/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)
BRISBANE, Australia,
Sept. 10, 2020 /CNW/ - OceanaGold
Corporation (TSX: OGC) (ASX: OGC) (the "Company") is today
pleased to announce an extension to the mine life at the Macraes
operation located on the South Island of New Zealand as well as to announce initial
Mineral Reserves and Mineral Resources for the Golden Point
Underground, including the results of the recently completed Golden
Point Underground Pre-feasibility Study. A new National Instrument
43-101 Technical Report ("Technical Report") for Macraes will be
filed on SEDAR and with the Australian Securities Exchange within
45 days.
Note that all Macraes Technical Report forecasts are based on
Mineral Reserves only.
Key Highlights
- Macraes life of mine ("LOM") extended to 2028.
- Before-tax net present value ("NPV") (5% discount rate) of
approximately US$430 million.
- After-tax NPV5% of approximately US$325 million.
- Frasers Underground extended to 2022; Golden Point Underground
first production expected in 2021.
- Initial Golden Point Proven & Probable Reserves of 160,000
gold ounces, Measured & Indicated Resources of 260,000 gold
ounces and Inferred Resources of 80,000 gold ounces.
- Macraes total Mineral Reserves increased by 240,000 gold
ounces, net of mine depletion (as at June
30, 2020).
Michael Holmes, President and CEO
of OceanaGold said, "Macraes continues to be the mine that keeps on
giving. After nearly 30 years of operation, we are very pleased to
announce that the Macraes life of mine will extend to at least 2028
with the inclusion of Golden Point Underground along with new open
pit opportunities such as those at Deepdell."
"We are also pleased to announce an increase to Mineral Reserves
at Macraes. The increase, net of mine depletion as of June 30, 2020, of 240,000 Proved and Probable
gold ounces includes our initial Reserve at Golden Point
Underground of 160,000 ounces. The initial Inferred Resource at
Golden Point Underground stands at 80,000 ounces. We continue to
drill extensively at Golden Point and other targets along the
35-kilometre long Hyde-Macraes shear zone and the results of this
drilling will be included in a subsequent update at year-end."
"The mine life of the Frasers Underground has now been extended
to 2022 and will be replaced by the Golden Point Underground, which
we expect to start producing in 2021. Frasers Underground commenced
production in 2008 with an initial mine life of six years.
Over the past twelve years, the Company has maintained a short
mine-life at Frasers Underground, drilling ahead of the mine face
and successfully replenishing Reserves year-on-year. Our
expectation is to operate the Golden Point Underground in a similar
manner while targeting year-on-year mine life extensions."
"The updated Macraes Technical Report demonstrating an after-tax
NPV of approximately $325 million
based on Reserves, together with the progress at Waihi, makes for
an economically robust New Zealand
business that we expect will generate significant free cash flows
while still retaining considerable exploration potential.
Exploration will remain a strategic focus for us as we continue to
invest in our organic growth opportunities in New Zealand."
"New Zealand is a top-tier
mining jurisdiction, in which we've successfully operated for
almost 30 years. We are very excited to advance our New Zealand opportunities and create
significant value for shareholders and socio-economic benefits for
local stakeholders on both the South and North Islands."
Updated Mineral Reserves and Resources
As at June 30, 2020, the Company
increased Macraes Proven and Probable Mineral Reserves by 240,000
ounces of gold, net of mine depletion inclusive of Golden Point's
initial Mineral Reserves of 160,000 ounces of gold.
Table 1 – Proven & Probable Mineral
Reserves (June 30, 2020)
JUNE
2020
|
|
Proven
|
Probable
|
Proven &
Probable
|
Cut-off
|
Mt
|
g/t
|
Moz
|
Mt
|
g/t
|
Moz
|
Mt
|
g/t
|
Moz
|
Coronation
North
|
0.4 g/t
|
0.98
|
1.39
|
0.04
|
1.23
|
0.92
|
0.04
|
2.21
|
1.13
|
0.08
|
Coronation
|
0.4 g/t
|
-
|
-
|
-
|
0.22
|
1.10
|
0.01
|
0.22
|
1.10
|
0.01
|
Deepdell
|
0.4 g/t
|
1.67
|
1.06
|
0.06
|
1.29
|
0.98
|
0.04
|
2.96
|
1.03
|
0.10
|
Round Hill
|
0.4 g/t
|
3.89
|
1.32
|
0.17
|
8.21
|
1.00
|
0.26
|
12.1
|
1.10
|
0.43
|
Innes Mills
|
0.4 g/t
|
1.73
|
1.26
|
0.07
|
5.81
|
0.84
|
0.16
|
7.51
|
0.94
|
0.23
|
Frasers OP
|
0.4 g/t
|
1.52
|
0.69
|
0.03
|
6.89
|
0.71
|
0.16
|
8.41
|
0.71
|
0.19
|
Stockpiles
|
0.4 g/t
|
4.36
|
0.55
|
0.08
|
-
|
-
|
-
|
4.36
|
0.55
|
0.08
|
Frasers UG
|
1.36 g/t
|
0.69
|
2.11
|
0.05
|
0.58
|
1.47
|
0.03
|
1.28
|
1.82
|
0.07
|
Golden Point
UG
|
1.61 g/t
|
0.12
|
2.39
|
0.01
|
2.26
|
2.12
|
0.15
|
2.34
|
2.13
|
0.16
|
Macraes
Total
|
|
15.0
|
1.05
|
0.51
|
26.5
|
0.99
|
0.84
|
41.4
|
1.01
|
1.35
|
|
Notes:
|
- Gold price assumptions for deriving
Reserves are USD1,300/oz for open pit and USD1,500/oz for
underground, at an exchange rate of 0.71 NZD:USD.
- All figures are rounded to reflect the
relative accuracy of the estimates. Totals may not sum
due to rounding.
- Mineral reserves are reported based
on cut-off grades that are based on metal price assumptions,
exchange rates and mining, processing, general and administrative
costs.
- JORC 2012 and CIM Definition Standards
were followed for Mineral Reserves.
|
Table 2 – Measured & Indicated Resources
(June 30, 2020)
JUNE
2020
|
Measured
|
Indicated
|
Measured &
Indicated
|
Mt
|
g/t
|
Moz
|
Mt
|
g/t
|
Moz
|
Mt
|
g/t
|
Moz
|
Open Pit
|
24.7
|
0.99
|
0.79
|
90.7
|
0.77
|
2.2
|
115
|
0.82
|
3.0
|
Underground
|
1.62
|
2.91
|
0.15
|
4.56
|
2.48
|
0.36
|
6.18
|
2.60
|
0.52
|
Macraes
Total
|
26.3
|
1.11
|
0.94
|
95.2
|
0.85
|
2.6
|
122
|
0.91
|
3.6
|
|
Notes:
|
- Open pit cut-offs range between 0.3 g/t
and 0.4 g/t Au. Frasers underground and Golden Point underground
reported at 1.2 g/t and 1.34 g/t Au respectively. All cut-offs
based upon a gold price of US$1,700/oz and an exchange rate of
0.71 NZD:USD.
- Open pit resources are reported within
shells optimized using a gold price of US$1,700/oz
- Mineral Resources reported include the
Mineral Reserves reported for the same
deposit.
- There is no certainty that Mineral
Resources that are not Mineral Reserves will be converted to
Mineral Reserves.
- No dilution is included in the reported
figures and no allowances have been made for
mining recoveries or processing losses.
- The tabulated resources are estimates of
metal contained as troy ounces of gold.
- JORC 2012 and CIM Definition Standards
were followed for Mineral Resources.
|
For Golden Point Underground, the Company has announced an
initial Measured and Indicated Resource of 260,000 ounces of gold
along with an initial Inferred Resource of 80,000 ounces. Note that
approximately half of the Golden Point underground resource was
previously included in the Round
Hill open pit resource which has now been excised from the
Round Hill open pit resource.
Table 3 – Inferred Mineral Resources
(June 30, 2020)
JUNE
2020
|
Inferred
Resources
|
Mt
|
g/t
|
Moz
|
Open Pit
|
40
|
0.69
|
0.9
|
Underground
|
1.3
|
2.4
|
0.1
|
Macraes
Total
|
42
|
0.74
|
1.0
|
|
Notes:
|
- Open pit cut-offs range between 0.3 g/t
and 0.4 g/t Au. Frasers underground and Golden Point underground
reported at 1.2 g/t and 1.34 g/t Au respectively. All cut-offs
based upon a gold price of US$1,700/oz and an exchange rate of
0.71 NZD:USD.
- Open pit resources are reported within
shells optimized using a gold price of US$1,700/oz
- There is no certainty that Mineral
Resources that are not Mineral Reserves will be converted to
Mineral Reserves.
- No dilution is included in the reported
figures and no allowances have been made for
mining recoveries or processing losses.
- The tabulated resources are estimates of
metal contained as troy ounces of gold.
- JORC 2012 and CIM Definition Standards
were followed for Mineral Resources.
|
The Company continues to focus on resource conversion and
expansion on multiple surface and underground targets within the
Macraes Goldfield. The Company will incorporate results of this
drilling in the year-end Resource and Reserve update.
Operating Physicals
The Macraes mine life has been extended from 2021 to 2028,
reflecting mine life increases to the Frasers Underground,
inclusion of the Golden Point Underground and additional surface
opportunities including new cut-backs at the Gay-Tan, Innes Mills and Deepdell open pits. Forecast
annual production is averaging approximately 150,000 ounces of gold
between 2021 and 2027.
Over the life of mine, the Company expects to produce
approximately 1.11 million ounces of gold at an AISC of
$1,025 per ounce from July 1, 2020. The average AISC from 2021 to 2028
is forecast at $990 per ounce. The
costs are based on historic operating costs and sustaining capital
expenditures. The mine schedule is based on and includes only
Reserves from July 1, 2020.
Table 4 – LOM Unit Operating Cost
Summary
Mining Unit
Costs
|
Units
|
USD
|
Open Pit
|
per tonne total
material mined
|
1.27
|
Frasers
Underground
|
per tonne ore
mined
|
43.63
|
Golden Point
Underground
|
per tonne ore
mined
|
37.04
|
Processing
|
per tonne
milled
|
7.16
|
Site General &
Administrative
|
per tonne
milled
|
1.96
|
Figure 1 – LOM Production & Cost
Profile
Capital Expenditure
The development of Golden Point Underground is expected to
commence late in 2020 with portal development within the Golden
Point open pit. First production from Golden Point Underground is
expected in 2021 with total estimated development capital of
approximately $15 million over the
next two years.
Life of mine sustaining capital including general operating,
pre-stripping and capitalised underground mining investment, is
expected to average approximately $35
million to $45 million a year,
which is similar to historical annual expenditures.
Figure 2 – Capital Expenditure Profile
Economics
Based on a 5% discount rate, an average gold price of
$1,540 per ounce, an exchange rate of
0.65 NZD:USD and on mineral Reserves
only, the before-tax NPV is approximately $430 million while the after-tax NPV is
approximately $325 million. The
undiscounted after-tax life of mine free cash flow is calculated at
approximately $420 million.
All drill data in relation to the information presented in this
release can be found on the Company's website at
https://oceanagold.com/investor-centre/tsx-asx-filings/. In line
with ASX listing requirements, OceanaGold has appended information
required by JORC Table 1 for the Macraes drill results, and
Resources and Reserves estimates to its ASX announcement. JORC
Table 1 is not required under National Instrument 43-101. Readers
are referred to the ASX website at www.asx.com.au or the
OceanaGold website at www.oceanagold.com to view JORC Table
1.
Authorised for release to market by OceanaGold Corporate Company
Secretary, Liang Tang.
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. 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. The Company's assets also
encompass the Didipio Gold-Copper Mine located on the island of
Luzon in the Philippines.
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.
Qualified Persons and Scientific and Technical
Information
The Mineral Resource estimate included in this press release has
been prepared under the supervision of S. Doyle. Any information
regarding metallurgy or mineral processing has been prepared,
verified and approved by D. Carr.
The open pit Mineral Reserves have been prepared under the
supervision of P. Doelman and the underground Mineral Reserves have
been verified and approved by T. Cooney. The cost estimation and
economic evaluation has been prepared under the supervision of P.
Doelman. Each of S. Doyle, D. Carr
and P. Doelman are Qualified Persons under NI 43-101. All other
scientific or technical information has been prepared, reviewed and
approved by P. Doelman.
Messrs Doelman and Doyle are full-time employees of the
Company's subsidiary, OceanaGold (New
Zealand) Limited while Messrs Carr and Cooney full-time
employee of the Company's subsidiary, OceanaGold Management Pty
Limited. Accordingly, each is not independent for purposes of NI
43-101.
Messrs Carr, Cooney, Doelman and Doyle are each Members and
Chartered Professionals with the Australasian Institute of Mining
and Metallurgy.
Messrs Carr, Cooney, Doelman and Doyle have reviewed and
approved the scientific and technical information in this press
release in respect of which each is responsible and each consents
to inclusion in this public release of the matters based on their
information in the form and context in which it appears.
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, achievement of
guidance, 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
outbreak of an infectious disease, 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.
This press release also contains references to estimates of
Mineral Resources and Mineral Reserves. The estimation of Mineral
Resources and Mineral Reserves is inherently uncertain and involves
subjective judgments about many relevant factors. Mineral Resources
that are not Mineral Reserves do not have demonstrated economic
viability. The accuracy of any such estimates is a function of the
quantity and quality of available data, and of the assumptions made
and judgments used in engineering and geological interpretation
which may prove to be unreliable and depend, to a certain extent,
upon the analysis of drilling results and statistical inferences
that may ultimately prove to be inaccurate. Mineral Resource or
Mineral Reserve estimates may have to be re-estimated based on: (i)
fluctuations in gold price; (ii) results of drilling, (iii) the
results of metallurgical testing and other studies, including their
subsequent refinement and updating; (iv) proposed mining
operations, including dilution; (v) the evaluation of mine plans
subsequent to the date of any estimates; (vi) changes in mining or
other costs, and (vii) the possible failure to receive required
permits, approvals and licenses or changes to existing mining
licences.
As well, all of the economic results of studies included in this
press release constitute forward-looking information or statements,
including NPV of approximately $325
million; updated LOM extended to 2028; AISC of approximately
$1,025 per ounce; and undiscounted
LOM after tax free cash flow of $422
million.
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.
www.oceanagold.com | Twitter: @OceanaGold
SOURCE OceanaGold Corporation