------------------------------
              DDH4908      529        534         5          5          7.04
    -------------------------------------------------------------------------
              DDH4911      571        583        12         12          4.94
    -------------------------------------------------------------------------
    

    The 2007 exploration program at Macraes Goldfield focussed on drilling at
Panel 2 Frasers Underground as well as on the Golden Point extension. Both of
these targets are extensions of the main Macraes ore body and the strategy is
similar to that which was followed with Frasers Underground where down-dip
extensions from the previously mined open pits are drilled to identify a
reserve that could be accessed through a decline. Results from these targets
have been positive so far.
    Drilling will continue on the Panel 2 Extension area in 2008 with the
additional information being integrated into an updated resource/reserve
model. Further drilling at Golden Point and some of the other identified
underground targets is also planned.

    Reefton Goldfield

    13 holes (1155m) of drilling (Figure 2) at the Globe, General Gordon and
Empress deposits were completed during the quarter and reported in the
December 3, 2007 press release.
    Strong results (Table 5) from the Globe deposit identified high grade
mineralised structures that splay northward from the main Globe geological
model where significant upside may be gained by small changes to the optimised
pit design. Results from the General Gordon deposit confirm mineralisation
immediately to the south of the pit where incremental gains may be made by re-
optimising the pit design. Mineralisation was also confirmed in the General
Gordon west arm of the pit adding confidence to the ore block model. The drill
results reported for the Empress deposit are being incorporated into the pit
design and suggest that at depth, the mineralised structure contains a
higher-grade zone that has continuity for approximately 40 metres further
along strike.

    
               Table 5: Reefton Significant Reverse Circulation
                           Drilling Intersections

    -------------------------------------------------------------------------
                                                            True
                Hole      From        To        Length     Width      Grade
    Prospect     ID        (m)        (m)        (m)        (m)     (g/t Au)
    -------------------------------------------------------------------------
    General
    Gordon    RRC0042       15         16         1         0.8         0.76
                            50         55         5         3.8         1.10
                            57         59         2         1.5         1.05
                            62         64         2         1.5         0.90
                            67         68         1         0.8         0.68
              RRC0043       42         51         9         6.1         2.46
                            53         54         1         0.7         0.81
                            56         57         1         0.7         0.88
              RRC0044       38         39         1         0.7         0.50
                            42         51         9         6.5         1.40
                            53         56         3         2.2         0.67
              RRC0048        0          1         1         0.8         1.44
                             7          8         1         0.8         0.66
                            10         13         3         2.3         0.83
                            15         18         3         2.3         1.13
                            20         23         3         2.3         2.10
                            37         39         2         1.5         1.16
                            42         43         1         0.8         0.62
                            54         55         1         0.8         1.24
                            59         60         1         0.8         1.86
              RRC0049       22         46        24        14.9         3.69
                            50         51         1         0.6         0.59
                            63         65         2         1.2         0.98
                            67         70         3         1.9         2.13
              RRC0050       14         37        23        17.0         4.25
                            39         40         1         0.7         0.56
                            48         56         8         5.9         0.90
    Empress   RRC0045       71         93        22        12.5         5.63
              RRC0046      101        102         1         0.8         1.09
                           104        112         8         6.3         3.17
              RRC0047       81         82         1         0.7         2.04
                            94        100         6         4.2         2.37
    Globe     RRC0051       10         31        21        17.2         3.59
              RRC0052        3          7         4         3.3         0.47
                            18         29        11         9.0         6.31
                            31         33         2         1.6         1.99
              RRC0053        7         15         8         4.6         1.59
                            20         21         1         0.6         0.75
                            29         37         8         4.6         4.33
                            78         85         7         4.0         1.59
                            92         94         2         1.1         1.42
                            96         97         1         0.6         1.20
                           105        106         1         0.6         3.31
                           108        110         2         1.1         0.93
                           126        127         1         0.6         0.62
              RRC0054       10         12         2         1.6         4.55
                            17         27        10         8.2         5.20
                            61         62         1         0.8         0.77
                            64         69         5         4.1         2.46
                            72         73         1         0.8         0.53
                            76         79         3         2.5         1.72
                            81         82         1         0.8         1.17
    -------------------------------------------------------------------------
    

    Testing of the Crushington prospect, approximately 3km north of the
Reefton operation was completed during the quarter. Results confirmed
mineralised structures at depth, however they were narrower and of lower grade
than anticipated.
    A drill program at the Auld Creek prospect approximately 1km north of the
Reefton Operation also took place with 480m of core drilling completed.
Results confirmed the presence of mineralized structures at depth but the
results to-date are not significant enough to point to a satellite deposit at
this stage in the program.
    The 2007 exploration program demonstrated strong results from areas
within, and adjacent to, the current open pit design. Positive results
established new opportunities proximal and within current pit designs for
incremental gains in ounces by pit re-optimisations based on new drilling
data. The high grade mineralized structures identified at the Globe and
Empress pits in particular, present significant upside potential.
    First pass drill campaigns at other near mine targets in the Reefton
Goldfield were also completed with some encouraging results, confirming the
presence of mineralised structures along strike.
    Follow-up drill programs will be designed to further delineate these near
mine targets on a priority basis. The focus of the 2008 Reefton exploration
program will continue to be the discovery of near surface, refractory gold
deposits like the Supreme deposit (south of the current open-cut), that are
amenable to open-pit mining methods and treatment through the Reefton process
plant.

    PHILIPPINES

    During the fourth quarter $0.5M was spent on exploration activities.

    Didipio Gold and Copper project

    An infill, diamond drilling program is currently being undertaken at
Didipio comprising 28 drill holes for 7,545m. The purpose of this drill
program is to increase data density between drill intersections, to enable the
conversion of some resources to reserves and to help with planning mine cash
flow and mine design. To date 17 drill holes have been completed with the
remainder scheduled for the first quarter 2008.
    Results from the first 10 drill holes confirm the geological model and
have produced some very encouraging results. These were reported in a press
release on February 13, 2008. A summary is included below:

    
    DDH0202       145.4m  @   0.390% Cu and 2.420 g/t Au
    including
    DDH0202        32.1m  @   0.730% Cu and 7.580 g/t Au
    DDH0206        91.0m  @   0.574% Cu and 1.960 g/t Au
    including
    DDH0206         7.2m  @   2.194% Cu and 10.403 g/t Au
    DDH0206         2.8m  @   1.579% Cu and 6.834 g/t Au
    DDH0206         7.7m  @   5.306% Cu and 19.112 g/t Au
    DDH0207        64.3m  @   1.013% Cu and 0.926 g/t Au
    DDH0208       108.8m  @   0.555% Cu and 0.956 g/t Au
    DDH0209       131.8m  @   0.495% Cu and 0.612 g/t Au
    

    Near-mine Exploration

    Eight gold-copper prospects are known within a 1500m radius of the
Didipio Project (Fig. 2) and an additional 11 prospects are known within a
3000m radius. Ongoing near-mine exploration is being undertaken and a number
of priority targets are being examined with drilling expected to commence in
the first half of 2008.
    A drill program has been developed for the Morning Star prospect and this
will be the first priority.

    Papaya Project

    During the quarter, the Papaya environmental certificate was granted by
the Provincial Environmental Dept to allow road clearing and minor tree
cutting for drill access. The Papaya project is located approximately
20 kilometres from Didipio and within the Didipio FTAA.
    Field exploration has progressed at Papaya. Analysis of air-magnetics,
radiometrics, soil sampling and the recently completed ground IP survey has
resulted in 4 distinct drill targets.
    Follow-up exploration activities are expected to take place in H1 2008.

    Manhulayan Project

    The exploration permit for the Manhulayan project was received late in
the fourth quarter.
    An exploration team of approximately 35 have mobilized to site. Initial
work will comprise of extending the existing grid and carrying out soil
sampling as well as an IP/Magnetics survey to enable drill targets to be
selected. Drilling is expected to commence in late March / early April.

    Other Philippines Exploration

    Initial steps have been taken to re-establish relationships with local
communities and updating various exploration permits. The Claveria and Manag
prospects in Northern Luzon are two of the main priorities this year with a
goal of gaining access for fieldwork in H1 2008. OceanaGold owns 100% interest
in these prospects.

    QUALITY CONTROL

    Mr Jonathan Moore, B.Sc (Hons) Geology and Dip.Grad. Physics, Resource
Geologist is the Qualified Person for the technical disclosure in this
release.

    New Zealand

    Sampling of sawn diamond drill core was completed at the OceanaGold
facilities at Reefton and Macraes, New Zealand. Samples were prepared and
assayed by fire assay methods at the AMDEL laboratory located at Macraes Flat,
New Zealand. Standard reference materials were inserted to monitor the quality
control of the assay data.

    Philippines

    Sawn diamond drill half core was sampled at the OceanaGold facilities at
Didipio in the Philippines. Sampling through the ore zone was carried out at
1m intervals while sampling in weakly mineralized zones was carried out at 3m
intervals. Samples were dispatched under company seal to Mcphar Geoservices
(Phil.), Inc. assay laboratory located in Makati City, Manila where they were
prepared and assayed for gold by fire assay methods and for copper by triple
acid digestion and AAS finish. Standard gold and copper reference materials
and blank samples (supplied by Ore Research & Exploration Pty Ltd, Victoria,
Australia) were inserted to monitor the quality control of the assay data.

    
                                 APPENDIX I

      Summary of Diamond Drill Holes and Mineralised Intercepts at the
               Frasers Underground Panel 2 Extension, Macraes

    -------------------------------------------------------------------------
    Hole ID        North        East                          Azimuth    Dip
                   (Mine       (Mine       RL       Depth    (Degrees  (De-
                    Grid)       Grid)      (m)       (m)       True)   grees)
    -------------------------------------------------------------------------
    RCD4895        12,501      71,101      529      110.1       300      -75
    -------------------------------------------------------------------------
    RCD4896        12,421      71,232      530      288.1       285      -75
    -------------------------------------------------------------------------
    RCD4897        12,400      71,282      532      620.6       286      -75
    -------------------------------------------------------------------------
    RCD4898        12,457      71,242      532      611.8       288      -75
    -------------------------------------------------------------------------
    RCD4899        12,455      71,335      534      650.8       286      -77
    -------------------------------------------------------------------------
    DDH4900        12,413      71,374      537      653.6       286      -78
    -------------------------------------------------------------------------
    DDH4901        12,541      70,997      525      536.3       283      -75
    -------------------------------------------------------------------------
    DDH4902        12,566      70,899      519      500.4       282      -79
    -------------------------------------------------------------------------
    DDH4903        12,603      70,922      523      512.5       288      -78
    -------------------------------------------------------------------------
    DDH4904        12,422      71,233      530          -       279      -76
    -------------------------------------------------------------------------
    DDH4905        12,502      71,101      529          -       300      -77
    -------------------------------------------------------------------------
    RCD4906        71,363      12,498      537        501       292      -76
    -------------------------------------------------------------------------
    DDH4907        71,095      12,584      533        602       282      -77
    -------------------------------------------------------------------------
    DDH4908        71,078      12,586      532        581       280      -76
    -------------------------------------------------------------------------
    DDW4909        71,363      12,498      537        453       292      -76
    -------------------------------------------------------------------------
    DDH4910        71,158      12,590      534          -       295      -78
    -------------------------------------------------------------------------
    DDH4911        71,239      12,529      533        621       299      -76
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    DDH4912        71,016      12,635      539          -       285      -73
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    Hole ID                                              True
                    From        To         Length        Width       Grade(1)
                    (m)         (m)          (m)          (m)        (g/t Au)
    -------------------------------------------------------------------------
    RCD4895         Hole abandoned, excessive deviation
    -------------------------------------------------------------------------
    RCD4896         Hole abandoned, excessive deviation
    -------------------------------------------------------------------------
    RCD4897         570         578           8            8            2.08
                    580         587           7            7            1.49
    -------------------------------------------------------------------------
    RCD4898         561         568           7            7            4.25
                    568         581          13           13            1.79
    -------------------------------------------------------------------------
    RCD4899         601         610           9            9            3.33
                    610         627          17           17            3.07
                    637         642           5            5            1.22
    -------------------------------------------------------------------------
    DDH4900         604         612           8            8            2.06
                    619         626           7            7            2.55
    -------------------------------------------------------------------------
    DDH4901         483         496          13           13            3.45
    -------------------------------------------------------------------------
    DDH4902         451         457           6            6            2.91
                    457         470          13           13            0.84
                    473         482           5            5            1.71
    -------------------------------------------------------------------------
    DDH4903         469         472           3            3            3.00
                    494         499           5            5            1.15
    -------------------------------------------------------------------------
    DDH4904         Drilling in progress
    -------------------------------------------------------------------------
    DDH4905         Drilling in progress
    -------------------------------------------------------------------------
    RCD4906         Hole abandoned, excessive deviation
    -------------------------------------------------------------------------
    DDH4907         537         543           6            6            4.42
    -------------------------------------------------------------------------
    DDH4908         529         534           5            5            7.04
    -------------------------------------------------------------------------
    DDW4909         Wedge hole abandoned, excessive deviation
    -------------------------------------------------------------------------
    DDH4910         Drilling in progress
    -------------------------------------------------------------------------
    DDH4911         571         583          12           12            4.94
    -------------------------------------------------------------------------
                    583         609          26           26            1.46
    -------------------------------------------------------------------------
                    614         616           2            2            1.16
    -------------------------------------------------------------------------
    DDH4912         Drilling in progress
    -------------------------------------------------------------------------
    (1) True widths may change as structure geometry is updated
    (2) Grades are uncut


                                 APPENDIX II

      Summary of Diamond Drill Holes and Mineralised Intercepts at the
                        Crushington Prospect, Reefton

    -------------------------------------------------------------------------
                                                              Azimuth    Dip
    Hole ID        North        East       RL       Depth    (Degrees  (De-
                   (NZMG)      (NZMG)      (m)       (m)       True)   grees)
    -------------------------------------------------------------------------
    RDD0047     5,896,027   2,418,527      280      277.4       075      -50
    -------------------------------------------------------------------------
    RDD0048     5,896,350   2,418,626      430      162.9       090      -50
    -------------------------------------------------------------------------
    RDD0049     5,896,056   2,418,636      335      148.2       075      -50
    -------------------------------------------------------------------------
    RDD0050     5,895,805   2,418,672      260       64.0       075      -50
    -------------------------------------------------------------------------
    RDD0051     5,895,805   2,418,672      260       18.7       075      -50
    -------------------------------------------------------------------------
    RDD0052     5,895,805   2,418,672      260      168.7       226      -50
    -------------------------------------------------------------------------
    RDD0053     5,896,350   2,418,558      445      200.7       090      -50
    -------------------------------------------------------------------------
    RDD0054     5,896,350   2,418,558      445      123.2       140      -50
    -------------------------------------------------------------------------
    RDD0055     2,418,726   5,896,350      455      150.6       090      -50
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                                        True
    Hole ID        From         To         Length     Width(1)       Grade(2)
                    (m)         (m)          (m)         (m)         (g/t Au)
    -------------------------------------------------------------------------
    RDD0047         177         178           1          0.7            0.60
                    269         270           1          0.7            0.88
    -------------------------------------------------------------------------
    RDD0048          42          51           9          6.4            1.34
                     52          56           4          2.8           11.04
                    100         101           1          0.7            0.84
    -------------------------------------------------------------------------
    RDD0049         119         120           1          0.7            1.04
                    122         123           1          0.7            3.08
    -------------------------------------------------------------------------
    RDD0050      Hole abandoned, no significant intersections
    -------------------------------------------------------------------------
    RDD0051      Redrill of RDD0050 from 53m downhole
    -------------------------------------------------------------------------
    RDD0052         153         154           1          0.3            0.77
                    165         166           1          0.3            1.86
    -------------------------------------------------------------------------
    RDD0053         113         117           4          2.8            2.02
                    121         123           2          1.4            3.31
                    188         189           1          0.7            2.39
    -------------------------------------------------------------------------
    RDD0054      Hole abandoned, intersected historical workings
    -------------------------------------------------------------------------
    RDD0055      No significant intercepts
    -------------------------------------------------------------------------
    (1) True widths may change as structure geometry is updated
    (2) Grades are uncut


                                APPENDIX III

      Summary of Diamond Drill Holes and Mineralised Intercepts at the
                        Auld Creek Prospect, Reefton

    -------------------------------------------------------------------------
                                                              Azimuth    Dip
    Hole ID        North        East       RL       Depth    (Degrees  (De-
                   (NZMG)      (NZMG)      (m)       (m)       True)   grees)
    -------------------------------------------------------------------------
    RDD0056       2417710     5893490      560      100.8       090      -60
    -------------------------------------------------------------------------
    RDD0057       2417530     5893710      540      136.6       090      -60
    -------------------------------------------------------------------------
    RDD0058       2417510     5893810      580      141.9       270      -60
    -------------------------------------------------------------------------
    RDD0059       2417665     5893900      570      100.3       090      -60
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                                        True
    Hole ID        From         To         Length     Width(1)       Grade(2)
                    (m)         (m)          (m)         (m)         (g/t Au)
    -------------------------------------------------------------------------
    RDD0056         23           24           1            1            0.84
    -------------------------------------------------------------------------
    RDD0057         97           98           1            1            0.59
    -------------------------------------------------------------------------
    RDD0058         No significant intercepts
    -------------------------------------------------------------------------
    RDD0059         No significant intercepts
    -------------------------------------------------------------------------
    (1) True widths may change as structure geometry is updated
    (2) Grades are uncut


                                 APPENDIX IV

      Summary of Diamond Drill Holes and Mineralised Intercepts at the
                       General Gordon Deposit, Reefton

    -------------------------------------------------------------------------
                                                              Azimuth    Dip
    Hole ID        North        East       RL       Depth    (Degrees  (De-
                   (NZMG)      (NZMG)      (m)       (m)       True)   grees)
    -------------------------------------------------------------------------
    RRC0042       2418714     5892093    550.8         83       062      -55
    -------------------------------------------------------------------------
    RRC0043       2418554     5892316    530.4         72       030      -60
    -------------------------------------------------------------------------
    RRC0044       2418593     5892269    530.3         72       070      -60
    -------------------------------------------------------------------------
    RRC0048       2418704     5892121    535.8         60       080      -60
    -------------------------------------------------------------------------
    RRC0049       2418685     5892141    530.5         72       030      -70
    -------------------------------------------------------------------------
    RRC0050       2418688     5892139    530.6         72       080      -60
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                                        True
    Hole ID        From         To         Length     Width(1)       Grade(2)
                    (m)         (m)          (m)         (m)         (g/t Au)
    -------------------------------------------------------------------------
    RRC0042          15          16           1          0.8            0.76
                     50          55           5          3.8             1.1
                     57          59           2          1.5            1.05
                     62          64           2          1.5             0.9
                     67          68           1          0.8            0.68
    -------------------------------------------------------------------------
    RRC0043          42          51           9          6.1            2.46
                     53          54           1          0.7            0.81
                     56          57           1          0.7            0.88
    -------------------------------------------------------------------------
    RRC0044          38          39           1          0.7             0.5
                     42          51           9          6.5             1.4
                     53          56           3          2.2            0.67
    -------------------------------------------------------------------------
    RRC0048           0           1           1          0.8            1.44
                      7           8           1          0.8            0.66
                     10          13           3          2.3            0.83
                     15          18           3          2.3            1.13
                     20          23           3          2.3             2.1
                     37          39           2          1.5            1.16
                     42          43           1          0.8            0.62
                     54          55           1          0.8            1.24
                     59          60           1          0.8            1.86
    -------------------------------------------------------------------------
    RRC0049          22          46          24         14.9            3.69
                     50          51           1          0.6            0.59
                     63          65           2          1.2            0.98
                     67          70           3          1.9            2.13
    -------------------------------------------------------------------------
    RRC0050          14          37          23           17            4.25
                     39          40           1          0.7            0.56
                     48          56           8          5.9             0.9
    -------------------------------------------------------------------------
    (1) True widths may change as structure geometry is updated
    (2) Grades are uncut




                                 APPENDIX V

      Summary of Diamond Drill Holes and Mineralised Intercepts at the
                          Empress Deposit, Reefton


    -------------------------------------------------------------------------
                                                              Azimuth    Dip
    Hole ID        North        East       RL       Depth    (Degrees  (De-
                   (NZMG)      (NZMG)      (m)       (m)       True)   grees)
    -------------------------------------------------------------------------
    RRC0045       2418759     5891817      462        102       120      -70
    -------------------------------------------------------------------------
    RRC0046       2418720     5891791    439.8        119       105      -55
    -------------------------------------------------------------------------
    RRC0047       2418720     5891795    439.7        113       085      -55
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                                        True
    Hole ID        From         To         Length     Width(1)       Grade(2)
                    (m)         (m)          (m)         (m)         (g/t Au)
    -------------------------------------------------------------------------
    RRC0045          71          93          22         12.5            5.63
    -------------------------------------------------------------------------
    RRC0046         101         102           1          0.8            1.09
                    104         112           8          6.3            3.17
    -------------------------------------------------------------------------
    RRC0047          81          82           1          0.7            2.04
                     94         100           6          4.2            2.37
    -------------------------------------------------------------------------
    (1) True widths may change as structure geometry is updated
    (2) Grades are uncut


                                 APPENDIX VI

      Summary of Diamond Drill Holes and Mineralised Intercepts at the
                           Globe Deposit, Reefton


    -------------------------------------------------------------------------
                                                              Azimuth    Dip
    Hole ID        North        East       RL       Depth    (Degrees  (De-
                   (NZMG)      (NZMG)      (m)       (m)       True)   grees)
    -------------------------------------------------------------------------
    RRC0051       2418338     5892821    499.9         60       070      -60
    -------------------------------------------------------------------------
    RRC0052       2418316     5892845    499.8         69       070      -60
    -------------------------------------------------------------------------
    RRC0053       2418278     5892837    499.9        141       070      -80
    -------------------------------------------------------------------------
    RRC0054       2418277     5892836    499.9        120       070      -60
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
                                                        True
    Hole ID        From         To         Length     Width(1)       Grade(2)
                    (m)         (m)          (m)         (m)         (g/t Au)
    -------------------------------------------------------------------------
    RRC0051          10          31          21         17.2            3.59
    -------------------------------------------------------------------------
    RRC0052           3           7           4          3.3            0.47
                     18          29          11            9            6.31
                     31          33           2          1.6            1.99
    -------------------------------------------------------------------------
    RRC0053           7          15           8          4.6            1.59
                     20          21           1          0.6            0.75
                     29          37           8          4.6            4.33
                     78          85           7            4            1.59
                     92          94           2          1.1            1.42
                     96          97           1          0.6             1.2
                    105         106           1          0.6            3.31
                    108         110           2          1.1            0.93
                    126         127           1          0.6            0.62
    -------------------------------------------------------------------------
    RRC0054          10          12           2          1.6            4.55
                     17          27          10          8.2             5.2
                     61          62           1          0.8            0.77
                     64          69           5          4.1            2.46
                     72          73           1          0.8            0.53
                     76          79           3          2.5            1.72
                     81          82           1          0.8            1.17
    -------------------------------------------------------------------------
    (1) True widths may change as structure geometry is updated
    (2) Grades are uncut


                                APPENDIX VII

      Summary of Diamond Drill Holes and Mineralised Intercepts at the
                        Didipio Deposit, Philippines

    -------------------------------------------------------------------------
    Drill-                                               True    Cu    Au
    Hole     Cutoff               From     To    Width   Width   (%)  (g/t)
    -------------------------------------------------------------------------
    DDH0201  Peak above 0.8 AuEq       0    253     253  134.1  0.217  0.356
    DDH0201  Including                 0     18      18    9.5  0.476  0.433
    DDH0201  Peak above 0.3 AuEq       0    297     297  157.4  0.193  0.317
    -------------------------------------------------------------------------
    DDH0202  Peak above 0.8 AuEq     104    128      24   13.1  0.195  0.149
    DDH0202  Peak above 0.8 AuEq     146    176      30   16.3  0.125  0.103
    DDH0202  Peak above 0.8 AuEq     212    479     267  145.4  0.390  2.420
    DDH0202  Including               371    430      59   32.1  0.730  7.580
    DDH0202  Peak above 0.3 AuEq  100.35    479  378.65  206.2  0.155  1.373
    -------------------------------------------------------------------------
    DDH0204  Peak above 0.8 AuEq     208    226      18    7.3  0.033  0.551
    DDH0204  Peak above 0.3 AuEq     154    181      27   11.0  0.038  0.360
    DDH0204  Peak above 0.3 AuEq     208    235      27   11.0  0.025  0.437
    -------------------------------------------------------------------------
    DDH0205  Peak above 0.8 AuEq     167    432     265  107.8  0.469  1.243
    DDH0205  Including               264    294      30   12.2  0.776  3.161
    DDH0205  Including               304    336      32   13.0  0.897  2.738
    DDH0205  Including               450    498      48   19.5  0.168  0.238
    DDH0205  Peak above 0.3 AuEq     110  500.3   390.3  158.7  0.357  0.903
    -------------------------------------------------------------------------
    DDH0206  Peak above 0.8 AuEq     214    544     330   91.0  0.574  1.960
    DDH0206  Including               312    338      26    7.2  2.194 10.403
    DDH0206  Including               356    366      10    2.8  1.579  6.834
    DDH0206  Including               402    430      28    7.7  5.306 19.112
    DDH0206  Peak above 0.3 AuEq     160    616     456  125.7  0.439  1.466
    -------------------------------------------------------------------------
    DDH0207  Peak above 0.8 AuEq       0    151     151  106.8  0.727  0.660
    DDH0207  Including                16    107      91   64.3  1.013  0.926
    DDH0207  Peak above 0.3 AuEq       0  200.5   200.5  141.8  0.572  0.530
    DDH0207  Including               169    197      28   19.8  0.112  0.173
    -------------------------------------------------------------------------
    DDH0208  Peak above 0.8 AuEq     270    642     372  108.8  0.555  0.956
    DDH0208  Including               339    393      54   15.8  0.794  2.451
    DDH0208  Including               475    513      38   11.1  1.402  1.794
    DDH0208  Including               553    579      26    7.6  0.966  0.953
    DDH0208  Including               595    619      24    7.0  0.637  1.294
    DDH0208  Peak above 0.3 AuEq     270    657     387  113.1  0.535  0.921
    -------------------------------------------------------------------------
    DDH0209  Peak above 0.8 AuEq     187    443     256  131.8  0.495  0.612
    DDH0209  Including               247    291      44   22.7  0.765  1.024
    DDH0209  Including               305    339      34   17.5  1.060  1.021
    DDH0209  Including               361    369       8    4.1  1.770  2.215
    DDH0209  Peak above 0.3 AuEq     187  473.3   286.3  147.5  0.451  0.562
    -------------------------------------------------------------------------
    Notes:
    1. True widths may change as structure geometry is updated
    2. Top cuts; Au to 50 ppm, Cu to 5%


                              FINANCIAL SUMMARY

    The table below sets out selected financial data relating to the quarter
and year ended December 31, 2007, with comparative data from the quarter and
year ended December 31, 2006

    -------------------------------------------------------------------------
                                       Quarter   Quarter      Year      Year
                                         Ended     Ended     Ended     Ended
                                      December  December  December  December
                                       31 2007   31 2006   31 2007   31 2006
    INCOME STATEMENT                     $'000     $'000     $'000     $'000
    -------------------------------------------------------------------------
    Gold sales                          36,615    21,635   104,395    94,750
    -------------------------------------------------------------------------
    Cost of sales, excluding
     depreciation and amortization     (25,795)  (21,167)  (81,669)  (72,684)
    -------------------------------------------------------------------------
    Other expenses                      (1,859)      476   (14,293)   (6,212)
    -------------------------------------------------------------------------
    Other income                            96        31       291       148
    -------------------------------------------------------------------------
    Earnings before interest, tax,
     depreciation & amortization
     (EBITDA) (excluding unrealized
     gain/(loss) on hedges)              9,057       975     8,724    16,002
    -------------------------------------------------------------------------
    Depreciation and amortization      (10,362)   (1,751)  (28,790)  (14,031)
    -------------------------------------------------------------------------
    Net interest expense                (3,882)     (892)  (12,702)   (3,976)
    -------------------------------------------------------------------------
    Earnings/(loss) before income tax
     and unrealized gain/(loss) on
     hedges                             (5,188)   (1,668)  (32,768)   (2,005)
    -------------------------------------------------------------------------
    Earnings/(loss) after income tax
     and before unrealized gain/(loss)
     on hedges                          (5,880)     (536)  (25,461)   (1,476)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Release from OCI of deferred
     unrealized gain/(loss) on
     designated hedges                     334    (9,584)  (16,407)  (27,684)
    -------------------------------------------------------------------------
    Gain / (loss) on fair value of
     undesignated hedges               (30,736)    6,757   (45,847)   (5,079)
    -------------------------------------------------------------------------
    Tax on unrealized (gain)/loss on
     hedges                              9,121       933    18,676    10,812
    -------------------------------------------------------------------------
    Net earnings/(loss)                (27,162)   (2,431)  (69,039)  (23,427)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Basic earnings/ (loss) per share    ($0.17)   ($0.02)   ($0.47)   ($0.29)
    -------------------------------------------------------------------------
    Diluted earnings/ (loss) per share  ($0.17)   ($0.02)   ($0.47)   ($0.29)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    CASHFLOW
    -------------------------------------------------------------------------
    Cashflows from Operating
     Activities                          5,180    (1,907)   10,675    16,048
    -------------------------------------------------------------------------
    Cashflows from Financing
     Activities                            (27)   76,619   140,757    74,405
    -------------------------------------------------------------------------
    Cashflows from Investing
     Activities                        (23,562)  (28,546) (118,675)  (49,526)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                                                             As at     As at
                                                          December  December
                                                           31 2007   31 2006
    BALANCE SHEET                                            $'000     $'000
    -------------------------------------------------------------------------
    Total Current Assets                                   183,921   120,711
    -------------------------------------------------------------------------
    Total Non Current Assets                               638,652   503,018
    -------------------------------------------------------------------------
    Total Assets                                           822,573   623,729
    -------------------------------------------------------------------------
    Total Current Liabilities                              166,311    91,185
    -------------------------------------------------------------------------
    Total Non Current Liabilities                          302,097   243,384
    -------------------------------------------------------------------------
    Total Liabilities                                      468,408   334,569
    -------------------------------------------------------------------------
    Total Shareholders' equity                             354,165   289,160
    -------------------------------------------------------------------------
    

    RESULTS OF OPERATIONS

    The company reported a loss after income tax and before unrealised gains
and losses on hedges in 2007 of $25.5 million compared to $1.5 million in
2006. This result came about as a result of reduced production from the
Macraes open pit mine, the slower than expected ramp up at Reefton, increased
costs associated with the commencement of operations at Reefton, increased
depreciation and amortisation expenses associated with the start at Reefton,
amortisation of capitalised stripping costs, increased interest costs
associated with higher levels of debt and an unrealised foreign exchange loss
on cash holdings. The additional costs were countered by a 33% increase in the
average gold price received.

    Sales Revenue
    -------------
    Gold sales revenue in the fourth quarter exceeded the comparative quarter
in 2006 by 69% or $15.0 million due to excellent gold sales volume of
58,803 ounces, augmented by a 29% increase in the average gold price received.
    Overall gold production of 63,505 was significantly higher than the same
quarter of 2006 and represented a 47% improvement on production in the third
quarter of 2007. This was driven by increased production from the Macraes open
pit mine as the completion of the significant waste removal programme allowed
the mining of higher grade ore and reduced the reliance on milling medium
grade ore stockpiles. In addition, steadily improving performance from the new
Reefton open cut mine further increased gold production as throughput, feed
grade and recoveries all increased from the third quarter.
    As in the previous quarters, revenue from gold produced from Frasers
underground ore was credited to the Frasers underground development project
and consequently not all of the increased production flowed through to sales
revenue.
    Sales revenue was further augmented by a 29% increase in the average gold
price to $754 per ounce sold. This occurred due to the combination of higher
gold spot prices and the continued benefits of the hedge restructure completed
in 2006. During the quarter 26% of gold sales were sold into forward sales
contracts compared to 42% sold into forward contracts in the equivalent
quarter of 2006.
    For the 2007 year, sales revenue exceeded that of 2006, despite lower
gold sales volumes due to 33% increase in the average gold price received.
    Gold sales volumes were lower due to lower production from the Macraes
open pit mine than 2006 due to the significant waste removal programme
completed in the year and consequential need to process significant volumes of
lower grade stockpile material. This, together with the lower grade of ore
mined in the year reduced mill feed grades at the Macraes processing facility.
    The average gold price received increased 33% to $697 per ounce due to a
combination of higher gold spot prices and the continued benefits of the hedge
restructure completed in 2006. The proportion of ounces sold into forward
sales contracts dropped to 30% of the total compared to 59% in 2006.

    Unrealized Hedge Losses
    -----------------------
    In the fourth quarter of 2007 unrealized hedge losses recorded in the
Statement of Earnings/(Loss) were $30.4 million compared with $2.8 million in
the same quarter of 2006.
    In the year ended 31 December 2007 unrealized hedge losses recorded in
the Statement of Earnings/(Loss) were $62.3 million compared with
$32.8 million in 2006.
    These unrealised losses are a function of movements in the spot gold
price.
    The unrealized hedge gains or losses required to be brought to account do
not represent a realized gain or loss incurred by OceanaGold and therefore
have no influence upon the cash revenue generated in the period, nor does the
accounting for unrealized hedges reflect their real value in terms of locking
in a future price that exceeds the cost of production, or their value as a
prudent approach to risk management.
    The derivative instruments used to manage the risk of adverse movements
in gold prices and FX rates are discussed below.

    Operating Costs & Margins
    -------------------------
    The sharply increased production from the Macraes open pit mine and the
improved performance at the Reefton open pit mine both contributed to a much
improved cash cost per ounce sold result in the fourth quarter. This reduced
to $544 per ounce compared to $718 in the third quarter of 2007 and $530 in
the fourth quarter of 2006.
    For the 2007 year, the reduced production from the Macraes open pit and
high waste to ore strip ratios in the third quarter, together with the slower
than expected ramp up at Reefton, resulted in a cash cost per ounce sold of
$556 per ounce. This is a 38% increase on the 2006 result of $404 per ounce
sold.
    From an operating efficiency perspective, cash costs per tonne processed
have only increased 2% to $13.50 and this was exchange rate related. This
result was driven by increased mill throughput and other efficiencies.
    The increased average gold price received more than offset the cash cost
per ounce increase and resulted in an increased cash operating margin of
$210 per ounce in the fourth quarter and $142 per ounce in the year. This
represents a 296% and 15% increase on the cash operating margins of the
comparative periods of 2006 respectively.
    The increased margin delivered earnings before interest, tax,
depreciation & amortisation (excluding unrealized hedge losses) of
$9.1 million in the quarter and $8.7 million for the full year.
    The result for the year was negatively impacted by a $2.7m unrealised
foreign exchange loss on cash holdings.

    Depreciation and Amortization
    -----------------------------
    Depreciation and amortization charges are calculated on a units of
production basis and are consequently higher in the fourth quarter of 2007
compared with the comparative quarter of 2006.
    In addition, the start of operations at Reefton mine and the commencement
of depreciation of these assets, together with the amortisation of deferred
waste stripping costs have further increased the charge.
    For the full year, the start up of Reefton operations has added
$6.1 million and the amortisation of deferred stripping costs has added
$10.8 million to depreciation & amortisation expense. These have more than
offset the impact of lower production at Macraes to produce a depreciation &
amortisation charge 105% higher than that of 2006.

    Interest expense
    ----------------
    The increased interest expense in the fourth quarter and in the 2007 year
is a result of the higher levels of debt carried by OceanaGold through the
periods compared with the comparative periods of 2006.
    This debt relates to the convertible notes issued in December 2006 and
March 2007, adding $6.9 million in interest and the project debt facility
drawn in late 2006 and additional equipment lease liabilities, together adding
a further $4.9 million to interest expense. This impact has been partially
offset by a $4.1 million increase in interest income.

    Net earnings/(loss)
    -------------------
    The company reported total loss after tax in the fourth quarter of 2007
of $27.9 million compared with $2.4 million in the fourth quarter of 2006. The
impact of unrealised hedge gains and losses was influential in both periods.
Earnings/(loss) before interest, tax, depreciation and amortisation (EBITDA)
is an alternative and more relevant measure of performance in each period.
    The company produced EBITDA of $9.1 million in the fourth quarter and
$8.7 million in the 2007 year, compared with $1 million and $16 million in the
same periods of 2006 respectively.
    As detailed above, the lower EBITDA for the year was primarily the result
of lower gold production at Macraes, due to processing lower grade stockpiles
whilst the Frasers Stage 4 stripping program was undertaken to expose higher
grade ore that will be mined in later periods.
    Also impacting the result was the slower than expected ramp up at the
Reefton mine and the $2.7 million unrealised foreign exchange loss on cash
holdings.

    DISCUSSION OF CASH FLOWS

    Operating Activities
    --------------------
    Cash inflows from operating activities were higher in the fourth quarter
of 2007 compared to the fourth quarter of 2006 as a result of the increased
gold sales revenue, partially offset by increased mining costs, an increase in
net interest payments associated with the higher debt levels and an increase
in working capital driven by increased inventory balances.
    Cash inflows from operating activities were lower in the 2007 year
compared to 2006, primarily as a result of increased mining costs and an
increase in debt interest payments, partially offset by increased gold sales
revenue.

    Financing Activities
    --------------------
    Cash flows from financing activities in the quarter were minor compared
to an inflow of $76.6 million in the same quarter of 2006.
    This was principally due to net inflows from the issue of convertible
notes and the drawdown of finance lease and debt facilities in the last
quarter of 2006. The financing cashflows in the last quarter of 2007 mainly
consisted of minor repayments of finance lease liabilities.
    Cash inflows from financing activities in the year ending December 31,
2007 were $140.8 million compared to an inflow of $74.4 million in 2006. This
was primarily due to $85.4 million in net proceeds from the TSX IPO completed
in July and the issuance of an additional A$30 million of convertible notes in
March.

    Investing Activities
    --------------------
    Cash outflows due to investing activities in the fourth quarter were
principally for the construction and development of the Frasers underground
mine in New Zealand and the Didipio Project in the Philippines and totalled
$11.4 million.
    Expenditure of $6.2 million was incurred in pre-stripping and
$6.0 million was spent on sustaining capital, exploration and processing plant
upgrades at Macraes.
    Capital expenditure in the year ended December 31, 2007 totalled
$118.7 million. $38.3 million was incurred on the development of the Reefton
open pit and Frasers Underground mines, $25 million on the development of the
Didipio Project, and $55.4 million on pre-stripping and sustaining activities,
exploration, and the expansion of the mining fleet.

    DISCUSSION OF FINANCIAL POSITION AND LIQUIDITY

    Company's funding and capital requirements

    The Company expects to continue to fund its planned growth and
development through a combination of the cash balance as at December 31, 2007
of $119.8 million, cash flow from operations (including sales through
derivative instruments), from various financing facilities, from the exercise
of listed share options, or from the capital markets.
    Current financing facilities available to the group include finance lease
facilities of NZ$83.5 million of which NZ$78.2 million has been drawn and a
fully drawn NZ$41 million project debt facility. In addition a consortium of
banks provides a 568,326 ounce hedging facility, secured by a pledge of the
assets of OceanaGold NZ Ltd.
    The Company's principal requirements for cash over the next twelve months
will be for the development of the Didipio Project in the Philippines.

    
    Capital commitments

    OceanaGold's capital commitments as at December 31, 2007 are as follows:

    -------------------------------------------------------------------------
                                                  Payments due by period
                                                 as at December 31, 2007
    -------------------------------------------------------------------------
                                                             $'000
                                                             (less     $'000
                                                   $'000     than)     1 - 5
                                                   Total    1 year     years
    -------------------------------------------------------------------------
    Capital commitments                           32,697    29,746     2,951
    -------------------------------------------------------------------------
    

    Financial position

    Total Current Assets
    --------------------
    Total current assets have risen by $63.2 million since December 2006. The
most significant driver of this is the increase in the cash balance by
$39.8 million due to the equity raising in July offset by significant capital
expenditure in the year.
    The balance of the increase is due to increases in current inventory
balances and the current portion of future tax assets and a reclassification
of derivative assets associated with the gold put options.

    Total Non Current Assets
    ------------------------
    The increase of $135.6 million was driven by increased Property, Plant &
Equipment and Mining Asset balances resulting from the mine development
activities at the Globe Progress, Frasers Underground and Didipio Gold and
Copper projects and the pre-stripping and sustaining capital activities at the
Macraes open pit mine. In addition, the depreciation in the U.S. dollar has
generated material foreign currency translation differences related to
Property, Plant and Equipment and Mining Assets.
    A $10.2 million reduction in derivative assets associated with the
reclassification of gold put options to current assets partially offset these
increases.

    Total Current Liabilities
    -------------------------
    The increase of $75.1 million in the year to December 31, 2007 was driven
by the $44.6 million increase in unrealised derivative liability balances due
to the increase in the spot price of gold. There was an increase in creditors
due to timing of payments and increased activities. Some of the finance lease
liabilities were also reclassified to current.

    Total Non Current Liabilities
    -----------------------------
    The increase of $58.7 million in the year to December 31, 2007 was due to
issuing the additional A$30 million in convertibles notes during March and
further draw downs of the project debt and finance lease facilities.

    Current and non-current derivative liabilities
    ----------------------------------------------
    OceanaGold currently maintains some derivative instruments to manage the
risk of adverse movements in gold prices and foreign exchange rates.
    Primary instruments are undesignated forward gold sales contracts for
over 319,788 ounces (2006: 374,037 ounces) at NZ$773, undesignated gold put
options over 248,538 ounces (2006: 320,769 ounces) with an average exercise
price of NZ$1,000 and undesignated gold call options over 104,024 ounces
(2006: 104,024 ounces) of forecast 2010 production with an average exercise
price of NZ$1,062.

    
    A summary of OceanaGold's derivatives is set out below:

                                                          December  December
                                                           31 2007   31 2006
                                                             $'000     $'000

    Current Assets
    Gold put options                                         5,181     4,298
                                                     ------------------------
    Non Current Assets
    Gold put options                                             -    10,170
                                                     ------------------------
    Current Liabilities
    Gold forward sales contracts                            97,724    63,374
    Gold call options                                       20,894    10,322
    Forward currency contracts                                   -       282
                                                     ------------------------
                                                           118,618    73,978
                                                     ------------------------
    Net Liabilities                                        113,437    59,510
                                                     ------------------------


    Shareholders' Equity
    --------------------
    A summary of OceanaGold's changes in shareholders' equity is set out
below:
                                                                  Year ended
                                                                 December 31
                                                                        2007
                                                                       $'000
                                                     ------------------------
    Total equity at beginning of financial period                   289,160
                                                     ------------------------
    Profit/(loss) after income tax                                  (69,741)
    Other movements in retained earnings                                480
    Movement in other comprehensive income                           41,229
    Equity portion of convertible debt                                3,073
    Movement in contributed surplus                                   1,135
    Exercise of options                                                 543
    Shares Issued                                                    88,286
                                                     ------------------------
    Total equity at end of financial period                         354,165
                                                     ------------------------
    

    Shareholders' equity has increased to $354.2 million as at December 31,
2007 primarily as a result of the shares issued as part of the TSX IPO and the
movement in other comprehensive income driven by a reduction in deferred
unrealised hedge losses and currency translation differences. This was offset
by the loss incurred during the year ending 31 December 2007.
    The other significant movement is the increase in the equity portion of
convertible debt associated with the issue of an additional A$30 million in
convertibles notes in March 2007.

    CRITICAL ACCOUNTING ESTIMATES AND ACCOUNTING POLICIES

    The accounting policies that involve significant management judgement and
estimates are discussed in this section. For a complete list of the
significant accounting policies, reference should be made to Note 1 of the
2007 audited consolidated financial statements of OceanaGold Corporation.

    Exploration and Evaluation Expenditure

    Exploration and evaluation expenditure is stated at cost and is
accumulated in respect of each identifiable area of interest.
    Such costs are only carried forward to the extent that they are expected
to be recouped through the successful development of the area of interest (or
alternatively by its sale), or where activities in the area have not yet
reached a stage which permits a reasonable assessment of the existence or
otherwise of economically recoverable resources, and active work is
continuing.
    Accumulated costs in relation to an abandoned area are written off to the
Statement of Earnings in the period in which the decision to abandon the area
is made.
    A regular review is undertaken of each area of interest to determine the
appropriateness of continuing to carry forward costs in relation to that area
of interest.

    Mining Properties in Production or Under Development

    Expenditure relating to mining properties in production (including
exploration, evaluation and development expenditure) are accumulated and
brought to account at cost less accumulated amortisation in respect of each
identifiable area of interest. Amortisation of capitalised costs, including
the estimated future capital costs over the life of the area of interest, is
provided on the production output basis, proportional to the depletion of the
mineral resource of each area of interest expected to be ultimately
economically recoverable.
    A regular review is undertaken of each area of interest to determine the
appropriateness of continuing to carry forward costs in relation to that area
of interest. Should the carrying value of expenditure not yet amortised exceed
its estimated recoverable amount, the excess is written off to the Statement
of Earnings.

    Asset Retirement Obligations

    OceanaGold recognises the fair value of a future asset retirement
obligation as a liability in the period in which it incurs a legal obligation
associated with the retirement of tangible long-lived assets that results from
the acquisition, construction, development and/or normal use of the assets.
OceanaGold concurrently recognises a corresponding increase in the carrying
amount of the related long-lived asset that is depreciated over the life of
the asset. The key assumptions on which the fair value of the asset retirement
obligations are based include the estimated future cash flow, the timing of
those cash flows and the credit-adjusted risk-free rate or rates on which the
estimated cash flows have been discounted. Subsequent to the initial
measurement the liability is accreted over time through periodic charges to
earnings. The amount of the liability is subject to re-measurement at each
reporting period if there has been a change to certain of the key assumptions.

    Asset Impairment Evaluations

    The carrying values of exploration, evaluation, development costs and
plant and equipment are reviewed for impairment when events or changes in
circumstances indicate the carrying value may not be recoverable. If any such
indication exists and where the carrying value exceeds the undiscounted future
cash flows from these assets, the assets are written down to the discounted
value of the future cash flows based on OceanaGold's average cost of
borrowing.

    Stock Option Pricing Model

    Stock options granted to employees or external parties are recognized at
fair value as an expense in equal instalments over the vesting period and
credited to the contributed surplus account. The expense is determined using
an option pricing model that takes into account the exercise price, the term
of the option, the impact of dilution, the non-tradable nature of the option,
the current price and expected volatility of the underlying share, the
expected dividend yield and the risk free interest rate for the term of the
option.

    Income Tax

    The Group follows the liability method of income tax allocation. Under
this method, future tax assets and liabilities are determined based on
differences between the financial reporting and tax bases of assets and
liabilities and are measured using the substantially enacted tax rates and
laws that will be in effect when the differences are expected to reverse. A
valuation allowance is provided to the extent that it is more likely than not
that those future income tax assets will not be realised.

    ESTIMATES, RISKS AND UNCERTAINTIES

    The preparation of financial statements, in conformity with Canadian
GAAP, requires management to make estimates and assumptions that affect the
amounts reported in the consolidated financial statements and related notes.
Significant areas where management's judgment is applied include ore reserve
and resource determinations, exploration and evaluation assets, mine
development costs, plant and equipment lives, contingent liabilities, current
tax provisions and future tax balances and asset retirement obligations.
Actual results may differ from those estimates.
    In addition, this document contains some forward looking statements that
involve risks, uncertainties and other factors that could cause actual
results, performance, prospects and opportunities to differ materially from
those expressed or implied by those forward looking statements. Factors that
could cause actual results or events to differ materially from current
expectations include, among other things: volatility and sensitivity to market
prices for gold; replacement of reserves; procurement of required capital
equipment and operating parts and supplies; equipment failures; unexpected
geological conditions; political risks arising from operating in certain
developing countries; inability to enforce legal rights; defects in title;
imprecision in reserve estimates; success of future exploration and
development initiatives; operating performance of current operations;
environmental and safety risks; seismic activity, weather and other natural
phenomena; failure to obtain necessary permits and approvals from government
authorities; changes in government regulations and policies including tax and
trade laws and policies; ability to maintain and further improve labour
relations and other development and operating risks.

    FOREIGN CURRENCY TRANSLATION

    The consolidated financial statements are expressed in United States
dollars ("US$") and have been translated to US$ using the current rate method
described below. The controlled entities of OceanaGold have either Australian
dollars ("A$") or New Zealand dollars ("NZ$") as their functional currency.
    OceanaGold employs the current rate method of translation for its
self-sustaining operations. Under this method, all assets and liabilities are
translated at the period end rates and all revenue and expense items are
translated at the average exchange rates for recognition in income.
Differences arising from these foreign currency translations are recorded in
shareholders' equity as a cumulative translation adjustment until they are
realized by a reduction in the net investment.
    OceanaGold employs the temporal method of translation for its integrated
operations. Under this method, monetary assets and liabilities are translated
at the year-end rates and all other assets and liabilities are translated at
applicable historical exchange rates. Revenue and expense items are translated
at the rate of exchange in effect at the date the transactions are recognized
in income, with the exception of depreciation and amortization which is
translated at the historical rate for the associated asset. Exchange gains and
losses and currency translation adjustments are included in income.

    CHANGES IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTION

    Effective January 1 2007, the Company adopted, on a prospective basis,
the new recommendations of the Canadian Institute of Chartered Accountants
with respect to stripping charges, EIC 160 Stripping Costs Incurred in the
Production Phase of a Mining Operation. The new recommendations require the
costs associated with the removal of overburden and other mine waste materials
that are incurred in the production phase of mining operations to be included
in the costs of inventory produced in the period in which they are incurred,
except when the charges represent a betterment to the mineral property.
Charges represent a betterment to the mineral property when the stripping
activity provides access to reserves that will be produced in future periods
that would not have been accessible without the stripping activity. When
charges are deferred in relation to a betterment, the charges are amortized
over the reserve accessed by the stripping activity using the units of
production method.
    As at 31 December 2007 the balance of stripping costs deferred in
accordance with the policy set out above was $23.9 million.
    These policies have been applied prospectively and prior years' financial
statements have not been restated.

    NON-GAAP MEASURES

    Throughout this document, we have provided measures prepared according to
Canadian generally accepted accounting principles ("GAAP"), as well as some
non-GAAP performance measures. Because non-GAAP performance measures do not
have any standardized meaning prescribed by GAAP, they are unlikely to be
comparable to similar measures presented by other companies.
    We provide these non-GAAP measures as they are used by some investors to
evaluate OceanaGold's performance. Accordingly, such non-GAAP measures are
intended to provide additional information and should not be considered in
isolation, or a substitute for measures of performance in accordance with
GAAP.

    DISCLOSURE CONTROLS AND PROCEDURES

    The Chief Executive Officer and Chief Financial Officer evaluated the
effectiveness of the Company's disclosure controls and procedures as at the
financial year ended December 31, 2007. Based on that evaluation, the Chief
Executive Officer and the Chief Financial Officer concluded that the design
and operation of these disclosure controls and procedures were effective as at
December 31, 2007 to provide reasonable assurance that material information
relating to the Company, including its consolidated subsidiaries, would be
made known to them by others within those entities.

    INTERNAL CONTROL OVER FINANCIAL REPORTING

    As at the financial year ended December 31, 2007, the Chief Executive
Officer and Chief Financial Officer evaluated the design of the Company's
internal control over financial reporting. Based on that evaluation, the Chief
Executive Officer and the Chief Financial Officer concluded that the design of
internal control over financial reporting was effective as at that date to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in
accordance with Canadian GAAP.

    FULL COMPANY RELEASE

    To view the full company release, including images please refer to the
company's website www.oceanagold.com.


    
           MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
    

    Management's Responsibility for Financial Reporting

    The accompanying consolidated financial statements of OceanaGold
Corporation were prepared by management in accordance with Canadian generally
accepted accounting principles. Management acknowledges responsibility for the
preparation and presentation of the consolidated financial statements,
including responsibility for significant accounting judgments and estimates
and the choice of accounting principles and methods that are appropriate to
OceanaGold Corporation and the entities it controls ("the Group's")
circumstances. The significant accounting policies of the Group are summarized
in note 2 to the consolidated financial statements.
    Management has established systems of internal control over the financial
reporting process, which are designed to provide reasonable assurance that
relevant and reliable financial information is produced.
    Ernst and Young, the Group's independent auditors, conduct an audit of
the consolidated financial statements in accordance with Canadian generally
accepted auditing standards. Their audit includes an examination, on a test
basis, of evidence supporting the amounts and disclosures in the financial
statements. As well, they make an assessment of the accounting principles used
and significant estimates made by management and they evaluate the overall
financial statement presentation.
    The Board of Directors is responsible for reviewing and approving the
consolidated financial statements and for ensuring that management fulfils its
financial reporting responsibilities. An Audit and Financial risk management
Committee assists the Board of Directors in fulfilling this responsibility.
The members of the Audit and Financial risk management Committee are not
officers of the Group. The Audit and Financial risk management Committee meets
with management as well as with the independent auditors to review the
internal controls over the financial reporting process, the consolidated
financial statements and the auditors' report. The Audit and Financial risk
management Committee reports its findings to the Board of Directors for its
consideration in approving the consolidated financial statements for issuance
to the shareholders.
    Management recognizes its responsibility for conducting the Group's
affairs in compliance with established financial standards, and applicable
laws and regulations, and for maintaining proper standards of conduct for its
activities.

    
    (Signed) Stephen A Orr                  (Signed) Ross Glossop
    Chief Executive Officer                 Chief Financial Officer
    Melbourne, Australia                    Melbourne, Australia
    27 February, 2008                       27 February, 2008



                               AUDITORS' REPORT
    

    To the Shareholders of OceanaGold Corporation

    We have audited the consolidated balance sheets of OceanaGold Corporation
as at December 31, 2007 and 2006 and the consolidated statements of operations
and retained earnings / (accumulated deficit), comprehensive loss and cash
flows for the two years then ended. These financial statements are the
responsibility of the company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
    We conducted our audit in accordance with Canadian generally accepted
auditing standards. Those standards require that we plan and perform an audit
to obtain reasonable assurance whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.
    In our opinion, these consolidated financial statements present fairly,
in all material respects, the financial position of the company as at
December 31, 2007 and 2006 and the results of its operations and its cash
flows for the two years then ended in accordance with Canadian generally
accepted accounting principles.

    
    Melbourne, Australia                    "Ernst & Young"
    27 February 2008                        Chartered Accountants



    -------------------------------------------------------------------------
                         CONSOLIDATED BALANCE SHEETS
    -------------------------------------------------------------------------
                           As at December 31, 2007

    -------------------------------------------------------------------------
    (in thousands of United                                   2007      2006
     States dollars)                               Notes     $'000     $'000

    ASSETS
    Current assets
    Cash and cash equivalents                              119 837    80 025
    Accounts receivable and other receivables          8     3 426     2 488
    Inventories                                       10    20 937    10 498
    Prepayments                                                945       508
    Future income tax assets                           6    33 595    22 894
    Derivatives                                       21     5 181     4 298
    -------------------------------------------------------------------------
    Total current assets                                   183 921   120 711

    Non-current assets
    Accounts receivable and other receivables          8         -        26
    Inventories                                       10    23 953    21 452
    Property, plant and equipment                     11   196 320   155 032
    Mining assets                                     12   415 723   316 338
    Future income tax assets                           6     2 656         -
    Derivatives                                       21         -    10 170
    -------------------------------------------------------------------------
    Total non-current assets                               638 652   503 018
    -------------------------------------------------------------------------
    TOTAL ASSETS                                           822 573   623 729
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
    Accounts payable and accrued liabilities                26 422    14 700
    Asset retirement obligation                                293         -
    Derivatives                                       21   118 618    73 978
    Employee benefits                                 20     2 291     1 550
    Interest-bearing loans and borrowings             14    18 687       957
    -------------------------------------------------------------------------
    Total current liabilities                              166 311    91 185

    Non-current liabilities
    Other obligations                                        7 717     3 466
    Employee benefits                                 20         -        81
    Interest-bearing loans and borrowings             14   198 912   140 652
    Future income tax liabilities                      6    86 250    90 763
    Asset retirement obligation                       13     9 218     8 422
    -------------------------------------------------------------------------
    Total non-current liabilities                          302 097   243 384
    -------------------------------------------------------------------------
    TOTAL LIABILITIES                                      468 408   334 569
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY
    Capital stock                                     15   334 975   246 146
    Retained earnings/(accumulated deficit)                (56 791)   11 768
    Contributed surplus                               17    32 379    28 171
    Accumulated other comprehensive income            16    43 602     3 075
    -------------------------------------------------------------------------
    TOTAL SHAREHOLDERS' EQUITY                             354 165   289 160
    -------------------------------------------------------------------------
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY             822 573   623 729
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Contingencies (note 25)
    Commitments (note 24)

    Approved by the Board of Directors:

    (Signed) James Askew                    (Signed) J Denham Shale
    Director                                Director

    The accompanying Notes to Consolidated Financial Statements are an
    integral part of these financial statements.


    -------------------------------------------------------------------------
                     CONSOLIDATED STATEMENTS OF OPERATIONS
    -------------------------------------------------------------------------
               For the years ended December 31, 2007 and 2006

    -------------------------------------------------------------------------
    (in thousands of United States dollars                    2007      2006
     except per share amounts)                     Notes     $'000     $'000
    -------------------------------------------------------------------------

    Revenue
    Gold sales                                             104 395    94 750
    Release from other comprehensive income of
     deferred unrealised loss on designated hedges         (16 407)  (27 684)
    -------------------------------------------------------------------------
                                                            87 988    67 066
    Cost of sales, excluding depreciation and
     amortisation                                          (81 669)  (72 684)
    Depreciation and amortisation                          (28 790)  (14 031)
    General & administration                               (11 632)   (5 906)
    -------------------------------------------------------------------------
    Operating loss                                         (34 103)  (25 555)
    -------------------------------------------------------------------------

    Other expenses
    Interest expense                                       (19 414)   (6 594)
    Foreign exchange loss                                   (2 661)     (306)
    -------------------------------------------------------------------------
                                                           (22 075)   (6 900)
    -------------------------------------------------------------------------

    (Loss) on fair value of undesignated hedges            (45 847)   (5 079)
    Interest revenue                                         6 712     2 618
    Other income                                       5       291       148
    -------------------------------------------------------------------------
    (Loss) before income taxes                             (95 022)  (34 768)
    Income tax recovery                                6    25 983    11 341
    -------------------------------------------------------------------------
    Net (loss)                                             (69 039)  (23 427)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net (loss) per share:                              7
    - basic                                                 ($0.47)   ($0.29)
    - diluted                                               ($0.47)   ($0.29)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
     CONSOLIDATED STATEMENTS OF RETAINED EARNINGS / (ACCUMULATED DEFICIT)
    -------------------------------------------------------------------------
               For the years ended December 31, 2007 and 2006

    -------------------------------------------------------------------------
                                                              2007      2006
    (in thousands of United States dollars)        Notes     $'000     $'000
    -------------------------------------------------------------------------

    Retained earnings at beginning of year            11       768    35 195
      Net (loss)                                           (69 039)  (23 427)
      Other                                                    480         -
    -------------------------------------------------------------------------
    Retained earnings / (accumulated deficit)
     at end of year                                        (56 791)   11 768
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
               CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)
    -------------------------------------------------------------------------
               For the years ended December 31, 2007 and 2006

    -------------------------------------------------------------------------
                                                              2007      2006
    (in thousands of United States dollars)        Notes     $'000     $'000
    -------------------------------------------------------------------------


    Net (loss)                                             (69 039)  (23 427)
    Other comprehensive income for the year,
     net of tax:
      Cash flow hedge gain                            16     9 857     1 383
      Currency translation differences                16    30 670     7 169
    -------------------------------------------------------------------------
                                                            40 527     8 552
    -------------------------------------------------------------------------
    Comprehensive (loss)                                   (28 512)  (14 875)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    The accompanying Notes to Consolidated Financial Statements are an
    integral part of these financial statements.



    -------------------------------------------------------------------------
                     CONSOLIDATED STATEMENTS OF CASHFLOWS
    -------------------------------------------------------------------------
                 For years ended December 31, 2007 and 2006

    -------------------------------------------------------------------------
                                                              2007      2006
    (in thousands of United States dollars)        Notes     $'000     $'000
    -------------------------------------------------------------------------
    Operating activities
    Net (loss)                                             (69 039)  (23 427)
    Charges/(credits) not affecting cash
      Depreciation and amortisation expense                 28 790    14 031
      Net (gain) on disposal of property, plant
       and equipment                                          (179)      (35)
      Non-cash interest charges                              7 787     1 002
      Foreign exchange (gains)/losses                        1 163         -
      Stock based compensation charge                        1 565       300
      Non-cash derivative expenses                          62 254    33 621
      Future tax (benefit)                                 (25 983)  (11 341)

    Changes in non-cash working capital
      Accrued interest receivable                                -      (228)
      (Increase) in accounts receivable and other
       receivables                                            (520)   (1 891)
      (Increase)/decrease in inventory                      (9 782)    4 933
      (Decrease)/increase in taxes payable                       -      (264)
      (Decrease)/increase in accounts payable               10 548    (1 939)
      (Decrease)/increase in other provisions                4 071     1 286
    -------------------------------------------------------------------------
    Net cash provided by operating activities               10 675    16 048
    -------------------------------------------------------------------------

    Investing activities
    Proceeds from sale of property, plant and
     equipment                                                 330       596
    Payments for property, plant and equipment             (43 630)  (48 852)
    Payments for mining assets: exploration and
     evaluation                                            (27 282)   (3 313)
    Payments for mining assets: development                (15 435)   (2 677)
    Payments for mining assets: in production              (32 658)   (2 841)
    Net cash acquired in business combination                    -     7 561
    -------------------------------------------------------------------------
    Net cash used for investing activities                (118 675)  (49 526)
    -------------------------------------------------------------------------

    Financing activities
    Proceeds from issue of shares                           94 702       320
    Payment of share issues costs                           (9 023)        -
    Payment of capital lease liabilities                    (1 808)   (6 706)
    Proceeds from capital lease                             12 651    13 101
    Proceeds from issue of convertible notes                24 213    57 870
    Proceeds from other borrowings                          20 021     9 820
    -------------------------------------------------------------------------
    Net cash provided by financing activities              140 757    74 405
    -------------------------------------------------------------------------

    Effect of exchange rate changes on cash and
     cash equivalents                                        7 055     4 282
    -------------------------------------------------------------------------
    Net increase in cash and cash equivalents               39 812    45 209
    Cash and cash equivalents at beginning of year          80 025    34 816
    -------------------------------------------------------------------------
    Cash and cash equivalents at end of year               119 837    80 025
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Cash interest paid                                     (11 627)   (5 592)

    The accompanying Notes to Consolidated Financial Statements are an
    integral part of these financial statements.
    

    To view Notes to Consolidated Financial Statement:
    http://files.newswire.ca/435/Oceana2Notes4web.pdf





For further information:

For further information: Mr Darren Klinck, Vice President, Corporate and
Investor Relations, OceanaGold Corporation, Tel: 61 3 9656 5300


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