/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, Oct. 27, 2016
/CNW/ - OceanaGold Corporation (TSX/ASX/NZX: OGC) (the
"Company") is pleased to release its financial and operational
results for the quarter ended 30 September
2016. 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.
Key Highlights
- Completed construction of the Tailings Storage Facility at
Haile and commenced dry commissioning activities including the
crusher and conveyor circuits. The project remains on budget and
schedule for first ore through the mill before the end of
2016.
- Consolidated Year-to-Date production of 314,313 ounces of gold
and 17,358 tonnes of copper, including 88,975 ounces of gold and
5,114 tonnes of copper produced in the third quarter.
- Consolidated Year-to-Date All-In Sustaining Costs of
$730 per ounce and cash costs of
$477 per ounce on sales of 331,489
ounces of gold and 16,453 tonnes of copper.
- Revenue of $150.4 million with an
EBITDA of $61.6 million and a net
profit of $30.7 million in the third
quarter.
- Strong balance sheet with immediate liquidity of $145.3 million including $88.1 million in cash.
- Identified Didipio underground design enhancements resulting in
projected capital cost savings over the life of mine.
- Received DENR Audit Report and provided Company response on
findings and recommendations; awaiting a formal response from the
DENR.
- On track to achieve 2016 production and cost guidance.
Mick Wilkes, President and CEO
said, "Our financial performance continued to be strong in the
third quarter and we are well on track to achieve our 2016
production and cost guidance. With a strong balance sheet, we are
well placed ahead of 2017 where we expect to generate even stronger
cash flows with Haile being added to our stable of strong cash-flow
generating operations."
He added, "I am pleased to report that we have commenced
commissioning activities of the crushing circuit at Haile. We
completed the construction of the Tailings Storage Facility ahead
of schedule, which is a remarkable achievement for what was a
critical path item for much of the year. Focus now has turned to
completing the piping, instrumentation and electrical works, all of
which are proceeding according to schedule. The project is in the
final stretch of development and remains on time and on budget, and
I am confident we will meet our goal to mill first ore before the
end of this year."
Table 1 –
Production and Cost Results Summary
|
|
|
|
|
|
|
|
|
Didipio
|
Waihi
|
Macraes and
Reefton
|
Consolidated
|
Third Quarter 2016
Results
|
Q3
2016
|
Q2
2016
|
Gold
Produced
|
ounces
|
25,568
|
23,225
|
40,182
|
88,975
|
102,557
|
Copper
Produced
|
tonnes
|
5,114
|
-
|
-
|
5,114
|
6,272
|
Gold Sales
|
ounces
|
32,505
|
24,842
|
40,848
|
98,195
|
115,906
|
Copper
Sales
|
tonnes
|
5,596
|
-
|
-
|
5,596
|
6,113
|
Cash Costs
|
$ per
ounce
|
126
|
461
|
891
|
529
|
476
|
YTD September 30
2016
|
YTD
Sep 30
2016
|
YTD
Sep 30
2015*
|
Gold
Produced
|
ounces
|
116,455
|
86,748
|
111,110
|
314,313
|
297,663
|
Copper
Produced
|
tonnes
|
17,358
|
-
|
-
|
17,358
|
17,518
|
Gold Sales
|
ounces
|
114,404
|
88,504
|
128,581
|
331,489
|
276,104
|
Copper
Sales
|
tonnes
|
16,453
|
-
|
-
|
16,453
|
17,167
|
Cash Costs
|
$ per
ounce
|
39
|
487
|
861
|
477
|
465
|
All-In Sustaining
Costs
|
$ per
ounce
|
273
|
726
|
1,138
|
730
|
708
|
*: Note includes
results for Waihi Gold Mine
|
|
In the United States,
construction of all major infrastructure at Haile is near
completion, tracking to schedule and budget. The Company has
commenced commissioning activities and has commissioned the
crushing circuit with rock and completed construction of the
Tailings Storage Facility ("TSF") early in the fourth quarter.
Mining activities are achieving a steady-state daily mining rate of
60,000 tonnes and currently mining the first sulphide ore benches.
As at the end of the third quarter, approximately 350,000 tonnes of
oxide and transitional material have been stockpiled for future
processing. As at the end of the third quarter, the Company had
spent approximately $316 million of
the estimated $380 million capital
cost while the capital spent and committed at the end of the
quarter was approximately $349
million.
Consolidated production for the first nine months of 2016 was
314,313 ounces of gold and 17,358 tonnes of copper including 88,975
ounces of gold and 5,114 tonnes of copper produced in the third
quarter. Quarter-on-quarter production decreased as planned due
mainly to lower grades at Didipio and Waihi.
In the Philippines, the Didipio
operations were focused on mining the outer boundaries of the final
stage of the open pit and continued development of the underground
mine. Quarter-on-quarter production decreased as planned and
previously forecast due to mining lower grade ore from the final
stage of the open pit resulting in a lower head grade. In the
quarter, the Company identified design enhancements to the Didipio
underground and as a result the Company projects a life-of-mine
capital cost saving of approximately $30
million related to less infrastructure required and
modification to stope designs around the breccia zones.
As previously reported, the Company received the Department of
Environment and Natural Resources ("DENR") Audit Report on the
Didipio operation. The findings and recommendations were consistent
with discussions it had with the audit team at the close-out
meeting and relate mainly to expanding the Company's education
programs on specific aspects of mining operations to a broader
stakeholder group. The Audit Report stated that the Company has
"exceeded" in meeting environment best practices and Philippine
laws while meeting its permitting obligations. As part of the
standard audit process, the Company responded to the Audit Report
on October 24, 2016. Recently, the
Didipio operation was nominated for the prestigious Presidential
Award for "Most Environmentally Responsible" Mine, a third
consecutive nomination and an award it received in 2015.
In New Zealand, production at
Waihi decreased quarter-on-quarter as expected due mainly to lower
grades and the temporary suspension of operations for one week at
the beginning of August while at Macraes, production increased as
expected from better grades mined in the underground, processing
less stockpiled ore and achieving better recoveries. Exploration
efforts at both Waihi and Macraes continue to advance well with
drilling of primary targets in both gold regions.
Table 2 – Financial Summary*
$'000
|
Q3
Sep 30 2016
|
Q2
Jun 30 2016
|
Q3
Sep 30 2015
|
YTD
Sep 30
2016
|
YTD
Sep 30
2015
|
Revenue
|
150,388
|
169,763
|
109,581
|
481,202
|
364,373
|
Cost of sales,
excluding depreciation and amortisation
|
(77,524)
|
(79,642)
|
(60,779)
|
(229,055)
|
(193,979)
|
General and
administration – merger and acquisition costs
|
-
|
-
|
(4,471)
|
-
|
(6,918)
|
General and
administration - other
|
(11,361)
|
(15,565)
|
(9,062)
|
(39,294)
|
(25,062)
|
Foreign currency
exchange gain/(loss)
|
(604)
|
2,543
|
(269)
|
2,664
|
(2,629)
|
Other
income/(expense)
|
669
|
187
|
68
|
1,209
|
132
|
Earnings before
interest, tax, depreciation and
amortisation (EBITDA) (excluding gain/(loss) on
undesignated hedges)
|
61,568
|
77,286
|
35,068
|
216,726
|
135,917
|
Depreciation and
amortisation
|
(31,973)
|
(28,015)
|
(29,430)
|
(93,757)
|
(88,795)
|
Net interest expense
and finance costs
|
(2,538)
|
(2,536)
|
(2,254)
|
(7,261)
|
(7,049)
|
Earnings before
income tax and gain/(loss) on
undesignated hedges
|
27,057
|
46,735
|
3,384
|
115,708
|
40,073
|
Tax (expense) /
benefit on earnings
|
(2,587)
|
(5,599)
|
1,457
|
(13,392)
|
6,116
|
Earnings/(loss)
after income tax and before
gain/(loss) on undesignated hedges
|
24,470
|
41,136
|
4,841
|
102,316
|
46,189
|
Gain/(loss) on fair
value undesignated hedges
|
8,852
|
(1,828)
|
2,863
|
(11,280)
|
(21,905)
|
Tax (expense)/benefit
on gain/loss on undesignated hedges
|
(2,478)
|
511
|
(810)
|
3,158
|
6,134
|
Share of
profit/(loss) from equity accounted associates
|
(151)
|
(164)
|
-
|
(315)
|
-
|
Net
Profit
|
30,693
|
39,655
|
6,924
|
93,879
|
30,418
|
Basic earnings per
share
|
$0.05
|
$0.07
|
$0.02
|
$0.15
|
$0.10
|
Diluted earnings per
share
|
$0.05
|
$0.06
|
$0.02
|
$0.15
|
$0.10
|
CASH
FLOWS
|
Cash flows from
Operating Activities
|
29,440
|
91,486
|
23,801
|
152,599
|
109,289
|
Cash flows used in
Investing Activities
|
(116,342)
|
(122,496)
|
(22,371)
|
(342,578)
|
(84,493)
|
Cash flows from /
(used in) Financing Activities
|
70,607
|
12,827
|
(2,056)
|
85,467
|
(30,597)
|
*: includes
results for Romarco Minerals and Waihi Gold from 1 and 30 October
2015 respectively.
|
|
|
|
|
Consolidated All-In Sustaining Costs ("AISC") for the nine
months ended September 30, 2016 were
$730 per ounce while consolidated
cash costs were $477 per ounce on
sales of 331,489 ounces of gold and 16,453 tonnes of copper. Third
quarter cash costs were $529 per
ounce on sales of 98,195 ounces of gold and 5,596 tonnes of
copper.
For the third quarter of 2016, the Company reported revenue of
$150.4 million, which was lower than
in the previous quarter as a result of decreased sales. EBITDA of
$61.6 million decreased on the
previous quarter due to lower revenue, which was partially offset
by lower operating and general and administrative costs. The third
quarter net profit was $30.7 million
compared to $39.7 million in the
second quarter. The quarter-on-quarter decrease was mainly due to
lower EBITDA and higher depreciation partially offset by a gain in
the fair value of undesignated hedges.
Operating cash flows before working capital movement was
$60.9 million compared to
$73.8 million in the second quarter,
a decrease resulting from the lower sales. Working capital
increased quarter-on-quarter due to higher trade receivables and
the payment of $7 million in
provisional tax made by the Waihi Gold Mine.
At the end of the third quarter, the Company had total immediate
available liquidity of $145.3 million
including approximately $88.1 million
in cash and $57.2 million undrawn
from its revolving credit facility. Total debt at the end of the
quarter stood at approximately $298
million. In addition, the Company held approximately
$118 million in marketable securities
as at the end of the third quarter from the previous investments it
had made in junior exploration companies.
Mr. Wilkes went on to say, "OceanaGold's vision is to be the
mid-tier gold mining company of choice, by operating high quality
assets that deliver superior returns in a responsible manner. I
believe that our approach of responsible mining combined with our
financial strength and a continued commitment to close engagement
with all of our stakeholders, continues to be the right strategy to
make this happen. We are strongly committed to the Philippines, with a new government that
strives for a responsible mining sector. Didipio is a world-class
operation which exemplifies responsible mining and the social
license it has is unprecedented as clearly demonstrated by the
significant vocal support we have received from our local
communities over the past few months."
Third Quarter 2016 Results Webcast
The Company will host a conference call / webcast to discuss the
results at 8:00am on Friday
28 October 2016 (Melbourne, Australia time) / 5:00pm on Thursday 27
October 2016 (Toronto,
Canada time).
Webcast Participants
To register, please copy and paste the link below into your
browser:
http://event.on24.com/r.htm?e=1285531&s=1&k=5A32766B9C0605A52BD2EA620BECAC8E
Teleconference Participants (required for those who wish to
ask questions)
Local (toll free) dial in numbers are:
Canada & North America: (+1) 888 390 0546
United Kingdom: 0800 652 2435
Australia: 1800 076 068
New Zealand: 0800 453 421
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 within a few hours
after the completion of the webcast.
About OceanaGold
OceanaGold Corporation is a mid-tier, low-cost, multinational
gold producer with assets located in the
Philippines, New Zealand
and the United States. The
Company's assets encompass its flagship operation, the Didipio
Gold-Copper Mine located on the island of Luzon in the Philippines. On the North Island of
New Zealand, the Company operates
the high-grade Waihi Gold Mine while on the South Island of
New Zealand, the Company operates
the largest gold mine in the country at the Macraes Goldfield which
is made up of a series of open pit mines and the Frasers
underground mine. In the United
States, the Company is currently constructing the Haile Gold
Mine, a top-tier asset located in South
Carolina along the Carolina Terrane. The Company expects the
Haile Gold Mine to commence commercial production in early 2017.
OceanaGold also has a significant pipeline of organic growth and
exploration opportunities in the Asia-Pacific and Americas regions.
OceanaGold has operated sustainably over the past 26 years with
a proven track record for environmental management and community
and social engagement. The Company has a strong social license to
operate and works collaboratively with its valued stakeholders to
identify and invest in social programs that are designed to build
capacity and not dependency.
In 2016, the Company expects to produce 385,000 to 425,000
ounces of gold from the combined New
Zealand and Didipio operations and 19,000 to 21,000 tonnes
of copper from the Didipio operation at All-In Sustaining Costs of
US$700 to US$750 per ounce.
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, 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 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