OGC OceanaGold Corporation

/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)

MELBOURNE, March 30, 2017 /CNW/ - OceanaGold Corporation (TSX/ASX: OGC) (the "Company") is pleased to provide an update on its global exploration program following strong drill results at each operation and its updated annual Resource and Reserve ("R&R") statement for the year ended December 31, 2016. Note the Haile reserves remain unchanged pending the completion of the optimisation study expected in the middle of 2017. Further, the year-on-year comparison commentary included in this release excludes the El Dorado resources and Reefton reserves.

Key Highlights

• Total Measured and Indicated Resources of 9.93 Moz of gold, 5.6 Moz of silver and 0.21 Mt of copper and Inferred Resources of 3.1 Moz of gold, 0.8 Moz of silver and 0.03 Mt of copper.
• Total Proven and Probable Reserves of 5.04 Moz of gold, 5.0 Moz silver and 0.18 Mt copper.
• Completed 12,466 metres of drilling at the Palomino target at Haile with significant intercepts that include: 66.3m @ 3.0 g/t Au, 33.5m @ 4.6 g/t Au, 4.2m @ 14.2 g/t Au, and 9.1m @ 11.7 g/t Au.
• Defined a maiden underground resource of 20 koz Indicated Resource and 137 koz Inferred Resource on veins associated with the Martha Project at Waihi which contributed to a 22% increase year-on-year in total resources at Waihi to 527 koz (371 koz Measured and Indicated and 156 koz Inferred) after mine depletion.
• Continued exploration success at Waihi from underground and surface drilling yielding significant intercepts that include:
  • Edward: 12.6m @ 16.5 g/t Au and 120.5 g/t Ag and 6.4m @ 7.0 g/t Au and 23.8 g/t Ag,
  • Daybreak: 6.7m @ 7.8 g/t Au and 10.2 g/t Ag
  • Gladstone: 90.0m @ 1.1 g/t Au and 4.9 g/t Ag, 43.6m @ 2.2 g/t Au and 8.7 g/t Ag, 7.9m @ 5.0 g/t Au and 25.9 g/t Ag and 5m @ 8.4 g/t Au and 19.0 g/t Ag
  • Favona: 1.6m @ 426 g/t Au and 856 g/t Ag, 17.6m @ 2.4 g/t Au and 7.9 g/t Ag and 20.1m @ 3.0 g/t Au and 4.8 g/t Ag
  • Rex: 2.4m @ 32.4 g/t Au and 1.6m @ 11.0 g/t Au.
• Continued exploration success at Macraes including 14.0m @ 3.7 g/t Au, 12.0m @ 2.3 g/t Au, 4.0m @ 7.8 g/t Au, 9.0m @ 2.7 g/t Au and 4.0m @ 5.5 g/t Au from Golden Point.
• Significant drill intercepts from the Didipio deposit that include 131.0m @ 2.5 g/t Au and 0.4% Cu and 115.0m @ 2.4 g/t Au and 0.5% Cu from infill drilling and 44.0m @ 1.2 g/t Au and 0.6% Cu and 10.0m @ 1.5 g/t Au and 0.4% Cu from deeper extensional drilling.

Mick Wilkes, President and CEO said, "OceanaGold has a portfolio of high quality assets which includes a significant mineral endowment across our operational footprint. Last year, we initiated the most extensive exploration program in our Company's history, which produced significant results across our business."

"In New Zealand, where we are the country's largest gold miner, we remain committed to expanding our exploration efforts to increase resources and achieve mine life extensions at both Waihi and Macraes. Furthermore, the exploration success we achieved in 2016 at the Horseshoe deposit, when combined with the Haile optimisation study offers significant upside in the near-term to further increase our reserves," he added.

"In 2017, one of our primary areas of focus is to leverage the many opportunities for organic growth of the business that we believe will create significant value." 

On a consolidated basis, the Company's total Proven and Probable ("P&P") Reserves stand at 5.04 Moz of gold, 5.0 Moz of silver and 0.18 Mt of copper, reflecting slight decreases in gold and copper from the previous year due to mine depletion but partly offset by reserve replacement in New Zealand. Silver reserves increased by 12% due to revised estimates of the silver content in the ore stockpiles.

Table 1 – Updated Reserve Table (as at 31 December 2016)

Consolidated Measured and Indicated ("M&I") Resources (inclusive of reserves) total 9.93 Moz of gold, 5.6 Moz of silver and 0.21 Mt of copper at the end of 2016, a decrease from the previous year due to mine depletion and removal of the El Dorado resource, but partly offset by additional resources defined through the Company's extensive 2016 exploration programs. Total consolidated Inferred Resources stand at 3.1 Moz of gold, 0.8 Moz of silver and 0.03 Mt of copper.

Table 2 – Updated Resource Statement (as at 31 December 2016)

Table 3 – Updated Resource Statement for Minority Interest in Assets (as at December 31, 2016) 

United States

At Haile, open pit reserves and resources remain unchanged from 31 December 2015. Upon completion of the Haile optimisation study in mid-2017, the Company will provide an update to the Haile open pit and underground resources and reserves. Results from the 2016 exploration campaign at Haile will be incorporated into the optimisation study, including more than 35,000 metres of drilling from 66-holes at the Horseshoe underground deposit.

Between September 2016 and March 2017, the Company drilled 23 diamond holes for 12,466 metres at the Palomino target (Figure 1). Assays for the first 15 holes (Table 4) demonstrate extensions to the mineralisation along strike from this underground target which is 300 metres below surface and approximately 300 metres long (Figure 2).

At the adjacent Snake target, below the Snake pit and between the Horseshoe and Palomino underground deposits (Figure 2), the Company tested extensions to known mineralisation with seven diamond holes for 4,355 metres. Assays for these drill holes are pending.

To further support the optimisation study, the Company will drill prospective deeper mineralisation at Snake, Mustang and Mill Zone Deeps targets in the first half of 2017.  At the Mustang target, a 44-hole, 16,000 metre resource delineation diamond drill program commenced in the first quarter to test extensions to mineralisation north of the Chase Hill and Ledbetter resources. At Mill Zone Deeps, the plan is to drill four infill holes for 1,500 metres in the second quarter.

Geophysical data processing and evaluation were completed for the Haile region in late December 2016 including magnetic, EM, gravity and IP data and are being integrated with geology and drilling to identify further near mine exploration targets.

Table 4 – Significant Drill Intersections from Palomino Drilling, Nov 2016 – March 2017

New Zealand

Waihi

At Waihi, P&P Reserves at the end of 2016 stood at 0.27 Moz of gold and 0.54 Moz of silver in the underground and 0.08 Moz of gold and 0.77 Moz of silver in the open pit. There was no year-on-year change to the open pit reserves and a 12% decrease in underground reserves due to mine depletion.

The Company is pleased to announce a maiden underground resource of 20 koz Indicated Resource and 137 koz Inferred Resource on veins associated with the Martha Project which contributed to a 22% increase year-on-year in total resources of 527 koz (371 koz Measured and Indicated and 156 koz Inferred) after mine depletion.

In 2016, the Company drilled over 35,000 metres at Waihi with surface and underground exploration drilling and defined a significant exploration target beneath the current open pit at Martha. The Martha project is a significant, medium term exploration target generated through preliminary modeling based on limited drilling and historical crosscut data beneath Martha. The Martha project will be a key focus for the exploration team in 2017 and 2018 to increase and upgrade the resource base.  

In the first two months of 2017, the Company drilled 6,622 metres, utilising three underground and up to five surface drill rigs. Drilling continues to return good widths and grades across multiple targets, adding incremental ounces on vein extensions to those currently being mined at Correnso, Empire, Christina and Daybreak. To complement the surface drilling around the perimeter of the open pit in 2016, the Company commenced two underground exploration drives in 2017 from which drilling will test the deeper extensions of known veins.

This year, the Company also commenced drilling in the Favona and Gladstone areas. Early results have been encouraging with good widths and grade that have the potential to extend the life of the operation. Additionally, the Company commenced drilling on the Rex vein, a splay off the Royal vein, which has returned significant intercepts that are currently being followed up with further drilling (Table 6).

Table 5 presents significant results to hand since the 12 December 2016 exploration update.

Table 5 – Significant Intersections from Waihi Resource Drilling

Table 6 – Significant Intersections from Waihi Exploration Drilling

Macraes

At Macraes, P&P Reserves at the end of 2016 stood at 1.22 Moz of gold including 0.14 Moz of gold at the Frasers Underground as drill programs at Coronation and Coronation North successfully offset mine depletion. Macraes has a total M&I Resource of 3.49 Moz of gold and an Inferred Resource of 1.3 Moz gold.

In December 2016, OceanaGold announced the closure of the Reefton Mine and as such removed the Reefton reserves from its mineral inventory. The resources however, have been retained in the Company's inventory.

Over 31,000 metres of diamond and reverse circulation drilling was completed in 2016. In the first two months of 2017, the Company drilled 4,080 metres utilising one underground diamond and up to three surface diamond / reverse circulation drills rigs. Since the last exploration update in December 2016, the Company has drilled several targets along the 35-kilometre Hyde-Macraes Shear Zone including Coronation North, Trimbells, Golden Point and Frasers Underground (Figure 4). Drilling is currently targeting extensions to known mineralisation at Coronation North, Coronation and Golden Point.

Following the revision of an updated Coronation North resource model in December 2016, approximately 34 koz were added to its resource before the end of the year with mineralisation remaining open to the southeast and current drilling focused on testing this extension. The Company is also drill testing for extensions to the east of the historic Golden Point deposit with encouraging results received to-date (Figure 5 and Table 7).

Table 7 – Significant Intersections from Golden Point

Philippines

At Didipio, P&P Reserves stood at 1.46 Moz of gold, 3.73 Moz of silver and 0.18 Mt of copper; a 6% and 2% year-on-year decrease in gold and copper respectively, due to mine depletion. Silver reserves increased by 0.51 Moz net of mine depletion due to revised estimates of the silver content in the ore stockpiles.

In the last quarter of 2016, the Company completed more than 9,000 metres of diamond drilling. In the first two months of 2017, the Company completed 2,625 metres of drilling focused on infill and extensional underground drilling of the Didipio ore body and initial drilling of early stage targets, utilising two underground and one surface diamond drill rig.

Didipio underground infill drilling continued with the completion of 12 holes for 2,495 metres between December 2016 and February 2017.  All holes intersected mineralisation (Table 8). The initial drilling of depth extensions to the Didipio resource has been completed with assay results confirming the continuation of mineralisation (Table 9).

Exploration continues within the broader FTAA area with drilling of the Mogambos prospect and detailed surface exploration at the D'Fox, Napartan (part of TNN), Binogawan (part of MMB), and Capisaan-Belet prospects. At the Mogambos prospect, initial drilling of 1,056 metres tested a large Au-Cu soil anomaly associated with diorite and monzonite intrusives. Narrow zones of mineralisation were intersected including 4 metres @ 1.87 g/t Au, 656 ppm Cu from 32 metres and 1.5 metres @ 1.1 g/t Au, 1.02% Cu from 136.7 metres.

Table 8 – Significant Intersections from Didipio Infill Drilling

Table 9 – Significant Intersections from Didipio Depth Extensional Drilling