07-Dec-2020:  OceanaGold Comments on Didipio Mine FTAA Renewal Progress

Sounds like some positive news concerning OGC's Didipio gold mine in the Philippines, which has been shut down for some time.  Not enough to tempt me into taking a position in OGC however.  I would still avoid any ASX-listed gold miner who operates in the Philippines or Thailand.  Indonesia is also quite risky from a sovereign risk perspective, as are parts of Africa and South America, but the Philippines and Thailand have been two of the riskiest countries to operate gold mines in for the past few years, in my view, and there are so many other alternative gold miners that we can invest in who do NOT have those risks.  All mining involves risk, but mining in the safest countries in the world removes a significant amount of risk, and based on the last few years you could NOT conclude that either the Philippines or Thailand were safe countries for Australian-based companies to operate gold mines.

28-Aug-2020:  OceanaGold Provides Corporate Update

Another reminder here about the sovereign risk associated with gold mining in various geographies, like West Africa and in OGC's case, the Philippines.  We're not talking about the chance that a national government's treasury or central bank will default on their sovereign debt, or else implement foreign exchange rules or restrictions that will significantly reduce or negate the worth of its forex contracts, that being the most obvious example of sovereign risk, but the type of sovereign risk where the government of a country can move the goalposts or pull the rug out from under a foreign company operating in their country, for instance by nationalising an industry, or refusing to renew a permit, or by changing the operating conditions under which a company must comply to stay operating within the country.  There are other risks, such as political instability (Mali) and sudden dramatic royalty or tax increases or additions.  

Concerning their Didipio mine in the Philippines, OGC said today:  "The Company continues to engage with the Philippine National Government on advancing the renewal of the FTAA which is currently with the Office of the President pending a decision.  The Company has not been provided any timeline on when a decision will be made on the renewal.  Since mid-April, the Company has temporarily laid-off approximately 500 workers and is required to either reinstate or terminate the workers effective mid-October.  The Company will be required to provide notices to the workforce of its intent in mid-September."

There's more, but the crux of it is that the future of the Didipio mine is completely in the hands of the Philippines Government now.  And that's why I avoid companies like OGC, as I explained in my straw on RSG's results this morning.

13-July-2020:  OceanaGold Provides Update on Philippines Legal Proceedings

There is plenty of "Sovereign Risk" trying to mine gold in the Philippines.

Further Reading (from 9 years ago, still applicable today):  https://www.mining.com/the-mining-sectors-two-biggest-risks-country-risk-and-resource-nationalism/

[I do not hold OGC shares]

05-Jul-19:  OceanaGold Corporation (ASX: OGC) is not a gold producer that I've ever owned shares in, and that's got a lot to do with where their gold mines are located, being in the Philippines and on New Zealand's south island.  A number of Australian companies have made truckloads of cash from operating gold mines in places like Thailand, the Philippines, Africa, Indonesia and South America, but a significant number of them have had a whole bunch of trouble with the various authorities and governments in those countries. 

The trouble tends to occur when the gold price is high.  It seems that people start thinking about all that profit, and want to keep more of it for themselves. 

The types of issues that seem to occur regularly include security issues, governments and authorities moving the goalposts or attempting to renegotiate existing agreements, or refusing to extend or rollover expiring agreements.  That sort of thing.  New Zealand isn't into that sort of thing.  New Zealand is just not Australia.  I just prefer my gold producers to have at least one main mine in Australia, and preferably most of their gold mines in Australia, so they can benefit from the Australian dollar depreciating against the US$ as well as from the US$ gold price rising.  Don't like the Philippines much as a place for ASX-listed companies to operate gold mines.  I lost a fair chunk of cash on RED 5 (ASX: RED) a few years back - when they were 100% located in the Philippines.  Did OK from Medusa Mining (ASX: MML) about 10 years ago when they were on their way up to $8+, but glad I don't still hold them - they are now 64 cents.  They call it "sovereign risk" and it can take a company from hero to zero in a pretty short period.  OGC isn't at zero yet of course, and they've still got NZ, so they won't be going to zero, but they could easily halve.  You can read their latest annoucement here, and the following are a couple of links to articles about their issues there at Didipio:

http://www.afr.com/business/mining/oceanagold-stung-by-fresh-sovereign-risk-in-philippines-20190705-p524mu

http://www.mining-journal.com/copper-news/news/1366654/oceanagold-halted-by-didipio-revolt

http://www.reuters.com/article/us-philippines-mining/oceanagold-stops-trucking-at-philippines-gold-mine-after-dispute-idUSKCN1TZ0V0

She's a risky business.  The term "gold mine" has become a common term to describe a situation where there's easy money to be made, and lots of it, but not all gold mines are created equal.  Those located in countries like the Philippines, Thailand and Indonesia - particularly those that are majority owned by people who are not from those countries - are certainly riskier propositions than many other gold mines are.  Caveat Emptor!