/NOT FOR DISSEMINATION OR DISTRIBUTION IN
THE UNITED STATES AND NOT FOR
DISTRIBUTION TO US NEWSWIRE SERVICES./
(All financial figures in US Dollars unless
otherwise stated)
MELBOURNE, April 29, 2019
/CNW/ - OceanaGold Corporation (TSX: OGC / ASX: OGC) (the
"Company") reported its first quarter 2019 financial and
operational results for the quarter ended March 31, 2019. Details of the consolidated
financial statements and the Management Discussion and Analysis
("MD&A") are available on the Company's website at
www.oceanagold.com
Key Highlights
- Consolidated gold production of 125,681 ounces and copper
production of 3,910 tonnes.
- Consolidated All-In Sustaining Costs ("AISC") of $1,026 per ounce on sales of 121,144 ounces gold
and 3,324 tonnes copper.
- Revenue of $179.5 million with
Earnings Before Interest, Depreciation and Amortisation ("EBITDA")
of $64.4 million and a Net Profit of
$12.4 million.
- Cash balance of $86.5 million
with total immediately available liquidity of $136.5 million.
- Exploration success continued in New
Zealand with initial resource announced at WKP and increased
resource for the Martha Underground Project.
- Upgraded regrinding circuit installed and being commissioned at
Haile including the Tower Mill and IsaMillTM.
- Didipio received four awards at the Global CSR Awards in
Malaysia, including top honours
for Environment Excellence and Women Empowerment.
- Consolidated 2019 production and cost guidance maintained.
Mick Wilkes, President and CEO
said, "Our start to the new year consisted of solid operating and
financial performance from Didipio and Macraes and major steps
forward in advancing our organic growth initiatives particularly at
Waihi. It did, however, include continued mining challenges at
Haile. With multiple operations, we were able to achieve good cash
flows and a positive return which positions us well for the
remainder of the year."
"At Haile the first two months of the year were challenging for
us with low production, productivity and high costs. For much of
the quarter the mine remained saturated following the heavy
rainfall experienced in the fourth quarter and start of the year.
Access to higher grades were restricted and pre-stripping the
saprolitic clay material proved challenging." He added, "Although
the Company mined lower tonnes and grades in the upper zones of
Snake pit than expected, the reconciliation has recently better
aligned with our resource model as we've mined lower benches.
Improvement plans implemented this year became effective in March
with a considerable improvement to productivity and
production."
"Didipio continues to deliver consistently positive results with
strong operating performance and continued ramp-up of underground
operations. Didipio maintains its standing as a world-class mining
operation with industry leading safety performance while continuing
to receive multiple global accolades for environmental and social
performance."
"In New Zealand, Macraes had
another strong quarter of production and strong margins on the back
of strong head grades from Coronation North. At Waihi, production
was lower as expected due mainly to mine sequencing whereby we are
mining lower grade zones of Correnso Deeps and other veins."
"Organic growth initiatives continued to advance well with a
focus on the Martha Underground mine planning and resource
drilling, WKP exploration and Golden Point underground study at
Macraes. In addition, the process plant expansion at Haile is on
track including the installation and commissioning of the
IsaMillTM with the tie-in taking place successfully in
early April."
Table 1 – Production and Cost Results Summary
Quarter ended 31 Mar
2019
|
Haile
|
Didipio
|
Waihi
|
Macraes
|
Consolidated
|
Q1 2019
|
Q4 2018
|
Gold
Produced
|
koz
|
25.7
|
33.6
|
15.1
|
51.2
|
125.7
|
126.7
|
Gold Sales
|
koz
|
24.8
|
29.1
|
15.1
|
52.2
|
121.1
|
132.2
|
Average Gold
Price
|
US$/oz
|
1,301
|
1,324
|
1,300
|
1,304
|
1,308
|
1,239
|
Copper
Produced
|
kt
|
-
|
3.9
|
-
|
-
|
3.9
|
2.9
|
Copper
Sales
|
kt
|
-
|
3.3
|
-
|
-
|
3.3
|
3.1
|
Average Copper
Price
|
US$/lb
|
-
|
3.12
|
-
|
-
|
3.12
|
3.04
|
|
|
|
|
|
|
|
|
Cash Costs
|
US$/oz
|
1,164
|
394
|
767
|
603
|
688
|
563
|
All-In Sustaining
Costs
|
US$/oz
|
1,787
|
638
|
988
|
892
|
1,026
|
814
|
Table 2 – Financial Summary
|
|
|
|
Quarter ended 31 Mar
2019
|
Q1
|
Q4
|
Q1
|
(US$m)
|
31 Mar
2019 (4)
|
31 Dec
2018
|
31 Mar 2018
(1)
|
Revenue
|
179.5
|
183.3
|
196.7
|
Cost of sales,
excluding depreciation and amortisation
|
(101.0)
|
(95.3)
|
(84.7)
|
General and
administration – other
|
(11.6)
|
(12.7)
|
(10.2)
|
General and
administration – indirect
taxes (2)
|
(2.8)
|
(3.1)
|
(2.1)
|
Foreign currency
exchange gain/(loss)
|
(0.2)
|
0.6
|
0.6
|
Other
income/(expense)
|
0.5
|
0.9
|
0.6
|
EBITDA (excluding
gain/(loss) on undesignated hedges and impairment
charge)
|
64.4
|
73.7
|
100.9
|
Depreciation and
amortization
|
(40.4)
|
(45.3)
|
(51.4)
|
Net interest expense
and finance costs
|
(3.6)
|
(2.8)
|
(3.8)
|
Earnings before
income tax (excluding gain/(loss) on undesignated hedges and
impairment charge)
|
20.4
|
25.6
|
45.8
|
Income tax expense on
earnings
|
(4.4)
|
(8.2)
|
(7.2)
|
Earnings after
income tax and before gain/(loss) on undesignated hedges and
impairment charge
|
16.0
|
17.4
|
38.6
|
Write off deferred
exploration expenditure / investment
(3)
|
(4.6)
|
(1.2)
|
-
|
Gain/(loss) on fair
value of undesignated hedges
|
1.4
|
(5.9)
|
6.0
|
Tax (expense) /
benefit on gain/loss on undesignated hedges
|
(0.4)
|
0.6
|
-
|
Share of loss from
equity accounted associates
|
(0.0)
|
(0.1)
|
(0.1)
|
Net
Profit
|
$12.4
|
10.9
|
44.5
|
Basic earnings per
share
|
$0.02
|
$0.02
|
$0.07
|
Diluted earnings per
share
|
$0.02
|
$0.02
|
$0.07
|
(1)
|
The Company's
consolidated financial results for the quarter ended March 31, 2018
reflected IFRS 15 adoption from January 1, 2018.
|
(2)
|
Represents
indirect taxes in the Philippines specifically excise tax (expensed
as from April 1, 2018), local business and property taxes. This
value is included in the Company's AISC calculation as from January
1.
|
(3)
|
Deferred
exploration related costs for the La Curva and Claudia projects
have been written off in the quarter ended March 31, 2019 following
termination of the agreements with Mirasol Resources
Ltd.
|
(4)
|
The Company's
consolidated financial results for the quarter ended March 31, 2019
reflected IFRS 16 adoption from January 1, 2019.
|
Table 3 – Cash Flow Summary
|
|
|
|
Quarter ended 31 Mar
2019
|
Q1
|
Q4
|
Q1
|
(US$m)
|
31 Mar
2019
|
31 Dec
2018
|
31 Mar
2018
|
Cash flows from
Operating Activities
|
39.0
|
95.8
|
77.1
|
Cash flows used in
Investing Activities
|
(57.9)
|
(51.2)
|
(59.1)
|
Cash flows used in
Financing Activities
|
(2.6)
|
(3.3)
|
(4.4)
|
Operations
For the first quarter, the Company produced 125,681 ounces of
gold, 3,910 tonnes of copper and 89,280 ounces of silver. Gold
production was broadly in-line with the previous quarter and first
quarter of 2018. Quarter-on-quarter increase in production from
Didipio was partially offset by decreased production from the
New Zealand operations and
Haile.
Consolidated All-In Sustaining Costs ("AISC") for the first
quarter was $1,026 per ounce on sales
of 121,144 ounces of gold. The quarter-on-quarter increase in AISC
reflects higher costs, particularly mining costs at Haile, higher
total sustaining capital, combined with lower average feed grades
and gold sales volumes.
In the first quarter, the Haile operation produced 25,717 ounces
of gold, including 12,819 ounces in the month of March, a 95%
improvement on the previous two months. The significant increase in
production in March is a function of improvements made at the mine,
significantly better weather, improvements in staffing and access
to higher grade ore zones. For the quarter, the operation mined 3.8
million tonnes including 0.6 million tonnes of ore. Total material
mined in March increased 53% from February. The total mill feed for
the quarter was 749k tonnes including
273k tonnes milled in the month of
March representing a 15% improvement on the previous months.
Mining unit costs were higher than expected due to the
introduction of a mining contractor to remove softer clay rich
material and infrastructure improvements such as the installation
of 11 additional water depressurisation wells.
Since September 2018, the site has
received nearly 50 inches of rain including approximately 10 inches
in January and February. This compares to an average rainfall of
approximately 3.8 inches per month historically. Despite this
unusually wet weather and severe storms, the operation did not
sustain any environmental breaches.
To mitigate against future high seasonal rainfall periods, an
additional 15 water depressurisation wells are planned along with
the continued removal of softer clay material using a contractor
for the remainder of the year. The Company expects production
will increase in the second quarter and second half of 2019 on
higher grades and better mine productivity while costs are expected
to decrease throughout the year.
Financial
In the first quarter, the Company generated $179.5 million in revenue, which was similar to
the previous quarter with lower sales offset by a higher gold price
received. The EBITDA for the quarter was $64.4 million resulting in an EBITDA margin of
approximately 36%. The quarter-on-quarter decrease in EBITDA was
driven by higher operating costs, mainly at Haile. Net Profit for
the quarter was $12.4 million or
$0.02 per share on a fully diluted
basis. On an adjusted net profit basis (before unrealised losses on
undesignated hedges and impairment charge) profit for the first
quarter was $16.0 million or
$0.03 per share fully diluted.
For the first quarter, the Company generated operating cash
flows of $39.0 million which compares
to $95.8 million in the previous
quarter and $77.1 million in the
first quarter of 2018. The quarter-on-quarter decrease in cash flow
relates mainly to lower EBITDA and unfavourable movements in
working capital rather than favourable movements in working capital
recorded in the prior quarter. Fully diluted cash flow per share
before working capital was $0.10 for
the quarter.
As at the end of March 2019, the
Company's cash balance stood at $86.5
million, excluding approximately $45.7 million held in strategic equity
investments. Total liquidity was $136.5
million while net debt was $99.2
million. In the first quarter, the Company paid $13.8 million in tax in New Zealand while continuing to invest in its
organic growth opportunities.
Growth
The Company's organic growth opportunities particularly at Haile
and Waihi continue to advance well while exploration remains an
important component to enabling the Company's growth strategy.
At Waihi, the Company announced an upgrade to the resource for
the Martha Project. This followed receipt of resource consents
(permits) in early February allowing the advancement of the project
to operations. In the first quarter, the Company announced an
initial resource at its highly prospective WKP prospect. Over the
course of the year, the Company will complete a feasibility study
for the Waihi operation while continuing its resource drilling and
mine plans for the Martha Underground.
At Haile, the Company successfully completed installation of the
Tower Mill in the first quarter. Early in the second quarter, the
Company successfully completed an extended shutdown of the process
plant to complete maintenance activities and connect the
IsaMillTM, which is now operating in circuit. Permitting
of the larger open pits and the Horseshoe underground at Haile
continues to progress well and the Company expects receipt of these
permits by the end of 2019 or early 2020. The front-end engineering
design activities for the Horseshoe underground are currently
underway and a Project Director, who previously led the Didipio
Underground construction, has been appointed to manage the
Horseshoe development.
At Macraes, the Company has previously stated that through
exploration and mine planning, it is seeking to extend the mine
life. One of these opportunities is at Golden Point, where the
Company is investigating the potential for a standalone underground
operation.
First Quarter 2019 Results and Webcast
The Company will host a conference call / webcast to discuss the
results at 7:30 am on Tuesday April 30,
2019 (Melbourne, Australian
Eastern Standard Time) / 5:30 pm on Monday
April 29, 2019 (Toronto,
Eastern Daylight Time).
Webcast Participants
To register, please copy and paste the link below into your
browser:
https://event.on24.com/wcc/r/1964727/BC09B89827D8C33EB9F9EC0D8CFC9941
Teleconference Participants (required for those
who wish to ask questions)
Local (toll free) dial in numbers are:
North America: 1 888 390
0546
Australia: 1 800 076 068
United Kingdom: 0 800 652
2435
Switzerland: 0 800 312 635
All other countries (toll): + 1 416 764 8688
Playback of Webcast
If you are unable to attend the call, a recording will be
available for viewing on the Company's website.
About OceanaGold
OceanaGold Corporation is a mid-tier, high-margin, multinational
gold producer with assets located in the
Philippines, New Zealand
and the United States. The
Company's assets encompass the Didipio Gold-Copper Mine located on
the island of Luzon in the
Philippines. On the North Island of New Zealand, the Company operates the
high-grade Waihi Gold Mine while on the South Island of
New Zealand, the Company operates
the largest gold mine in the country at the Macraes Goldfield which
is made up of a series of open pit mines and the Frasers
underground mine. In the United
States, the Company operates the Haile Gold Mine, a
top-tier, long-life, high-margin asset located in South Carolina. OceanaGold also has a
significant pipeline of organic growth and exploration
opportunities in the Americas and Asia-Pacific regions.
OceanaGold has operated sustainably since 1990 with a proven
track-record for environmental management and community and social
engagement. The Company has a strong social license to operate and
works collaboratively with its valued stakeholders to identify and
invest in social programs that are designed to build capacity and
not dependency.
In 2019, the Company expects to produce between 500,000 to
550,000 ounces of gold and 14,000 to 15,000 tonnes of copper at
All-In Sustaining Costs ranging between $850 and $900 per
ounce sold.
Cautionary Statement for Public Release
Certain information contained in this public release may be
deemed "forward-looking" within the meaning of applicable
securities laws. Forward-looking statements and information relate
to future performance and reflect the Company's expectations
regarding the generation of free cash flow, execution of business
strategy, future growth, future production, estimated costs,
results of operations, business prospects and opportunities of
OceanaGold Corporation and its related subsidiaries. Any statements
that express or involve discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives, assumptions
or future events or performance (often, but not always, using words
or phrases such as "expects" or "does not expect", "is expected",
"anticipates" or "does not anticipate", "plans", "estimates" or
"intends", or stating that certain actions, events or results
"may", "could", "would", "might" or "will" be taken, occur or be
achieved) are not statements of historical fact and may be
forward-looking statements. Forward-looking statements are subject
to a variety of risks and uncertainties which could cause actual
events or results to differ materially from those expressed in the
forward-looking statements and information. They include, among
others, the accuracy of mineral reserve and resource estimates and
related assumptions, inherent operating risks and those risk
factors identified in the Company's most recent Annual Information
Form prepared and filed with securities regulators which is
available on SEDAR at www.sedar.com under the Company's name. There
are no assurances the Company can fulfil forward-looking statements
and information. Such forward-looking statements and information
are only predictions based on current information available to
management as of the date that such predictions are made; actual
events or results may differ materially as a result of risks facing
the Company, some of which are beyond the Company's control.
Although the Company believes that any forward-looking statements
and information contained in this press release is based on
reasonable assumptions, readers cannot be assured that actual
outcomes or results will be consistent with such statements.
Accordingly, readers should not place undue reliance on
forward-looking statements and information. The Company expressly
disclaims any intention or obligation to update or revise any
forward-looking statements and information, whether as a result of
new information, events or otherwise, except as required by
applicable securities laws. The information contained in this
release is not investment or financial product advice.
![OceanaGold Corporation Q1 2019 MD&A (CNW Group/OceanaGold Corporation) OceanaGold Corporation Q1 2019 MD&A (CNW Group/OceanaGold Corporation)](https://mma.prnewswire.com/media/878847/OceanaGold_Corporation_OceanaGold_Reports_First_Quarter_2019_Res.pdf?p=pdfthumbnail)
![OceanaGold Corporation (CNW Group/OceanaGold Corporation) OceanaGold Corporation (CNW Group/OceanaGold Corporation)](https://mma.prnewswire.com/media/878819/OceanaGold_Corporation_OceanaGold_Reports_First_Quarter_2019_Res.jpg)
SOURCE OceanaGold Corporation