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BRISBANE, Australia,
July 14, 2021 /CNW/ - OceanaGold
Corporation (TSX: OGC) (ASX: OGC) (the "Company") today
advises that the Philippine Government has renewed the Didipio Mine
Financial or Technical Assistance Agreement ("FTAA") for an
additional 25-year period, beginning June
19, 2019. The renewed FTAA reflects similar financial terms
and conditions while providing additional benefits to the regional
communities and provinces that host the operation.
Michael Holmes, President and CEO
of OceanaGold said, "we are pleased to confirm the renewal of the
Didipio Mine's FTAA and thank the Philippine Government for their
endorsement and renewal. We have worked through the renewal process
in partnership with the Government and regulatory agencies. We look
forward to commencing restart activities and continuing to work in
partnership with our regulators, communities, employees, and all
stakeholders to contribute to the
Philippines' post-COVID-19 economic recovery."
The Company has maintained the mine and associated facilities in
a state of operational stand-by. The Company's first operational
priority is the rehiring and training of its Philippine workforce,
which will include a focus on safeguarding workers from the current
risks associated with COVID-19. The Company expects to provide
additional details on the restart and resumption of normal
operations at Didipio, including the timeline and an update to
Company's 2021 guidance, in due course.
The Company plans a staged restart of operations with milling to
recommence as soon as possible utilising stockpiled ore of which
the operation has approximately 19 million tonnes available. The
Company aims to achieve full underground production capacity within
twelve months. Once fully ramped-up, the Company expects Didipio to
produce approximately 10,000 gold ounces and 1,000 tonnes of copper
per month at first quartile All-in Sustaining Costs.
Didipio is a major direct and indirect employer in the provinces
of Quirino and Nueva Vizcaya and a
significant contributor of socio-economic benefits for the local
and national economies. The Didipio Gold and Copper Mine operates
to the highest environmental and social standards and has been
recognised as one of the most responsible in the country.
Renewal Terms
The FTAA was renewed on substantially the same terms and
conditions and includes the following modifications:
- The equivalent of an additional 1.5% of gross revenue to be
allocated to community development1
- Reclassification of Net Smelter Return to be an allowable
deduction and shared 60% / 40% rather than wholly included in
government share
- Listing of at least 10% of the common shares in OceanaGold
Philippines Inc. ("OGPI"), the Company's Philippine operating
subsidiary and holder of the FTAA, on the Philippine Stock Exchange
within the next three years2
- OGPI shall offer for purchase by the Philippine Central Bank
not less than 25% of its annual gold doré production at fair market
price and mutually agreed upon terms
- Transfer of OGPI's principal office to a host province within
the next two years.3
The additional 1.5% allocated to community development will take
the form of increased contributions to communities in the region
and provincial development projects. While the existing fund for
Social Development and Management Program will continue to be
provided for the host and neighbouring communities, 1.0% of the
additional 1.5% will be allocated to community development for
additional communities and 0.5% to the host Provinces of
Nueva Vizcaya and Quirino.
________________________
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1.
|
Includes 1.0% in
additional gross mining revenue allocated for community development
for additional communities in the region and 0.5% to the Provinces
of Nueva Vizcaya and Quirino where the mine resides. Additional
contribution to be considered an allowable deduction under the
fiscal terms of the FTAA.
|
2.
|
Three years from
execution of the renewal agreement. Subject to compliance with
applicable laws, and the rules and regulations of the Philippine
Stock Exchange and Securities and Exchange Commission.
|
3.
|
Two years from
execution of the renewal agreement.
|
General Corporate Update
Haile, United States
The Haile operation has delivered a strong second quarter of
production as planned. The Company continues to expect production
in the second half to be softer from mine sequencing whereby the
operation will be mining and processing lower grade ore. The
Company remains on track to achieve Haile's 2021 guidance of
150,000 – 170,000 gold ounces.
Whilst 2021 guidance anticipated residual productivity risks
associated with weather and COVID, and mining unit rates have
trended down during the second quarter, operating costs as well as
AISC remain above expectation. Mining efficiencies continue to be
adversely impacted by additional costs associated with material
re-handling and excess water management, while processing has been
impacted by higher reagent usage and maintenance costs to remediate
plant blockages. Additional capital was included per 2021 guidance
related to the storage of higher than anticipated volumes of
Potentially Acid Generating ("PAG") material and work continues to
develop options to optimise PAG identification and containment to
ensure compliance with operating permits while minimising capital
and waste management costs.
Management recognise if these trends were to continue it could
have a negative impact on the total ounces contained within the
open pit(s) and the project life of mine cash flows. While the
Company believes in the quality of the Haile operation, the
performance of Haile to date has not yet met expectations. As such,
a site wide review is underway under the oversight of a newly
formed Board Technical Committee. The addition of Mick McMullen and Paul
Benson to the Board brings extensive industry specific
technical and commercial skills to the Company and they will form
part of the Board Technical Committee.
The Board Technical Committee is working with Management to
assess Haile's performance constraints and to put in place
remediation plans to ensure the operation achieves its full
potential. The current workstreams include: a review of mining and
processing activities to deliver productivity improvements and
operating cost reductions, water and waste management
opportunities, capital efficiency options, and mining trade-off
studies (i.e. potential to convert some planned future open pit
cutbacks to underground mining at higher cut-off grades). It will
also include the provision of external expert technical support
aimed at identifying additional mining and processing efficiencies.
The technical studies are expected to be complete in early
2022.
The Haile Supplemental Environmental Impact Statement ("SEIS")
process continues and the Company now expects the Record of
Decision and related permits within the fourth quarter of 2021.
These permits relate to the expansion of the operating footprint to
accommodate waste stockpiles, increased capacity through the water
treatment plant, as well as development of the Haile Underground.
Engagement with the US Army Corps of Engineers and South Carolina
Department of Health and Environment Control remains positive and
ongoing. The Company is responding to inquiries received post
release of the Draft Record of Decision. The delay in finalisation
of the SEIS process and associated permits into late 2021 is
anticipated to have a modest negative impact on capital and
operating costs over the next two years due to the management and
storage of additional PAG and costs associated with additional
in-pit re-handling. Options analysis is underway to mitigate these
short-term operational impacts, as well as potential delays to the
commencement of the Haile Underground project. The Company will
continue to update the market on progress as appropriate.
Meanwhile, initial surface works for the Haile Underground project
are continuing with portal development planned to commence upon
completion of the permitting process.
The Company also wishes to announce that David Londono will commence as Executive General
Manager on July 15, with Jim Whittaker having accepted a new role and
departing the Company effective July
31. Mr Londono has over 35 years of experience in the mining
industry with his most recent roles being General Manager of the
Detour Lake Gold Mine, and later Vice President of Projects for
Kirkland Lake Gold post the Detour
acquisition. He has worked with Barrick, AngloGold Ashanti and
Glencore, and holds Master's degrees in Engineering from the
Colorado School of Mines and Business
Administration from Regis University in
Denver. During his career, David
has spent significant time and work in mine management and
optimization positions, and the Company looks forward to David
becoming part of the team and leading the performance improvement
initiatives at Haile.
Waihi Gold Mine, New
Zealand
Continuous milling at Waihi commenced late in the second quarter
as planned. Martha Underground ("MUG") continues to advance with
development rates continuing to improve with May achieving the
highest monthly development rates to date. Waihi is on track to
deliver its full year production guidance of 35,000 to 45,000 gold
ounces as it transitions into its first full year production from
MUG in 2022.
At Wharekirauponga ("WKP"), the Company is currently drilling
three major vein systems: Western, T-Stream and East Graben with
promising results to date. A drought period in the region earlier
in the year has slowed drilling relative to the Company's
expectations, and as a result, the Company currently expects to
release the pre-feasibility study in early 2022.
Macraes Gold Mine, New
Zealand
The Company successfully completed the planned autoclave rebrick
and mill repairs in the second quarter, and the plant is performing
at capacity. Macraes is expected to be able to deliver on its full
year production guidance of 155,000 to 165,000 gold ounces. Golden
Point Underground continues to advance toward first gold production
expected in the fourth quarter of 2021.
Second Quarter Results and Webcast
The Company will release its financial and operational results
for the second quarter ending June 30,
2021 after the TSX market close on Thursday July 29, 2021 (Toronto, Eastern Daylight Time). The results
will be available on the Company's website at
www.oceanagold.com.
The Company will also host a conference call / webcast to
discuss the results at 7:30 am on Friday
July 30, 2021 (Melbourne,
Australian Eastern Standard Time) / 5:30 pm on Thursday July 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=1479464&tp_key=b7a29eb104
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.
Authorised for release to market by 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 an industry-leading 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.
SOURCE OceanaGold Corporation