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OceanaGold Reports Preliminary Full Year and Fourth Quarter 2020 Operational Results

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OceanaGold Reports Preliminary Full Year and Fourth Quarter 2020 Operational Results

 

 

 

 

 

OceanaGold Corporation (TSX: OGC) (ASX: OGC) is pleased to announce its preliminary full year and fourth quarter 2020 operational results for the year ended 31 December 2020. The numbers contained in this document are unaudited and subject to finalisation. The Company will release its complete 2020 audited financial and operational results after TSX market close on Thursday February 18, 2021 (Toronto Eastern Standard Time).

 

Key Highlights

 

  • Achieved consolidated full year gold production of 301,675 ounces including 99,155 ounces produced in the fourth quarter.
  • Unaudited consolidated All-In Sustaining Costs for the full year of $1,276 per ounce sold and cash costs of $866 per ounce sold.
  • Haile produced 48,988 ounces of gold in the fourth quarter and 137,413 ounces for the full year.
  • Martha Underground progressing to first production in the second quarter of 2021.
  • Completed new, four-year $250 million revolving credit facility with December 31, 2024 maturity date.
  • Ended the full year with immediately available liquidity of $229 million, including $179 million of cash on hand and $50 million in undrawn credit facilities.
  • Philippines Office of the President instructed government agencies to finalise terms and conditions of the Didipio FTAA renewal.

 

Michael Holmes, President and CEO of OceanaGold said, “We delivered a strong fourth quarter of production, consistent with our core value to deliver on our commitments. Despite the ongoing risks associated with the COVID-19 global pandemic in the United States, Haile achieved its full year production guidance with 137,413 gold ounces produced including 48,988 ounces in the fourth quarter. The risks associated with the management of COVID-19 remain, and we are focussed on keeping our workforce safe while delivering on our commitments. We expect the continued mining of high-grade zones at Haile through the first half of 2021.”

 

“In New Zealand, both Macraes and Waihi operations delivered on full year production guidance with 144,487 and 19,775 ounces of gold, respectively. Development of the Martha Underground continues to advance, and we expect first production at the end of the second quarter. Meanwhile at Macraes, development of Golden Point Underground is progressing well with first production on-track for the fourth quarter. Over 30,000 metres were drilled in the Waihi District through 2020 with fourth quarter activities focussed on resource conversion drilling at Martha Underground and Wharekirauponga.”

 

“In December, the Company met with Philippine Government officials, as instructed by the Office of the President, to finalise the terms and conditions of the FTAA renewal. We expect the renewal will be returned to the Office of the President for review and approval in the near-term. Didipio is a world-class operation that employs thousands of Filipinos and is a significant source of economic benefit to the National Government as well as the local communities of Nueva Vizcaya and Quirino. We look forward to working with stakeholders and Government officials to safely restart operations and continue the significant socio-economic benefits when the renewal has been approved. OceanaGold is a responsible gold mining Company that is focussed on operating to the highest social and environmental international standards and considers Didipio the template for responsible mining globally.”

 

“Looking ahead to 2021, we expect stronger year-on-year production. Our robust organic growth pipeline is advancing to plan, and we are excited to bring Martha Underground into full production in the second quarter. Exploration remains a critical part of the OceanaGold story, and we will continue to invest in the drill bit to discover and convert ounces at each of our operations. OceanaGold is a dynamic and resilient gold miner with an exciting future, and we look forward to releasing our inaugural multi-year guidance on February 18 and hosting a webcast to better define the future of the business.”

 

 

Table 1 – Fourth Quarter and Full Year 2020 Operational Results

 

Quarter ended 31 Dec 2020 Haile Didipio Waihi Macraes Consolidated
Q4 2020 Q4 2019
Gold Produced koz 49.0 7.6 42.6 99.2 108.2
Gold Sales koz 46.7 7.5 42.2 96.4 107.3
Average Gold Price(1) US$/oz 1,877 1,826 1,669 1,648 1,404
Copper Produced kt 0.1
Copper Sales kt
Average Copper Price US$/lb
Material Mined kt 9,956 53.4 11,565 21,574 19,924
Waste Mined kt 8,661 0.8 9,108 17,770 16,617
Ore Mined kt 1,295 52.6 2,456 3,804 3,306
Mill Feed kt 844 80 1,450 2,374 2,449
Mill Feed Grade g/t 2.17 3.29 1.08 1.54 1.59
Gold Recovery % 83.2 89.7 84.2 84.1 86.4
Cash Costs US$/oz 672 1,017 864 783 757
Site All-In Sustaining Costs(2) US$/oz 904 955(3) 1,140 1,075 980
Full Year 31 Dec 2020 Haile Didipio Waihi Macraes Consolidated
2020 2019
Gold Produced koz 137.4 19.8 144.5 301.7 470.6
Gold Sales koz 138.5 6.8 21.0 144.2 310.5 448.4
Average Gold Price(1) US$/oz 1,774 1,672 1,663 1,696 1,573 1,360
Copper Produced kt 10.3
Copper Sales kt 6.9
Average Copper Price US$/lb 2.84
Material Mined kt 38,323 131.3 47,450 85,904 78,408
Waste Mined kt 34,922 2.8 40,371 75,296 67,128
Ore Mined kt 3,401 128.5 7,079 10,608 11,280
Mill Feed kt 3,511 137 5,419 9,067 12,212
Mill Feed Grade g/t 1.52 5.03 1.01 1.27 1.42
Gold Recovery % 79.5 89.0 82.2 81.4 84.4
Cash Costs US$/oz 945 443 641 844 866 733
Site All-In Sustaining Costs(2) US$/oz 1,345 444 583(3) 1,204 1,276 1,061
(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. Macraes’ average gold price are based on revenue including the gold prepay unwind for September to December.
(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 some proceeds from the sale of sustaining assets during the periods and the associated low sales volume.

 

 

The Company produced 301,675 ounces of gold, including 99,155 ounces in the fourth quarter. Gold production for the fourth quarter increased 57% quarter-on-quarter due to significantly higher production at Haile and Macraes attributable to higher head grades.

 

On a consolidated basis, the Company delivered AISC of $1,276 per ounce on annual sales of 310,531 ounces of gold including fourth quarter AISC of $1,075 per ounce on sales of 96,398 ounces of gold. AISC decreased 37% quarter-on-quarter on higher gold sales.

 

Haile produced 137,413 ounces of gold, including 48,988 ounces in the fourth quarter, a 73% quarter-on-quarter increase. In the quarter, the Company accessed higher grade zones of the open pits and increased mine utilisation rates despite continued challenges related to COVID-19. As of 2020 year-end, the Haile operation was impacted by 63 positive COVID-19 cases with over 500 workers self-isolating for a two-week period at some point since the beginning of March 2020. The two-week isolation periods and other strict protocols were implemented to safeguard the health and wellbeing of the workforce while at site. Mining of active high-grade zones is expected to continue through the first half of 2021 before grades reduce in the second half consistent with the open pit mine sequence.

 

In New Zealand, Macraes produced 144,487 ounces of gold, including 42,564 ounces in the fourth quarter.  The quarter-on-quarter increase primarily reflects higher head grades from mining at Coronation North phase 4 and Gay Tan phase 2. Resumption of processing at Waihi in the fourth quarter delivered 7,604 ounces of gold production and 19,775 ounces of gold for the full year.

 

Development of Martha Underground continues to progress to first production by the end of the second quarter of 2021. Underground development advanced 2,276 metres in the fourth quarter and totalled 7,371 metres for the full year. Mining and processing of narrow vein ore from Correnso will continue in the first quarter of 2021 before the process plant is shut down for upgrades. Processing will resume with ore feed exclusively from the Martha Underground later in the second quarter.

 

In the Philippines, the Company had multiple meetings with national government officials in December 2020 to finalise the terms of the FTAA renewal, and the renewal is expected to be endorsed to the Office of the President for approval. The Company will continue to engage with government officials and will work with stakeholders for a safe restart of operations at Didipio. The timeline for the renewal remains uncertain and achieving steady state production will be dependent on the timing of the renewal and workforce recruitment efforts.

 

The Company will release multi-year guidance on Thursday February 18, 2021 after TSX market close (Toronto Eastern Standard time) / Friday February 19, 2021 (Brisbane Eastern Standard Time) in conjunction with the Company’s full year and fourth quarter 2020 financial and operational results.

 

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.

 

Posted January 18, 2021

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