/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, July
29, 2021 /CNW/ - OceanaGold Corporation (TSX: OGC) (ASX:
OGC) (the "Company") reported its financial and operational
results for the quarter ended June 30,
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
- Didipio's Financial or Technical Assistance Agreement ("FTAA")
renewed, restart of operations to commence in the near-term.
- Total Recordable Injury Frequency Rate ("TRIFR") of 3.7 per
million hours worked compared to 3.9 per million hours worked at
the end of the first quarter.
- First half of 2021 consolidated gold production of 177,039
ounces at All-In Sustaining Costs ("AISC") of $1,227 per ounce on gold sales of 178,781
ounces.
- Consolidated second quarter gold production of 93,848 ounces at
AISC of $1,226 per ounce on gold
sales of 95,934 ounces.
- First half revenue of $331.5
million with adjusted Earnings before Interest, Depreciation
and Amortisation ("EBITDA") of $161.9
million.
- Second quarter revenue of $182.6
million with adjusted EBITDA of $95.4
million and adjusted net profit of $36.9 million or $0.05 per share fully diluted.
- Total immediate available liquidity of $142.3 million, including $92.3 million of cash and $50 million in available undrawn credit
facilities as at 30 June 2021.
- Advanced organic growth projects, including the completion of
5,210 metres of underground development year-to-date ("YTD") at
Martha Underground ("MUG") and successful replacement of the SAG
mill with the recommencement of processing late June.
- Paul Benson appointed Chairman
of the Board, effective October 1,
2021.
- Revised full year 2021 guidance (excluding Didipio) to 350,000
to 370,000 gold ounces at AISC of $1,200 to $1,250
per ounce; update to be provided in the near-term to include
Didipio.
Michael Holmes, President and CEO
of OceanaGold said, "I am very pleased with the operational and
financial performance of the business in the second quarter 2021.
Haile delivered a record quarter of gold production and is well
on-track to deliver on the full year production guidance. Waihi
plant upgrades were completed, and we commenced continuous milling
late in the second quarter which is a tremendous outcome as we
continue to ramp-up underground operations."
"Based on year-to-date performance we have refined our
expectations for the full year. We currently expect consolidated
production of 350,000 to 370,000 gold ounces at AISC of
$1,200 to $1,250 per gold ounce sold at cash costs of
$825 to $875 per ounce sold. Strong first half
performance at Haile has put us firmly on track to deliver ahead of
160,000 gold ounces for the full year at moderately higher AISC,
largely driven by an increased proportion of mining costs
capitalised as pre-strip plus higher than expected mining costs
incurred. On the other hand, a softer first half at Macraes is
driving production to the lower end of guidance of 155,000 to
165,000 gold ounces for the full year at consequently higher AISC.
Waihi is firmly on-track and production guidance remains unchanged
but at improved costs. We expect to provide updated consolidated
guidance in-line with the staged restart of Didipio over the coming
weeks."
"Renewal of the FTAA at Didipio was one of our key priorities
this year, and I'm extremely proud to say we delivered. The staged
restart of the asset is underway with the current focus on the
rehire and training of our skilled Philippine workforce. We expect
to restart processing well prior to year-end, initially sourcing
mill feed from existing stockpiles at site. Our expectation is to
also transport and sell approximately 18,500 gold ounces and 3,500
tonnes of copper in concentrate on site by early fourth quarter.
The rehire and retraining of the workforce, as well as the ongoing
risks associated with the COVID-19 pandemic, could impact the
timeline associated with returning to full underground production
of 1.6Mtpa, which could take up to 12 months."
Table 1 – Production and Cost Results Summary
Quarter ended 30
Jun 2021
|
|
Haile
|
Didipio
|
Waihi
|
Macraes
|
Consolidated
|
Q2
2021
|
Q2
2020
|
Gold
Produced
|
koz
|
57.2
|
-
|
3.9
|
32.7
|
93.8
|
58.7
|
Gold Sales
|
koz
|
59.3
|
-
|
3.4
|
33.2
|
95.9
|
61.9
|
Average Gold
Price
|
US$/oz
|
1,825
|
-
|
1,799
|
2,024
|
1,893
|
1,523
(1)
|
Copper
Produced
|
kt
|
-
|
-
|
-
|
-
|
-
|
-
|
Copper
Sales
|
kt
|
-
|
-
|
-
|
-
|
-
|
-
|
Average Copper
Price
|
US$/lb
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
Material
Mined
|
kt
|
11,047
|
-
|
75
|
12,882
|
24,004
|
20,654
|
Waste
Mined
|
kt
|
10,266
|
-
|
12
|
11,625
|
21,904
|
18,635
|
Ore Mined
|
kt
|
781
|
-
|
62
|
1,257
|
2,101
|
2,019
|
Mill Feed
|
kt
|
836
|
-
|
43
|
1,124
|
2,003
|
2,181
|
Mill Feed
Grade
|
g/t
|
2.49
|
-
|
3.13
|
1.09
|
1.72
|
1.07
|
Gold
Recovery
|
%
|
85.5
|
-
|
90.7
|
82.7
|
84.1
|
78.3
|
|
|
|
|
|
|
|
|
Cash Costs
|
US$/oz
|
615
|
-
|
1,215
|
897
|
734
|
946
|
Site All-In
Sustaining Costs(2)
|
US$/oz
|
922
|
-
|
1,223
|
1,524
|
1,226
|
1,265
|
Year to date 30
Jun 2021
|
Haile
|
Didipio
|
Waihi
|
Macraes
|
Consolidated
|
YTD
2021
|
YTD
2020
|
Gold
Produced
|
koz
|
101.6
|
-
|
8.3
|
67.2
|
177.0
|
139.4
|
Gold Sales
|
koz
|
104.5
|
-
|
6.5
|
67.7
|
178.8
|
153.3
|
Average Gold
Price
|
US$/oz
|
1,812
|
-
|
1,761
|
1,901
|
1,843
|
1,515
(1)
|
Copper
Produced
|
kt
|
-
|
-
|
-
|
-
|
-
|
-
|
Copper
Sales
|
kt
|
-
|
-
|
-
|
-
|
-
|
-
|
Average Copper
Price
|
US$/lb
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
Material
Mined
|
kt
|
21,686
|
-
|
125
|
24,815
|
46,626
|
41,842
|
Waste
Mined
|
kt
|
19,887
|
-
|
17
|
21,829
|
41,733
|
37,475
|
Ore Mined
|
kt
|
1,799
|
-
|
108
|
2,986
|
4,893
|
4,366
|
Mill Feed
|
kt
|
1,512
|
-
|
92
|
2,357
|
3,961
|
4,446
|
Mill Feed
Grade
|
g/t
|
2.48
|
-
|
3.12
|
1.06
|
1.65
|
1.22
|
Gold
Recovery
|
%
|
84.3
|
-
|
89.5
|
83.6
|
84.0
|
79.2
|
|
|
|
|
|
|
|
|
Cash Costs
|
US$/oz
|
684
|
-
|
1,099
|
857
|
764
|
860
|
Site All-In
Sustaining Costs(2)
|
US$/oz
|
953
|
-
|
976
|
1,428
|
1,227
|
1,237
|
|
|
(1)
|
Realised gains and
losses on gold hedging are included in the consolidated average
gold price. Realised gains and losses on gold hedging are not
included in the site average gold prices.
|
(2)
|
Site AISC are
exclusive of Corporate general and administrative expenses and have
been restated in prior periods accordingly; Consolidated AISC is
inclusive of Corporate general and administrative
expenses.
|
Table 2 – Financial Summary
Quarter ended 30
Jun 2021 (US$m)
|
Q2
30 Jun
2021
|
Q1
31 Mar
2021
|
Q2
30 Jun
2020
|
YTD
30 Jun
2021
|
YTD
30 Jun
2020
|
Revenue
|
182.6
|
148.9
|
95.8
|
331.5
|
234.0
|
Cost of sales,
excluding depreciation and amortization
|
(71.3)
|
(66.7)
|
(61.8)
|
(138.0)
|
(135.8)
|
General and
administration – indirect taxes (2)
|
-
|
(0.1)
|
(0.9)
|
(0.1)
|
(2.1)
|
General and
administration – idle capacity charges (1)
|
(5.5)
|
(4.5)
|
(7.9)
|
(10.0)
|
(15.1)
|
General and
administration – other
|
(12.7)
|
(12.6)
|
(12.6)
|
(25.3)
|
(24.9)
|
Foreign currency
exchange gain/(loss)
|
(1.0)
|
(3.4)
|
(4.3)
|
(4.4)
|
(5.5)
|
Other
income/(expense)
|
(2.2)
|
0.4
|
4.1
|
(1.8)
|
4.2
|
EBITDA (excluding
gain/(loss) on undesignated hedges and impairment
charge)
|
89.9
|
62.0
|
12.4
|
151.9
|
54.8
|
Depreciation and
amortization
|
(40.0)
|
(36.3)
|
(39.4)
|
(76.3)
|
(89.5)
|
Net interest expense
and finance costs
|
(2.6)
|
(2.7)
|
(3.1)
|
(5.3)
|
(5.9)
|
Earnings/(loss)
before income tax (excluding gain/(loss) on undesignated hedges and
impairment charge)
|
47.3
|
23.0
|
(30.1)
|
70.3
|
(40.6)
|
Income tax expense on
earnings
|
(15.8)
|
(5.7)
|
(1.5)
|
(21.5)
|
(1.7)
|
Earnings/(loss)
after income tax and before gain/(loss) on undesignated hedges and
impairment charge
|
31.4
|
17.3
|
(31.5)
|
48.7
|
(42.3)
|
Write off
exploration/property expenditure / investment
(3)
|
-
|
(1.3)
|
(6.8)
|
(1.3)
|
(6.8)
|
Gain/(loss) on fair
value of undesignated hedges
|
-
|
-
|
9.6
|
-
|
(11.6)
|
Tax (expense) /
benefit on gain/loss on undesignated hedges
|
-
|
-
|
(2.7)
|
-
|
3.3
|
Net
Profit/(loss)
|
31.4
|
16.0
|
(31.4)
|
47.4
|
(57.4)
|
Basic earnings/(loss)
per share
|
$0.04
|
$0.02
|
$(0.05)
|
$0.07
|
$(0.09)
|
Diluted
earnings/(loss) per share
|
$0.04
|
$0.02
|
$(0.05)
|
$0.07
|
$(0.09)
|
|
|
(1)
|
The Company did not
record any revenue or cost of sales from the Didipio mine during
the fifteen months ended 30 June 2021. In addition, General and
Administration – idle capacity charges reflect the non-production
costs related to maintaining Didipio while not
operational.
|
(2)
|
Represents
production-based taxes in the Philippines specifically excise tax,
local business and property taxes.
|
(3)
|
Represents write-off
of projects due to formal withdrawal from the Highland, Spring Peak
and Bravada joint venture activities.
|
Table 3 – Cash Flow Summary
Quarter ended 30 Jun 2021 (US$m)
|
Q2
30 Jun
2021
|
Q1
31 Mar
2021
|
Q2
30 Jun
2020
|
YTD
30 Jun
2021
|
YTD
30 Jun
2020
|
Cash flows from
Operating Activities
|
35.8
|
47.6
|
16.7
|
83.4
|
137.3
|
Cash flows used in
Investing Activities
|
(80.9)
|
(71.9)
|
(50.9)
|
(152.8)
|
(84.7)
|
Cash flows from /
(used) in Financing Activities
|
(5.4)
|
(6.7)
|
3.5
|
(12.1)
|
48.3
|
Operations
In the first half of the year, the Company produced 177,039
ounces of gold, a 27% increase over the same period in 2020 due to
record production at Haile in the second quarter, resumption of
campaign processing at Waihi, and limited impacts from COVID-19.
Second quarter gold production of 93,848 ounces of gold reflects
record production at Haile of 57,240 ounces.
Consolidated AISC of $1,227 per
ounce sold YTD and $1,226 per ounce
sold in the second quarter were relatively flat over the prior year
and previous quarter. Cash costs for the first half of the year of
$734 per gold ounce and $764 per ounce in the second quarter, decreased
22% and 11%, respectively. The improvement in cash costs primarily
reflects lower operating costs at Haile from productivity
improvements made year-over-year.
Haile, USA
Haile delivered a record second quarter of 57,240 gold ounces
resulting in 101,581 gold ounces produced in the first half of the
year. AISC and cash costs improved significantly, benefitting from
higher gold sales and lower overall cash costs from productivity
improvements. AISC and cash costs for the second quarter were
$922 and $615 per ounce, a decrease of 7% and 22%,
respectively, quarter-on-quarter. YTD AISC and cash costs were
$953 per ounce and $684 per ounce, respectively, down approximately
36% over the prior year period.
Unit mining and milling cost decreased quarter-on-quarter, and
increased 9% and 36%, respectively, YTD over the prior year period.
Second quarter decreases reflect lower maintenance activities on
the mining fleet and higher mill feed following milling disruptions
from the first quarter; YTD increases are attributable to higher
maintenance costs and an unplanned mill disruption from blocked
crusher chutes in the first quarter that have since been resolved.
The decrease in site G&A quarter-on-quarter reflects the
increase mill feed and lower costs during the period.
Confirmed COVID-19 cases at site increased from 111 at the end
of the first quarter to 120 by the end of the second quarter, a
decrease in positive cases from 48 in the first quarter to nine in
the second quarter. Looking ahead, the Company expects to
transition to ore mining of lower grades at Ledbetter Phase 1 and
commence stripping of Ledbetter Phase 2, resulting in materially
lower production and higher AISC in the second half of this year.
The Company has refined its full year production guidance for Haile
to 160,000 to 170,000 gold ounces at site AISC of $1,100 to $1,150
per ounce sold, including cash costs of $850 to $900 per
ounce sold. The higher AISC and cash costs reflect higher mining
costs incurred plus incremental sustaining capital expenditures
related to open pit pre-stripping.
Waihi, New Zealand
Waihi produced 3,939 gold ounces in the second quarter and 8,276
gold ounces YTD. Second quarter activities at Waihi primarily
focussed on the development of Martha Underground and replacement
of the semi-autogenous grinding ("SAG") mill. Approximately 2,665
metres of underground development were completed during the second
quarter and 5,210 metres YTD. Sustained milling recommenced in late
June following the successful replacement of Waihi's SAG mill.
AISC and cash costs for the second quarter were $1,223 and $1,215
per ounce sold, respectively, and increased quarter-on-quarter with
higher operating costs associated with limited early production,
partly offset by moderately higher gold sales. YTD AISC and cash
costs were $1,099 per ounce and
$976 per ounce, respectively,
increases over the prior year period with the ramp-up of production
at Martha Underground as expected.
Unit mining costs were relatively unchanged quarter-on-quarter
with mining of narrow vein ore at Correnso and early production
from Martha Underground in both quarters. YTD mining costs reflect
early production from Martha Underground relative to the prior
year. Processing cost and site G&A increases in the second
quarter reflect the planned shutdown for replacement of the SAG
mill and resultant lower mill feed. Lower site G&A YTD over the
prior year reflects normal operations relative to 2020 which
included impacts from COVID-19-related shutdowns.
Full year 2021 production guidance at Waihi remains unchanged
while cost guidance has improved. The Company expects to produce
35,000 to 45,000 ounces at lower gold cash cost of $900 to $950 per
ounce and site AISC of $1,300 to
$1,350 per ounce sold. The Company
anticipates ramp-up of production over the course of the second
half with the highest quarter of production for the year expected
in the fourth quarter.
Macraes, New Zealand
Macraes produced 32,669 gold ounces in the second quarter and
67,182 gold ounces in the first half of 2021. Lower than expected
production in the second quarter reflects geotechnical impacts at
the Coronation North open pit that slowed mining rates reducing
access to higher grade ore zones, as well as a delayed re-start
from the planned shut during the quarter to address out-of-scope
maintenance requirements.
Second quarter AISC and cash costs were $1,524 and $897 per
ounces sold, respectively. YTD AISC and cash costs were
$1,428 and $857 per ounce sold, respectively. Cash costs
increased approximately 10% quarter-on-quarter and YTD over the
prior year period, reflecting the lower ounces, a net drawdown in
inventory and additional contractor costs to fill workforce
vacancies. Similar increases in AISC also reflect the higher
sustaining capital spend related to increased pre-stripping at
Deepdell North and waste movements in the quarter and first
half.
Unit mining costs were 6% and 28% higher quarter-on-quarter and
YTD over the prior year period, respectively, as a result of
reduced trucking productivity from inclement weather which
saturated haul roads, flooded active open pit mining areas, and
rendered the underground inaccessible for a two-week period in the
first quarter. Mining efforts were subsequently re-directed to
increased waste mining and pre-stripping at Deepdell North open pit
through the first half. Processing unit costs also increased over
comparable periods, reflecting the one-off mill motor outage in the
first quarter and extended mill shutdown during the second
quarter.
Due to the lower-than-expected production in the first half, the
Company expects Macraes full year production to be in the lower end
of the guidance range of 155,000 to 165,000 gold ounces at cash
costs of $800 to $850 per ounce and increased site AISC to
$1,200 to $1,250 per ounce sold over the full year,
primarily driven by increased sustaining capital spend related to
pre-stripping at Deepdell North and additional underground
development. Production is still expected to increase in the third
quarter and be higher overall in the fourth quarter of 2021.
Didipio Philippines
There was no production from Didipio in the second quarter and
first half due to the suspension of operations. The Company
expensed $5.5 million in the second
quarter and $10.0 million YTD of
holding costs as part of consolidated Corporate General and
Administration, which relates to maintaining Didipio in a state of
operational standby.
Subsequent to second quarter end, the Government of the Philippines renewed the Didipio FTAA for a
further 25 years. The Company's primary focus is the safe and
responsible start-up of operations, which includes recruitment and
training of the workforce and the transport of approximately 15,000
tonnes of copper-gold concentrate produced prior to the shutdown of
operations.
The Company expects to progressively ramp-up to full underground
mining rates of 1.6 Mtpa within the next twelve months, depending
on workforce rehiring and recruitment efforts. Ore from the
underground will incrementally and steadily offset mill feed from
stockpiled ore of which there is currently 19 million tonnes.
Since March 2020, 72 positive
COVID-19 cases have been managed at Didipio, 63 of which occurred
in the second quarter of 2021. The Company experienced a
significant increase in COVID-19-positive cases early in the second
quarter, consistent with the spread of COVID-19 in the local and
surrounding communities. The site continues to follow strict health
and safety protocols to prevent the ongoing transmission of the
virus at site.
Financial
In the first half of the year, the Company generated
$331.5 million in revenue, a 42%
increase from the prior year period due to record production at
Haile, improved average gold price and early production at Waihi
with the development of Martha Underground. Quarter-on-quarter
revenue increased 23% with record production from Haile, partly
offset by lower sales from Macraes where production was impacted by
geotechnical issues that rendered higher grade ore zones of the
open pit inaccessible.
First half adjusted EBITDA (excluding Didipio carrying costs) of
$161.9 million nearly tripled
year-on-year, reflecting improved revenues on higher gold prices
and record production at Haile at improved cash costs, as compared
to the first half of 2020 which included impacts related to
COVID-19 shutdowns. Quarter-on-quarter adjusted EBITDA of
$95.4 million increased 43%,
benefitting from record production at Haile at improved operating
costs, partly offset by lower sales from Macraes.
Adjusted net profit was $36.9
million or $0.05 per share on
a fully diluted basis in the second quarter and $58.7 million or $0.08 per share on a fully diluted basis YTD. The
quarter-on-quarter and year-over-year increases were mainly a
function of the higher revenue from increased sales volumes. The
increases were partly offset by income tax expense of $15.8 million in the second quarter and
$21.5 million YTD due to the
operational profits in the USA and
New Zealand. Additionally, there
were no potential tax benefits recognised associated with the costs
incurred to maintain Didipio in a state of operational
readiness.
Operating cash flows YTD were $83.4
million, a decrease year-over-year given the $79.0 million received from the gold presale in
the first quarter of 2020. Excluding working capital adjustments,
fully-diluted cash flow per share was $0.22 YTD and $0.13
for the second quarter.
First half investing cash flows of $152.8
million were significantly higher than the prior year
period, primarily due to higher growth capital expenditures at
Haile related to the expansion of waste storage facilities,
increased pre-stripping at Macraes and the ongoing development of
Martha Underground at Waihi.
As at June 30, 2021, the Company's
cash balance stood at $92.3 million,
and net debt increased quarter-on-quarter to $224.8 million, mainly reflecting the lower cash
balance. The Company's total debt facilities stood at $250 million of which $50
million remains undrawn as at 30 June
2021.
Conference Call
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
Local (toll free) dial in numbers are:
Canada & 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.
![OceanaGold Corporation Logo (CNW Group/OceanaGold Corporation) OceanaGold Corporation Logo (CNW Group/OceanaGold Corporation)](https://mma.prnewswire.com/media/1584637/OceanaGold_Corporation_OceanaGold_Reports_Second_Quarter_2021_Fi.jpg)
SOURCE OceanaGold Corporation