(All financial figures in US Dollars unless
otherwise stated)
/NOT FOR DISSEMINATION OR DISTRIBUTION IN
THE UNITED STATES AND NOT FOR
DISTRIBUTION TO US NEWSWIRE SERVICES./
BRISBANE, Australia, April
29, 2021 /CNW/ - OceanaGold Corporation (TSX: OGC) (ASX:
OGC) (the "Company") reported its financial and operational
results for the quarter ended March 31,
2021. 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
Highlights
- First quarter consolidated gold production of 83,191 ounces at
consolidated All-In Sustaining Costs ("AISC") of $1,229 per ounce on sales of 82,847 ounces of
gold.
- Total immediate available liquidity of $195.5 million, including $145.5 million of cash and $50 million in undrawn credit facilities.
- First quarter revenue of $148.9
million with adjusted Earnings before Interest, Depreciation
and amortisation ("EBITDA") of $66.5
million; adjusted net earnings of $21.8 million or $0.03 per share.
- Operating cash flow of $47.6
million in the first quarter with fully diluted cash flow
per share before working capital movements of $0.09 per share.
- Announced an increase to Gold Proven and Probable Reserves of
0.75Moz and Measured and Indicated Resources of 0.66Moz; first
reserves of 0.62Moz declared at Martha Underground.
- Advanced organic growth projects, including development of
2,311 metres at Waihi's Martha Underground and progressed the main
access and ventilation declines for Golden Point Underground at
Macraes.
- Full year 2021 guidance reaffirmed.
Michael Holmes, President and CEO
of OceanaGold said, "First quarter 2021 results demonstrate our
determination to deliver on our commitments. Despite one-off
milling challenges at Haile and Macraes, the ingenuity of our teams
ensured we delivered on first quarter expectations, and we remain
on-track to achieve full year 2021 guidance. At Haile, the
operation delivered record total mining movements during the first
quarter and quickly identified, evaluated, and resolved disruptions
to milling. At Macraes, despite failure of one of our mill motors
that slowed throughputs, the operation produced just under 35,000
gold ounces during the quarter, and full year guidance remains
unchanged."
"We continue to advance our organic growth pipeline of three new
underground mines over the next two years in favourable
jurisdictions. In New Zealand,
Martha Underground is on-track to begin continuous production late
in the second quarter and underpins the greater Waihi District. We
plan on drilling at Waihi for years to come and adding to the
already robust mine life. At Macraes, main access and ventilation
declines for the Golden Point Underground are underway, and the
project is on-track for first production by year-end. Haile
Underground preparation continues in anticipation for portal
development later this year."
"We remain in dialogue with appropriate representatives at
national and local levels on Didipio's FTAA renewal status.
Currently the renewal is with the Department of Environment and
Natural Resources for re-endorsement to the Office of the
President. In the meantime, we are maintaining Didipio in a state
of operational stand-by and planning for the transition to full
production. COVID-19 risks remain elevated in the Philippines and at site where nine members
of our workforce have tested positive for the virus over the last
year. Ongoing risks associated with the pandemic could impact the
timeline associated with returning to full operations."
"OceanaGold is a resilient and dynamic gold miner with a strong
and sustainable future. We are excited about the next few years and
the opportunity we have to drive value from internal growth. Our
relentless focus on delivering on our commitments, restarting
Didipio and advancing organic growth is expected to create value
for shareholders over the long-term."
Table 1 – Production and Cost Results Summary
Quarter ended 31 Mar
2021
|
Haile
|
Didipio
|
Waihi
|
Macraes
|
Consolidated
|
Q1 2021
|
Q1 2020
|
Gold
Produced
|
koz
|
44.3
|
-
|
4.3
|
34.5
|
83.2
|
80.7
|
Gold Sales
|
koz
|
45.3
|
-
|
3.1
|
34.5
|
82.8
|
91.4
|
Average Gold
Price
|
US$/oz
|
1,795
|
-
|
1,718
|
1,782
|
1,786
|
1,509
(1)
|
Copper
Produced
|
kt
|
-
|
-
|
-
|
-
|
-
|
-
|
Copper
Sales
|
kt
|
-
|
-
|
-
|
-
|
-
|
-
|
Average Copper
Price
|
US$/lb
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
Material
Mined
|
kt
|
10,639
|
-
|
50.4
|
11,933
|
22,622
|
21,185
|
Waste
Mined
|
kt
|
9,621
|
-
|
4.3
|
10,625
|
20,250
|
18,839
|
Ore Mined
|
kt
|
1,018
|
-
|
46.1
|
1,308
|
2,372
|
2,346
|
Mill Feed
|
kt
|
675
|
-
|
49
|
1,233
|
1,957
|
2,264
|
Mill Feed
Grade
|
g/t
|
2.46
|
-
|
3.12
|
1.03
|
1.57
|
1.37
|
Gold
Recovery
|
%
|
82.7
|
-
|
88.4
|
84.3
|
83.9
|
80.9
|
|
|
|
|
|
|
|
|
Cash Costs
|
US$/oz
|
773
|
-
|
972
|
818
|
800
|
802
|
Site
AISC(2)
|
US$/oz
|
994
|
-
|
702
|
1,335
|
1,229
|
1,218
|
(1)
|
Realised gains and
losses on gold hedging are included in the consolidated average
gold price. Realised gains and losses on gold hedging are not
included in the site average gold prices.
|
(2)
|
Site AISC are
exclusive of Corporate general and administrative expenses and have
been restated in prior periods accordingly; Consolidated AISC is
inclusive of Corporate general and administrative
expenses.
|
(3)
|
The lower AISC
(relative to Cash Costs) at Waihi reflects the inclusion of
proceeds from the sale of sustaining assets during the periods and
the relative low sales volume.
|
Table 2 – Financial Summary
Quarter ended 31 Mar
2021
(US$m)
|
Q1 31 Mar
2021
|
Q4 31 Dec
2020
|
Q1 31 Mar
2020
|
Revenue
|
148.9
|
168.2
|
138.2
|
Cost of sales,
excluding depreciation and amortization
|
(66.7)
|
(76.9)
|
(74.0)
|
General and
administration – indirect
taxes (2)
|
(0.1)
|
(0.3)
|
(1.2)
|
General and
administration – idle capacity charges
(1)
|
(4.5)
|
(9.1)
|
(7.2)
|
General and
administration – other
|
(12.6)
|
(13.1)
|
(12.2)
|
Foreign currency
exchange gain/(loss)
|
(3.4)
|
(8.6)
|
(1.3)
|
Other
income/(expense)
|
0.4
|
1.1
|
0.1
|
EBITDA (excluding
gain/(loss) on undesignated hedges and
impairment charge)
|
62.0
|
61.3
|
42.4
|
Depreciation and
amortization
|
(36.3)
|
(55.8)
|
(50)
|
Net interest expense
and finance costs
|
(2.7)
|
(2.5)
|
(2.8)
|
Earnings/(loss)
before income tax (excluding gain/(loss) on
undesignated hedges and impairment charge)
|
23.0
|
2.9
|
(10.5)
|
Income tax expense on
earnings
|
(5.7)
|
(10.2)
|
(0.2)
|
Earnings/(loss)
after income tax and before gain/(loss) on
undesignated hedges and impairment charge
|
17.3
|
(7.1)
|
(10.7)
|
Write off
exploration/property expenditure / investment
(3)
|
(1.3)
|
-
|
-
|
Gain/(loss) on fair
value of undesignated hedges
|
-
|
15.3
|
(21.2)
|
Tax (expense) /
benefit on gain/loss on undesignated hedges
|
-
|
(4.3)
|
5.9
|
Net
Profit/(loss)
|
16.0
|
3.9
|
(26.0)
|
Basic earnings/(loss)
per share
|
$0.02
|
$0.01
|
$(0.04)
|
Diluted
earnings/(loss) per share
|
$0.02
|
$0.01
|
$(0.04)
|
(1)
|
The Company did not
record any revenue or cost of sales from the Didipio mine during
the year ended 31 March 2021. In addition, General and
Administration – other – idle capacity charges reflects the
non-production costs related to maintaining Didipio's operational
readiness.
|
(2)
|
Represents
production-based taxes in the Philippines specifically excise tax,
local business and property taxes.
|
(3)
|
Represents write-off
of projects due to formal withdrawal from the Highland, Spring Peak
and Bravada joint venture activities.
|
Table 3 – Cash Flow Summary
Quarter ended 31 Mar
2021 (US$m)
|
Q1 31 Mar
2021
|
Q4 31 Dec
2020
|
Q1 31 Mar
2020
|
Cash flows from
Operating Activities
|
47.6
|
(1.6)
|
120.6
|
Cash flows used in
Investing Activities
|
(71.9)
|
(62.7)
|
(33.8)
|
.Cash flows from /
(used) in Financing Activities
|
(6.7)
|
117.2
|
44.8
|
Operations
For the quarter ended March 31,
2021, the Company produced 83,191 ounces of gold, reflecting
a 3% increase over the previous March quarter and 16% decrease
quarter-on-quarter. Increased production relative to the first
quarter of 2020 reflects stronger performance from Haile partly
offset by lower production from the New
Zealand operations. Decreased production quarter-on-quarter
is primarily attributable to New
Zealand where a milling disruption impacted Macraes, and
Waihi ran a reduced processing campaign as planned. Haile was also
lower with a higher average feed grade offset by lower mill
throughput. Didipio remained in a state of operational standby.
Increasing consolidated cash costs of $800 per ounce and All-in Sustaining Costs
("AISC") of $1,229 per ounce sold
reflected the lower production and higher capitalised pre-stripping
quarter-on-quarter, particularly at Macraes. The Company recorded
gold sales of 82,847 ounces in the first quarter, a 14% decrease
from the fourth quarter of 2020.
At Haile, the operation produced 44,341 gold ounces in the first
quarter, up 51% from the previous March quarter on improved mining
productivity. First quarter gold production and mill throughput
were 10% and 20% lower respectively quarter-on-quarter, due to
challenges with the flow of saturated saprolitic ore to the plant
(which were addressed and rectified during the quarter) and a
planned three-day plant shutdown. Concurrently, total mining
movements increased 24% and 7% over the prior March quarter and
fourth quarter 2020 respectively, and the operation achieved record
total movements in the quarter.
Unit mining and milling cost increases at Haile during the first
quarter reflect lower plant throughput, the impact of one-off costs
related to mitigating plant disruption from saturated ore, and to a
lesser extent, additional headcount to address COVID-19-related
workforce absenteeism. Confirmed COVID-19 cases at site increased
from 63 at the end of 2020 to 111 during the first quarter. The
Company continues to expect Haile to produce 150,000 to 170,0000
gold ounces at a site AISC of $950 to
$1,100 per ounce sold and notes that
the outlook could be adversely impacted by additional challenges
related to the COVID-19 pandemic.
In New Zealand, Waihi produced
4,337 gold ounces in the first quarter. Activities at Waihi
primarily focussed on the development of Martha Underground,
including the completion of 2,311metres of underground development
during the first quarter. In addition, the Company declared the
first Reserve of 620,000 gold ounces at Martha Underground ("MUG")
in conjunction with the completed feasibility-level study.
Development of MUG is on-track for continuous production to begin
in June following the replacement of Waihi's existing SAG mill.
Full year 2021 guidance at Waihi remains unchanged.
Macraes production decreased 19% quarter-on-quarter and 12% over
the prior March quarter primarily as a result of a one-off
disruption to milling operations from a mill motor outage in early
February. In addition, exceptionally high rainfall in January
required evacuation of Frasers Underground for two weeks and
temporarily prevented access to ore mining in open pits; as such,
mining efforts were directed to increased waste mining and
pre-stripping at Deepdell North open pit. Higher first quarter AISC
reflects the lower mill throughputs and increased sustaining
capital investments and pre-stripping activities. Full year
guidance for Macraes remains unchanged. The Company expects to
replace the mill motor in the second quarter concurrent to the
scheduled rebricking of the autoclave.
Didipio remains in a state of operational standby, and there was
no production in the first quarter due to the suspension of
operations due to the ongoing blockade of the access road. The
Company expensed $4.5 million of
holding costs as part of consolidated Corporate General and
Administration, which related to maintaining Didipio in a state of
operational standby. This compares to $9.1
million in the prior quarter. The Financial or Technical
Assistance Agreement ("FTAA") is currently pending re-endorsement
from the Philippine Department of Environment and Natural Resources
("DENR") to the Office of the President. The Company is unable to
provide a specific timeline to complete the renewal. The spread and
effective management of COVID-19 in the
Philippines may be a factor in the timeline for resumption
of normal operations, which could take up to 12 months. Since
March 2020, nine positive COVID-19
cases have been managed at Didipio, four of which occurred in the
first quarter of 2021.
Financial
In the three months ended March 31,
2021, the Company generated $148.9
million in revenue and adjusted EBITDA of $66.5 million, 11% and 6% lower than the previous
quarter, respectively, due to lower gold sales from New Zealand. First quarter revenue and
adjusted EBITDA increased 8% and 34% above the prior March quarter,
respectively, due to improved performance from Haile and an 18%
higher average gold price received during the period.
Adjusted net profit (excluding Didipio carrying costs) was
$21.8 million or $0.03 per share in the first quarter, benefitting
from the improvement in average gold price received over the prior
year quarter.
Operating cash flows in the first quarter were $47.6 million, an increase quarter-on-quarter due
to the stronger gold price and lower carrying costs for Didipio.
This was partly offset by working capital movements from an
increase in inventories at Haile. Fully diluted cash flow per share
before working capital movements was $0.09 per share.
Investing cash flows of $71.9
million in the first quarter increased quarter-on-quarter
with higher capital expenditure at Haile for expansion of waste
storage and pre-stripping activities at Macraes as well as ongoing
investment in development of the Martha Underground at Waihi.
As at March 31, 2021, the
Company's cash balance stood at $145.5
million and $50.0 million
remains undrawn on the credit facility.
Advance Notice Policy
The Company further announces that the Board of Director have
adopted an Advance Notice Policy ("Policy") for the Company. The
Policy establishes a framework for the nomination of Directors in
connection with a shareholder meeting and is keeping with best
practices in corporate governance consistent with other advance
notice policies adopted by Canadian companies.
The Policy is intended to:
(i) facilitate an orderly and
efficient annual general or special meeting process;
(ii) ensure that all shareholders
receive adequate notice of the director nominations and sufficient
information regarding all director nominees; and
(iii) allow shareholders to
register an informed vote after having been afforded reasonable
time for appropriate deliberation.
The Policy fixes a deadline by which shareholders of record of
common shares of the Company must submit director nominations to
the Company prior to any annual or special meeting of shareholders
and sets forth the information that a shareholder must include in
the notice to the Company for the notice to be in proper written
form.
In the case of an annual meeting of shareholders (including an
annual and special meeting), notice to the Company must be
given:
- not less than 30 days prior to the date of the annual meeting,
or
- if the meeting is to be held less than 50 days from the date of
first public announcement ("Notice Date"), then not later than 10
days following the Notice Date, or
- in the case of a special meeting (which is not also an annual
meeting), not later than the close of business 15 days following
the Notice Date.
The Policy is in full force and effect with immediate effect and
ensures all shareholders receive adequate notice and information
related to director nominations to make informed decisions.
The Company will seek shareholder ratification of the Policy by
ordinary resolution at its next annual general and special meeting
of shareholders (the "Meeting") scheduled to be held on
29 June 2021 at 5:00 p.m. (Eastern Daylight Time) / 30 June 2021 at 7:00
a.m. (Australian Eastern Standard Time). If the Policy is
not confirmed at the Meeting by ordinary resolution of
shareholders, the Policy will terminate and be of no further force
and effect following the termination of the Meeting.
The full text of the Policy is available under the Company's
profile at www.sedar.com and a summary of the Policy will be
included in the management information circular which will be sent
to shareholders in due course.
Conference Call
The Company will host a conference call / webcast to discuss the
financial and operating results at 7:30 am on Friday April 30, 2021 (Brisbane, Eastern Standard Time) / 5:30 pm on
Thursday April 29, 2021 (Toronto, Eastern Daylight Time).
Webcast Participants
To register, please copy and paste the link below into your
browser:
https://produceredition.webcasts.com/starthere.jsp?ei=1449908&tp_key=cdfe7d41a8
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
New Zealand: 0 800 453 421
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.
Authorised for release to market by OceanaGold Corporate Company
Secretary, Liang Tang.
www.oceanagold.com | Twitter: @OceanaGold
About OceanaGold
OceanaGold is a multinational gold producer committed to the
highest standards of technical, environmental and social
performance. For 30 years, we have been contributing to excellence
in our industry by delivering sustainable environmental and social
outcomes for our communities, and strong returns for our
shareholders.
Our global exploration, development, and operating experience
has created a significant pipeline of organic growth opportunities
and a portfolio of established operating assets including Didipio
Mine in the Philippines; Macraes
and Waihi operations in New
Zealand; and Haile Gold Mine
in the United States of
America.
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. 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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