/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, Feb. 1, 2018 /CNW/ - OceanaGold Corporation
(TSX/ASX: OGC) (the "Company") is pleased to release its
full year 2018 production and cost guidance. Additionally, the
Company has provided details related to its capital cost program
and expectations for the year.
Mick Wilkes, President and CEO
said, "We expect this year to be an exciting year for OceanaGold as
we advance our expansion plans at Haile and Waihi through prudent
capital investment and the commencement of the permitting process
in each jurisdiction. We will drive operational enhancements at
Didipio and Haile while furthering our extensive exploration
activities across our business to create organic growth."
"After a strong finish to 2017, the Haile Gold Mine is expected
to increase gold production by 20% to 25% year-on-year with higher
throughput rates. We also expect a solid year at Macraes with a 20%
increase in production from higher grades at Coronation North." He
added, "After the strong performance from Didipio last year, we see
2018 as a year of transition for the asset through the steady
ramp-up of mining rates from panel one in the underground and
continued development of panel two. While at Waihi, our focus is to
further advance and define our expansion plans for the operation
which should deliver significant benefits to our communities and
create value for our shareholders."
Table 1 – 2018 Production and Cost
Guidance
|
|
Didipio
|
Waihi
|
Macraes
|
Haile
|
Consolidated
|
Gold
Production
|
ounces
|
80,000 –
90,000
|
75,000 -
85,000
|
190,000 –
200,000
|
135,000 –
155,000
|
480,000 –
530,000
|
Copper
Production
|
tonnes
|
15,000 –
16,000
|
–
|
–
|
–
|
15,000 –
16,000
|
All-In Sustaining
Costs (1)
|
$ per
ounce
|
$260 –
$310
|
$750 –
$790
|
$950 –
$1,000
|
$725 –
$775
|
$725 –
$775
|
Notes:
|
1.
|
AISC calculation
conforms to the methodology outlined by the World Gold Council. It
includes all cash costs, corporate G&A, maintenance capital
expenditures, capitalised mining expenditures and exploration.
|
Assumptions:
|
- NZD:USD exchange rate of 0.72, average copper
price, inclusive of executed hedges: $3.15 / lb on average for full
year.
|
In addition, the Company is pleased to provide its 2018 capital
expenditure program, which includes capital investments for growth
initiatives such as the Haile expansion, the Martha Project and
development of the second panel at Didipio underground. Exploration
expenditures are consistent with 2017 and reflect the Company's
extensive drilling programs.
Table 3 – 2018 Capital Expenditure
Program
USDm
|
Didipio
|
Waihi
|
Macraes
|
Haile
|
TOTAL
|
Included in
AISC
|
Non-Sustaining
|
40 – 45
|
20 – 23
|
2 – 3
|
40 – 45
|
102 –
116
|
0
|
Sustaining
|
5 – 7
|
2 – 3
|
10 – 12
|
3 – 5
|
20 –
27
|
20 –
27
|
Pre-stripping /
capitalised mining
|
4 – 6
|
3 – 4
|
35 – 40
|
22 – 28
|
64 –
78
|
64 –
78
|
Exploration
|
1 – 2
|
15 – 20
|
3 – 5
|
5 – 7
|
24 –
34
|
6 –
10
|
TOTAL
|
50 –
60
|
40 –
50
|
50 –
60
|
70 –
85
|
210 –
255
|
90 –
115
|
Notes:
|
- Sustaining, Pre-stripping/capitalised mining and
brownfields exploration is included in the Company's All-In
Sustaining Cost guidance
- The Company also expects to spend approximately
$4-$5 million of closure and rehabilitation costs at
Reefton.
|
United States
At Haile, the Company will continue to identify bottlenecks and
increase productivity to further improve throughput rates. As a
result, the operation is expected to increase production by 20% to
25% from 2017 with source feed from both the Mill Zone and Snake
Pits.
Growth capital for 2018 at Haile is expected to range between
$40 million and $45 million as part of the recommendations
outlined in the Optimisation Study which was completed in
June 2017. Capital expenditures for
2018 at Haile include the procurement and installation of a pebble
crusher, tower mill and Isa mill for additional fine grinding
capacity, plus other infrastructure required to debottleneck the
plant and incrementally increase plant throughput rates toward the
optimised design of between 3.5 and 4.0 million tonnes per year,
whilst enhancing gold recoveries.
Although plant recoveries have consistently averaged in the low
80% range since the commencement of commercial production, the
grind size achieved has been only 19 microns. The installation of
additional fine grinding capacity is designed to reduce the grind
size to 13 microns, which the Company expects will potentially
further increase recoveries and deliver additional value from the
asset.
Permitting of the expanded Haile operation is expected to
commence in the second quarter with the main components of the
permitting being the development of an underground operation at
Horseshoe, the expansion of the existing open pit designs and
provision for additional waste and tailings facilities.
Philippines
At Didipio, production in 2018 is expected to be lower than in
2017 mainly due to treating an increased proportion of lower-grade
stockpile material while ramping up the higher-grade production
from the newly developed underground mine. The Company expects an
increased proportion of higher grade mill feed to come from the
underground in 2019 and beyond, which will result in gold
production of between 110,000 and 130,000 ounces.
Underground ore was delivered to the ROM pad early in 2018 while
construction of the primary underground pump and paste-fill plant
was completed with commissioning currently underway. Once
commissioned, stoping from panel one of the underground will
steadily ramp-up, delivering 500,000 to 600,000 tonnes of mill feed
in 2018 and higher-grades in the second half of 2018. Construction
of panel two has commenced and as construction continues mill feed
will increase, whereby at the end of 2019, when construction is
expected to be complete, the underground mining rate will increase
to a steady-state of 1.6 million tonnes per annum.
The Company is also in the process of updating the mine plan at
Didipio, which is expected to deliver enhanced value through a
revised mine plan, mining higher grade ore from the breccia zone
earlier in the mine life.
New Zealand
At Waihi, the production decrease is a result of the mining
sequence whereby the operation will be mining lower grade areas of
the underground veins for much of the year.
The Company will continue to advance the Martha Project with
permitting expected to commence in the second quarter. Drilling
from the two underground drill drives will continue, with the goal
of converting the targeted one million ounces to resources.
At Macraes, the increased production is mainly attributable to
higher grades from Coronation North. This higher head grade is
expected to deliver a 20% year-on-year increase in production. The
higher production and improved margins at Macraes are expected to
persist through 2019 and into 2020.
Exploration
Exploration capital expenditures are similar to 2017 and support
the Company's extensive drilling program across its operational
footprint and Greenfields targets such as WKP and in the Carolinas.
Results from drilling over the past few years have delivered
positive results with significant high-grade intercepts across each
asset and potential extensions to the resource base.
Mr. Wilkes went on to say, "Our focus continues to be on
delivering sustained and long-term value. We will invest
judiciously seeking opportunities that have the potential to
generate strong returns on invested capital, and maintain the same
level of performance achieved over the past several years."
About OceanaGold
OceanaGold Corporation is a mid-tier, high-margin, multinational
gold producer with assets located in the
Philippines, New Zealand
and the United States. The
Company's assets encompass 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 operates the Haile Gold Mine, a
top-tier, long-life, high-margin asset located in South Carolina. OceanaGold also has a
significant pipeline of organic growth and exploration
opportunities in the Americas and Asia-Pacific regions.
OceanaGold has operated sustainably over the past 27 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 2018, the Company expects to produce 480,000 to 530,000
ounces of gold and 15,000 to 16,000 tonnes of copper with All-In
Sustaining Costs that range from $725
to $775 per ounce sold.
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