OceanaGold Corporation [ASX:OGC] has plunged by nearly 5% this morning after providing more updates on its mining operations in the Philippines. The shares are trading right now at $4.05.
Earlier this morning, the share price dipped as low as $3.95, indicating a poor market response to the company’s announcement.
What was in OceanaGold’s announcement?
Several reports alleged that production had halted at the company’s Didipio mine in the Philippines. The purpose of OceanaGold’s announcement this morning was to deny these rumours and reassure us that the mine continues to operate without interruption.
The company also sought to confirm that it had lodged its application for renewal of its Financial or Technical Assistance Agreement (FTAA) with the Philippines government all the way back in March last year.
So what’s behind the rumours?
What’s actually going on at Didipio?
This isn’t the first time Didipio has been in the news.
Back in 2017, the notorious mine was apparently threatened with suspension by the Duterte government due to supposedly causing a decline in agricultural production.
People also alleged that the company’s blasting operation had caused destruction to residential houses.
But OceanaGold maintains that the mine only has benefits for the neighbouring communities, in its provision of jobs and socioeconomic prosperity. The operation does indeed employ thousands of Philippine workers, both directly and indirectly through partnerships with various organisations.
But it appears that many investors aren’t convinced.
Some say any press is good press, but in this case I’d have to say different.
Unless Didipio cleans up its rep, it’s possible share price instability could continue to plague the multinational company.
For Money Morning
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