/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, Oct. 31, 2019 /CNW/ - OceanaGold Corporation
(TSX: OGC) (ASX: OGC) (the "Company") reported its
third quarter 2019 financial and operational results for the
quarter ended September 30, 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 production of 362,450 ounces of gold and 10,187
tonnes of copper in the nine months ended September 30, 2019, including third quarter
production of 107,478 ounces of gold and 2,316 tonnes of
copper.
- Year-to-date ("YTD") operating cash flow of $157.6 million, including $32.4 million in the third quarter.
- Immediately available liquidity at $105.6 million, including $55.6 million of cash on hand.
- Revenue of $499.1 million with
Earnings before Interest, Depreciation and Amortisation ("EBITDA")
of $169.0 million and a net profit of
$5.8 million in the nine months ended
September 30, 2019.
- Third quarter revenue of $133.6
million, EBITDA of $33.9
million and a net loss of $21.9
million (including $16.6
million of unrealised losses on undesignated hedges after
tax).
- All-In Sustaining Costs ("AISC") of $1,087 per ounce on sales of 341,100 ounces of
gold and 6,901 tonnes of copper in the nine months ended
September 30, 2019.
- Third quarter consolidated AISC of $1,122 per ounce on sales of 94,347 ounces of
gold and no copper sales.
- The Company continues to work constructively with the
Philippine national government on a Financial or Technical
Assistance Agreement renewal. While this matter progresses,
operations at Didipio remain temporarily suspended.
- Strong exploration results at Haile, Waihi's Martha Underground
and Macraes Golden Point underpinning significant organic growth
pipeline.
- Subsequent to quarter end, secured New Zealand Overseas
Investment Office approval to acquire rural land as part of the
expansion plans at Waihi.
Mick Wilkes, President and CEO of
OceanaGold said, "We've had a challenging time at Didipio this
quarter where actions from the provincial and local governments
forced us to temporarily suspend underground mining while ceasing
all trucking of supplies and concentrate. As a result, we did not
record any gold or copper sales from Didipio during the quarter and
that adversely impacted our financial results. Despite this impact,
and with multiple mines in our portfolio, we ended the third
quarter with approximately $56
million in cash, available liquidity of $106 million and a modest level of debt."
"Elsewhere our New Zealand
operations continued to deliver to plan while Haile demonstrated
another successive quarter of productivity improvements on nearly
all operating measures. Some production from Haile has been
deferred to the fourth quarter as we were delayed in accessing some
high-grade ore at the bottom of the Snake pit. We expect continued
operational improvement from Haile, and we are confident that we
have the right team in place to deliver positive results over the
long-term."
"Looking ahead, we expect production at Waihi in the fourth
quarter to be similar to the third quarter, and production from
Haile and Macraes to increase as we access and process higher grade
ore. The timing of a resumption of normal operations at Didipio
remains uncertain. However, we continue to work in partnership with
the Philippine National Government on a renewal of the FTAA."
"The Didipio Mine is a template for responsible mining in
the Philippines, and our workforce
comprising 97% Philippine nationals are some of the best miners
globally. This workforce remains in a state of operational
readiness in anticipation of either an FTAA renewal or a successful
legal challenge through the Philippine Court of Appeals against the
Governor of Nueva Vizcaya's and
local government unit's actions."
Table 1 – Production and Cost Results Summary
|
|
|
|
|
|
|
Quarter ended 30
Sept 2019
|
|
Haile
|
Didipio
|
Waihi
|
Macraes
|
Consolidated
|
Q3 2019
|
Q2 2019
|
Gold
Produced
|
koz
|
36.8
|
16.7
|
16.0
|
37.9
|
107.5
|
129.3
|
Gold Sales
|
koz
|
42.1
|
(0.6)
|
15.3
|
37.6
|
94.3
|
125.6
|
Average Gold
Price
|
US$/oz
|
1,477
|
-
|
1,481
|
1,482
|
1,414(1)
|
1,331
|
Copper
Produced
|
kt
|
-
|
2.3
|
-
|
-
|
2.3
|
4.0
|
Copper
Sales
|
kt
|
-
|
-
|
-
|
-
|
-
|
3.6
|
Average Copper
Price
|
US$/lb
|
-
|
-
|
-
|
-
|
-
|
2.60
|
|
|
|
|
|
|
|
|
Total Ore
Mined
|
kt
|
669
|
92
|
115
|
1,181
|
2,057
|
2,836
|
Tonnes
Processed
|
kt
|
834
|
604
|
117
|
1,471
|
3,026
|
3,431
|
Gold Grade
Processed
|
g/t
|
1.75
|
0.97
|
4.93
|
0.98
|
1.34
|
1.40
|
Gold
Recovery
|
%
|
78.1
|
89.4
|
86.3
|
81.9
|
82.4
|
83.8
|
|
|
|
|
|
|
|
|
Cash Costs
|
US$/oz
|
888
|
0
(2)
|
686
|
805
|
828
|
684
|
All-In Sustaining
Costs
|
US$/oz
|
1,106
|
0
(2)
|
778
|
1,262
|
1,122
|
1,118
|
|
|
|
|
|
|
|
Year to date 30
Sept 2019
|
|
Haile
|
Didipio
|
Waihi
|
Macraes
|
Consolidated
|
YTD 2019
|
YTD
2018
|
Gold
Produced
|
koz
|
99.7
|
83.5
|
52.3
|
127.0
|
362.4
|
406.6
|
Gold Sales
|
koz
|
100.9
|
60.2
|
50.5
|
129.5
|
341.1
|
400.6
|
Average Gold
Price
|
US$/oz
|
1,380
|
1,385
|
1,361
|
1,358
|
1,346
|
1,315
|
Copper
Produced
|
kt
|
-
|
10.2
|
-
|
-
|
10.2
|
12.1
|
Copper
Sales
|
kt
|
-
|
6.9
|
-
|
-
|
6.9
|
11.4
|
Average Copper
Price
|
US$/lb
|
-
|
2.84
|
-
|
-
|
2.84
|
3.05
|
|
|
|
|
|
|
|
|
Total Ore
Mined
|
Kt
|
1,852
|
1,173
|
333
|
4,616
|
7,974
|
7,839
|
Tonnes
processed
|
Kt
|
2,341
|
2,633
|
338
|
4,452
|
9,763
|
9,241
|
Gold grade
processed
|
g/t
|
1.69
|
1.11
|
5.55
|
1.07
|
1.39
|
1.58
|
Recovery
|
%
|
77.9
|
88.5
|
86.5
|
82.8
|
83.3
|
86.4
|
|
|
|
|
|
|
|
|
Cash Costs
|
US$/oz
|
896
|
481
|
695
|
718
|
725
|
465
|
All-In Sustaining
Costs
|
US$/oz
|
1,366
|
694
|
855
|
1,142
|
1,087
|
751
|
|
|
(1)
|
Realised gains and
losses on gold hedging are included in the consolidated average
gold price.
|
(2)
|
Didipio recorded
nil gold sales in the quarter ended 30 September 2019 and therefore
did not record an AISC on an ounce sold basis. An AISC on gold
produced during Q3 will be recognised on sale.
|
Table 2 – Financial Summary
Quarter ended 30 Sept
2019
(US$m)
|
Q3
(5)
30 Sept
2019
|
Q2
30 June
2019
|
Q3
30 Sept
2018
|
YTD
(4)
Sept 30
2019
|
YTD
(1) Sept 30
2018
|
Revenue
|
133.6
|
186.0
|
186.8
|
499.1
|
589.2
|
Cost of sales,
excluding depreciation and amortization
|
(78.4)
|
(99.7)
|
(92.3)
|
(279.1)
|
(260.3)
|
General and
administration – other(5)
|
(19.2)
|
(11.9)
|
(12.3)
|
(42.7)
|
(35.2)
|
General and
administration – indirect
taxes (2)
|
(1.2)
|
(4.5)
|
(4.0)
|
(8.5)
|
(8.9)
|
Foreign currency
exchange gain/(loss)
|
0.3
|
0.2
|
0.7
|
0.3
|
2.6
|
Other
income/(expense)
|
(1.2)
|
0.6
|
0.5
|
(0.1)
|
2.6
|
EBITDA (excluding
gain/(loss) on undesignated hedges and
impairment charge)
|
33.9
|
70.7
|
79.4
|
169.0
|
290.0
|
Depreciation and
amortization
|
(36.4)
|
(41.7)
|
(46.6)
|
(118.5)
|
(145.7)
|
Net interest expense
and finance costs
|
(3.1)
|
(3.5)
|
(4.0)
|
(10.2)
|
(11.5)
|
Earnings / (loss)
before income tax (excluding gain/(loss)
on undesignated hedges and impairment charge)
|
(5.6)
|
25.5
|
28.8
|
40.3
|
133.0
|
Income tax (expense)
/ benefit on earnings
|
0.3
|
(3.4)
|
(8.4)
|
(7.7)
|
(26.2)
|
Earnings / (loss)
after income tax and before gain/(loss) on
undesignated hedges and impairment charge
|
(5.3)
|
22.1
|
20.4
|
32.8
|
106.8
|
Write off deferred
exploration expenditure / investment
(3)
|
-
|
-
|
-
|
(4.6)
|
(2.9)
|
Gain/(loss) on fair
value of undesignated hedges
|
(23.0)
|
(9.5)
|
1.4
|
(31.1)
|
7.4
|
Tax (expense) /
benefit on gain/loss on undesignated hedges
|
6.4
|
2.7
|
(0.1)
|
8.7
|
(0.3)
|
Share of loss from
equity accounted associates
|
-
|
-
|
-
|
-
|
(0.2)
|
Net Profit /
(loss)
|
(21.9)
|
15.3
|
21.7
|
5.8
|
110.8
|
Basic earnings /
(loss) per share
|
$(0.04)
|
$0.02
|
$0.04
|
$0.01
|
$0.18
|
Diluted earnings /
(loss) per share
|
$(0.04)
|
$0.02
|
$0.03
|
$0.01
|
$0.18
|
|
|
(1)
|
The Company's
consolidated financial results for YTD September 30, 2018 reflected
adjustments on 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, 2019 in accordance with the World Gold Council's updated
methodology.
|
(3)
|
Deferred
exploration related costs for the La Curva and Claudia projects
were written off due to termination of agreement with Mirasol
Resources Ltd
|
(4)
|
The Company's
consolidated financial results for YTD September 30, 2019 reflected
adjustments on IFRS 16 adoption from January 1,
2019.
|
(5)
|
The Company did
not record any revenue or cost of sales from the Didipio mine
during the third quarter of 2019. In addition third quarter 2019
General and Administration - other, includes $7.6 million
non-production costs related to maintaining Didipio operational
readiness.
|
Table 3 – Cash Flow Summary
Quarter ended 30 Sept
2019
(US$m)
|
Q3
30 Sept
2019
|
Q2
30 June
2019
|
Q3
30 Sept
2018
|
YTD
Sept 30
2019
|
YTD
Sept 30
2018
|
Cash flows from
Operating Activities
|
32.4
|
86.2
|
64.3
|
157.6
|
250.4
|
Cash flows used in
Investing Activities
|
(54.3)
|
(76.1)
|
(58.7)
|
(188.3)
|
(177.8)
|
Cash flows used in
Financing Activities
|
(4.0)
|
(10.1)
|
(63.3)
|
(16.7)
|
(76.0)
|
Operations
For the nine months ended September 30,
2019, the Company produced 362,450 ounces of gold and 10,187
tonnes of copper including 107,748 ounces of gold and 2,316 tonnes
of copper in the third quarter. Quarter-on-quarter gold production
decreased 17% due to the processing of mostly low-grade stockpiles
at Didipio.
Consolidated cash costs YTD were $725 per ounce on sales of 341,100 ounces of
gold, including third quarter cash costs of $828 per ounce on sales of 94,347 ounces of gold.
Quarter-on-quarter cash costs increased due to a higher weighted
average cost largely related to the lack of sales from Didipio.
Didipio's third quarter production remains in inventory and
available for sale once normal operations resume. All-In Sustaining
Costs ("AISC") in the nine months ended September 30, 2019, was $1,087 per ounce sold while third quarter AISC
was $1,122 per ounce sold, which was
similar to the previous quarter.
As previously announced, underground mining activities at
Didipio were temporarily suspended in mid-July due to the depletion
of consumable mining supplies as a result of restrictions on
material movements imposed by the provincial and local government
units. Processing of ore stockpiles continued during the third
quarter which included a 24-day mill shutdown in September to
complete maintenance activities. The Company did not transact any
gold or copper sales from Didipio in the third quarter. As
announced, subsequent to quarter end the Company temporarily
suspended ore processing at Didipio due to depletion of consumables
required for sustained operations.
At Haile, the operation delivered its third consecutive quarter
of operational improvements. For the nine months ended September 30, 2019, the Haile operation produced
99,711 ounces of gold including 36,812 ounces in the third quarter.
Quarter-on-quarter production was similar, but the current quarter
was impacted by delayed access to higher grade ore from Snake Phase
1 due to the confined nature of the mining area at the bottom of
the pit. Third quarter AISC decreased significantly to $1,106 per ounce, or 20% quarter-on-quarter due
improved mining and milling efficiencies and higher gold sales.
Production at Macraes was similar to the previous quarter as
expected with higher head grade partially offset by a decrease in
mill feed and slightly lower recoveries. Production at Waihi
decreased as expected consistent with the mine plan.
Financial
In the nine months ended September 30,
2019, the Company generated $499.1
million in revenue including $133.6
million in the third quarter. YTD revenue decreased over the
same period in 2018 due mainly to lower sales volumes from Didipio
in the third quarter and to a lesser extent, the expected reduction
in gold sales from New Zealand.
This was offset by an 18% increase in the third quarter average
gold price received to $1,414 per
ounce.
Quarter-on-quarter revenue decreased on lower gold and copper
sales with no sales from Didipio. YTD EBITDA was $169.0 million while third quarter EBITDA was
$33.9 million, both of which were
also negatively impacted by the absence of sales from Didipio.
Net loss before unrealised losses on undesignated hedges was
$5.3 million or $(0.01) per share on a fully diluted basis. This
result was impacted by the lower EBITDA, partially offset by lower
depreciation and amortisation charges.
Operating cash flows YTD were $157.6
million while third quarter operating cash flows were
$32.4 million, a 37% decrease from
the prior YTD and 62% from the previous quarter. The
quarter-on-quarter decrease is a result of no sales coming from
Didipio during the quarter. Cash flows used in investing activities
decreased on the previous quarter due to lower capitalised
pre-stripping at Haile and the temporary suspension of underground
mine development at Didipio.
Fully diluted cash flow per share before working capital was
$0.05, reflecting the
quarter-on-quarter decrease in EBITDA.
As at the end of September 2019,
the Company's cash balance stood at $55.6
million, excluding approximately $34.1 million held in strategic equity
investments. Total liquidity was $105.6
million while net debt was $140.3
million.
Growth
At Waihi, the Company progressed development of the Martha
Underground with completion of 871 metres of mine development in
the third quarter. The pilot hole was drilled for a raise bore
ventilation connection between the 800m and 920m
levels. The Company expects to complete a Waihi district study
in the first half of 2020 incorporating development of the Martha
and WKP deposits over the longer-term highlighting production
rates, high-level costs and production schedules.
At Haile, the Company continued to optimise the new regrinding
circuit and in the fourth quarter expects to complete construction
of the pre-aeration thickener to support grind size optimisation
through the new circuit. Post completion of the thickener
installation and further optimisation of the regrinding circuit the
Company is targeting steady-state recoveries in the mid-80% range
at higher throughput rates Engineering and other
pre-construction planning activities for the Horseshoe Underground
Mine continued during the quarter in anticipation of receiving the
permit early in 2020.
At Macraes, the Company is currently investigating opportunities
to increase mine life. To this end, the investment in exploration
with drilling activities across multiple targets within the Macraes
Goldfield and further mine planning is underway.
Work progressed on the scoping study for the Golden Point
geological resource, with an updated geological model being
constructed following the latest round of infill drilling. Other
work undertaken included a geotechnical assessment and options for
mining methods, including the potential for the use of backfill to
maximise overall resource recovery.
Conference Call
The Company will host a conference call / webcast to discuss the
results at 8:00 am on Friday November 1,
2019 (Melbourne, Australian
Eastern Daylight Time) / 5:00 pm on Thursday
October 31, 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/2098641/891E38C74A61C2343A9CC5E3A0B4EECE
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
A recording will be available for viewing on the Company's
website following the webcast.
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 460,000 to
480,000 ounces of gold and 10,000 to 11,000 tonnes of copper at
All-In Sustaining Costs ranging between $1,040 and $1,090
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.
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SOURCE OceanaGold Corporation