Wellington, July 29 NZPA - OceanaGold Corp is forecasting increased gold production in the third and fourth quarters after posting earnings before interest, tax, depreciation, amortisation, unrealised items and hedges of $US39.2 million ($54 million) in the second quarter.

The owner of the Macraes and Reefton gold mines said it produced 67,541 ounces of gold in the second quarter, taking half-year production to 132,832 ounces.

Its quarter-on-quarter cash operating margin increased 226 percent to $US627 per ounce as a result of changing to selling gold production on the spot market.

The company said an extreme rainfall event at the Macraes goldfield in May did have a negative impact when 50 percent of the average annual rainfall was recorded over a two and a half day period.

Chief executive Paul Bibby, said the second quarter and half year results demonstrated a solid outcome with the expectation of further production increases in the second half of the year.

"This was the first quarter in the company's history where OceanaGold has been hedge free and 100 percent exposed to the spot market.

"This has significantly increased our ability to strengthen the balance sheet and has provided the flexibility to direct investment back into the business as demonstrated by the recent announcement to increase the exploration budget at Reefton," he said.

The company's accounts show bottom line net earnings of $US7.96m in the three months to June 30 from $US40.11m in the same quarter last year. They show an operating profit of $20.995m in the three months from $7.22m in the same quarter last year.