/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. 25, 2018 /CNW/ - OceanaGold Corporation
(TSX: OGC) (ASX: OGC) (the "Company") is pleased to release
its financial and operational results for the nine and three months
ended 30 September 2018. Copies 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
- Second increase to gold production guidance with the range
increased to 515,000 ounces to 545,000 ounces (from 500,000 -
540,000 ounces). All-In Sustaining Costs guidance unchanged.
- Recorded revenue of $589.2
million with EBITDA of $290.0
million and a net profit of $110.8
million in the nine months ended September 30, 2018, including revenue of
$186.8 million with EBITDA of
$79.4 million and a net profit of
$21.7 million in the third
quarter.
- Reduced total debt by 23% quarter-on-quarter through the
discretionary repayment of $50
million towards the revolving credit facility and
$2.7 million in equipment leases
while paying $12.4 million in
dividends.
- Maintained immediate liquidity at $139.7
million, excluding $76.6
million of marketable securities held as strategic
investments.
- Consolidated production of 406,631 ounces of gold and 12,118
tonnes of copper in the nine months ended September 30, 2018, including 138,034 ounces of
gold and 4,310 tonnes of copper produced in the third quarter.
- All-In Sustaining Costs of $751
per ounce on sales of 400,556 ounces of gold and 11,404 tonnes of
copper in the nine months ended September
30, 2018. Third quarter consolidated All-In Sustaining Costs
of $761 per ounce on sales of 134,134
ounces of gold and 4,232 tonnes of copper.
- Achieved 34th consecutive quarter of positive return on
invested capital.
- Exploration success continued across the business with
significant results reported at the WKP regional target in
New Zealand.
Mick Wilkes, President and CEO
said, "I am very pleased with our operational and financial
performance so far this year with each of our operations delivering
solid production and strong cash flows. We expect to continue this
positive momentum to close out the year on a strong note with
increased cash flows expected in the fourth quarter. Despite the
lower gold price received in the third quarter, we still generated
a solid $64 million in net operating
cash flow allowing us to continue our investment in exploration and
organic growth projects, make a discretionary debt repayment of
$50 million and pay $12.4 million in dividends."
He added, "Over the past 12 months, we have decreased our total
debt position by 43% while increasing our total liquidity by 18%
and we have achieved this through strong cash flow generation from
our high-quality assets. We have maintained solid EBITDA margins
and remain one of only a few gold mining companies that has
delivered a positive return on invested capital every quarter
dating back to 2010."
"Our organic growth opportunities across our business continue
to advance well with the Haile expansion expected to increase
annual gold production while the Martha project is set to deliver
significant value in the near future. Exploration continues to
yield excellent results, exceeding our own expectations. We will
therefore, continue to invest in exploration drilling to create
more value for shareholders."
"Finally, on the back of the strong operational performance, we
have increased our guidance for the full year. We now expect that
the full year gold production will fall between 515,000 to 545,000
ounces while maintaining our AISC guidance range of $725 to $775 per
ounce sold."
Table 1 – Production and Cost Results Summary
|
|
|
|
|
|
|
Quarter ended 30 Sep
2018
|
|
Haile
|
Didipio
|
Waihi
|
Macraes
|
Consolidated
|
Q3 2018
|
Q3 2017
|
Gold
Produced
|
koz
|
28.6
|
32.8
|
26.6
|
50.0
|
138.0
|
136.0
|
Gold Sales
|
koz
|
27.3
|
32.2
|
26.0
|
48.6
|
134.1
|
131.1
|
Average Gold
Price
|
US$/oz
|
1,213
|
1,168
|
1,241
|
1,215
|
1,202
|
1,276
|
Copper
Produced
|
kt
|
-
|
4.3
|
-
|
-
|
4.3
|
4.4
|
Copper
Sales
|
kt
|
-
|
4.2
|
-
|
-
|
4.2
|
3.3
|
Average Copper
Price
|
US$/lb
|
-
|
2.95
|
-
|
-
|
2.95
|
2.82
|
|
|
|
|
|
|
|
|
Cash Costs
|
US$/oz
|
550
|
312
|
510
|
594
|
501
|
416
|
All-In Sustaining
Costs
|
US$/oz
|
1,081
|
449
|
603
|
874
|
761
|
748
|
Year to date 30 Sep
2018
|
|
Haile
|
Didipio
|
Waihi
|
Macraes
|
Consolidated
|
YTD 2018
|
YTD 2017
|
Gold
Produced
|
koz
|
104.3
|
91.6
|
65.9
|
144.8
|
406.6
|
408.4
|
Gold Sales
|
koz
|
102.9
|
91.7
|
66.9
|
139.1
|
400.6
|
387.0
|
Average Gold
Price
|
US$/oz
|
1,288
|
1,265
|
1,308
|
1,280
|
1,315
|
1,254
|
Copper
Produced
|
kt
|
-
|
12.1
|
-
|
-
|
12.1
|
14.7
|
Copper
Sales
|
kt
|
-
|
11.4
|
-
|
-
|
11.4
|
13.2
|
Average Copper
Price
|
US$/lb
|
-
|
3.05
|
-
|
-
|
3.05
|
2.63
|
|
|
|
|
|
|
|
|
Cash Costs
|
US$/oz
|
414
|
218
|
614
|
594
|
465
|
371
|
All-In Sustaining
Costs
|
US$/oz
|
828
|
349
|
756
|
957
|
751
|
644
|
Table 2 – Financial Summary
|
|
|
|
|
|
Quarter ended 30 Sep
2018
(US$m)
|
Q3
Sep 30
2018
|
Q2
Jun 30
2018
|
Q3
Sep 30
2017(1)
|
YTD
Sep 30
2018
|
YTD
Sep 30
2017
|
Revenue
|
186.8
|
205.7
|
144.8
|
589.2
|
478.3
|
Cost of sales,
excluding depreciation and amortisation
|
(92.3)
|
(83.3)
|
(59.5)
|
(260.3)
|
(190.1)
|
General and
administration – other
|
(12.3)
|
(12.7)
|
(11.4)
|
(35.2)
|
(32.1)
|
General and
administration – indirect taxes (3)
|
(4.0)
|
(2.8)
|
(2.0)
|
(8.9)
|
(4.8)
|
Foreign currency
exchange gain/(loss)
|
0.7
|
1.3
|
0.1
|
2.6
|
0.6
|
Gain on sale of
available-for-sale assets
|
-
|
-
|
-
|
-
|
5.3
|
Other
income/(expense)
|
0.5
|
1.5
|
1.3
|
2.6
|
2.3
|
EBITDA (excluding
gain/(loss) on undesignated
hedges and
impairment charge)
|
79.4
|
109.7
|
73.3
|
290.0
|
259.5
|
Depreciation and
amortisation
|
(46.6)
|
(47.7)
|
(44.3)
|
(145.7)
|
(131.9)
|
Net interest expense
and finance costs
|
(4.0)
|
(3.6)
|
(4.4)
|
(11.5)
|
(13.0)
|
Earnings before
income tax (excluding gain/(loss) on
undesignated
hedges and impairment charge)
|
28.8
|
58.4
|
24.6
|
133.0
|
114.7
|
Income tax expense on
earnings
|
(8.4)
|
(10.7)
|
(3.3)
|
(26.2)
|
(9.1)
|
Earnings after
income tax and before gain/(loss) on
undesignated
hedges and impairment charge
|
20.4
|
47.7
|
21.3
|
106.8
|
105.6
|
Impairment
charge
|
-
|
-
|
-
|
-
|
(17.7)
|
Write off deferred
exploration expenditure
|
-
|
(2.9)
|
-
|
(2.9)
|
-
|
Gain/(loss) on fair
value of undesignated hedges
|
1.4
|
0.0
|
0.6
|
7.4
|
(6.2)
|
Tax (expense) /
benefit on gain/loss on undesignated
hedges
|
(0.1)
|
(0.1)
|
(0.2)
|
(0.3)
|
1.7
|
Share of loss from
equity accounted associates
|
(0.0)
|
(0.1)
|
(0.0)
|
(0.2)
|
(0.3)
|
Net
Profit
|
21.7
|
44.6
|
21.7
|
110.8
|
83.1
|
Basic earnings per
share
|
$0.04
|
$0.07
|
$0.04
|
$0.18
|
$0.14
|
Diluted earnings per
share
|
$0.03
|
$0.07
|
$0.03
|
$0.18
|
$0.13
|
(1)
|
For the nine
months ended September 30, 2017, all revenue and costs reported did
not include the Haile operations as these were capitalised as
commercial production was declared effective from October 1,
2017.
|
(2)
|
The Company's
consolidated financial results for the quarter ended March 31, 2018
reflected adjustments on adoption of IFRS 15 effective from January
1, 2018.
|
(3)
|
Represents
indirect taxes in the Philippines – specifically excise tax
(expensed as from April 1, 2018) and local business and property
taxes.
|
Table 3 – Cash Flow Summary
|
|
|
|
|
|
Quarter ended 30 Sep
2018
(US$m)
|
Q3
Sep 30
2018
|
Q2
Jun 30
2018
|
Q3
Sep 30
2017
|
YTD
Sep 30
2018
|
YTD
Sep 30
2017
|
Cash flows from
Operating Activities
|
64.3
|
109.0
|
38.0
|
250.4
|
178.9
|
Cash flows used in
Investing Activities
|
(58.7)
|
(60.0)
|
(50.4)
|
(177.8)
|
(188.1)
|
Cash flows used in
Financing Activities
|
(63.3)
|
(8.3)
|
(13.6)
|
(76.0)
|
(9.8)
|
2018 Guidance
As a result of the strong operational performance in the first
nine months of the year and positive outlook, the Company has
increased its full year gold guidance range to 515,000 to 545,000
ounces while maintaining its robust AISC cost guidance range of
$725 to $775 per ounce sold. The main driver for the
guidance increase is Didipio on better grades and recoveries.
Operations
For the nine months ended September 30,
2018, the Company produced 406,631 ounces of gold including
138,034 ounces in the third quarter. Gold production
quarter-on-quarter decreased, which was previously forecast and due
primarily to lower production at Haile from lower grades and mill
utilisation. In July, the process plant was shut down for an
extended period for planned maintenance and installation of the
pebble crusher and upgraded tailings thickener, both of which
relate to the expansion of the plant.
Consolidated All-In Sustaining Costs ("AISC") for the nine
months ended September 30, 2018
remains within the full year guidance range and reported at
$751 per ounce on sales of 400,556
ounces of gold. AISC in the third quarter was in line with
expectations at $761 per ounce on
sales of 134,134 ounces of gold. Quarter-on-quarter AISC increased
as expected and previously forecast due to lower sales and a
slightly higher cost of goods sold. The decrease in sales relate to
lower production from lower grades and timing of sales at
Haile.
Gold production is expected to be similar quarter-on-quarter
with increased production expected at Haile and Macraes offset by
decreased production expected from Didipio and Waihi. The Company
does expect cash flows to increase through stronger margins,
particularly at Haile. Consolidated AISC are expected to come
within the Company's 2018 cost guidance range.
Financial
In the third quarter, the Company reduced its total debt
position by 23% through a repayment of $50
million towards the revolving credit facility and
$2.7 million in equipment leases. In
the quarter, the Company also paid $12.4
million in dividends reflecting its strong cash flow
generation.
At the end of the third quarter, the Company maintained
immediate available liquidity of $139.7
million of which $69.7 million
was held in cash. The cash balance excludes $76.6 million held in strategic equity
investments.
In the nine months ended September 30,
2018, the Company reported revenue of $589.2 million, its highest ever nine-month
calendar year revenue. Revenue for the third quarter was
$186.8 million which was a
quarter-on-quarter decrease of approximately 9% due mainly to an 7%
drop in the average gold price received. The Company expects higher
sales in the fourth quarter and at better margins.
The YTD 2018 EBITDA margin stood at a robust 49% with
$290.0 million recorded in the first
nine months of the year, which was also the highest EBITDA the
Company has achieved over the first nine months of a calendar year.
Third quarter EBITDA of $79.4 million
was a decrease quarter-on-quarter due to lower revenue and slightly
higher operating costs. On an annualized basis, return on invested
capital ("ROIC") was approximately 9%.
Organic Growth
The Company continued to advance its organic growth
opportunities in New Zealand, the
USA and the Philippines while achieving significant
drill results across both brownfield and greenfield exploration
targets.
In New Zealand, the Company
continued to advance the permitting for a 10-year mine life
extension at Waihi with positive support from multiple stakeholders
from the town of Waihi and in the region. In the quarter, the
Company increased the mineral Resource at the Martha Project and
continues to drill along two drill drives beneath the open pit to
prove up an exploration target that had recently increased by
50%.
At Macraes, the Company continued to drill multiple targets
mainly at Coronation North, Coronation, Deepdell, Frasers and
Frasers Underground with encouraging results. The Company also
achieved significant results at Golden Point and is now
investigating the potential of a new underground mining operation.
Additionally, the Company is working on a revised mine plan
together with the recent exploration success could further extend
the mine life at Macraes.
In the United States, the Haile
process plant expansion continued to progress well with the
installation and commissioning of the pebble crusher and upgraded
tailings thickener. With the installation of this new equipment,
the Company has experienced record daily throughput rates that
annualise to over 3.2 million tonnes. In addition, the Company
poured the concrete foundation for the Tower mill and commenced the
foundation pour for the Isa mill. Both sets of equipment are
expected to be in operation in the first half of 2019. Finally, the
Company commenced the permitting process for the Horseshoe
Underground, expanded open pit mine design and additional
supporting mine infrastructure.
Exploration at Haile continued to yield encouraging results with
additional mineralisation intersected at depth and in between the
Ledbetter, Mustang, Mill Zone, Snake and Red deposits. The results
demonstrate the potential to add low-cost reserves to the mine
plan.
In the Philippines, the Didipio
underground continued to ramp-up of panel one. Development of the
underground water reservoir is near completion while development of
panel two of the underground continues to track to plan. In the
third quarter, the Company completed surface mining of the Breccia
zone, which is designed to further increase the stability of
underground workings in the Breccia.
Third Quarter 2018 Results and Webcast
The Company will host a conference call / webcast to discuss the
results at 8:00 am on Friday
26 October 2018 (Melbourne, Australian Eastern Daylight Time) /
5:00 pm on Thursday 25 October 2018 (Toronto, Eastern Daylight Time).
Webcast Participants
To register, please copy and paste the link below into your
browser:
https://event.on24.com/wcc/r/1851535/81DFE850EAFAE9BDAD6A00D4AE87C30E
Teleconference Participants (required for those
who wish to ask questions)
Local (toll free) dial in numbers are:
Australia: 1 800 076 068
New Zealand: 0 800 453 421
Canada & North America: 1 888 390 0546
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.
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 since 1990 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.
The Company expects to produce 515,000 to 545,000 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, sovereign risks,
risk of suspension 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 because 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 because 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