/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. 20, 2020 /CNW/ - OceanaGold Corporation
(TSX: OGC) (ASX: OGC) (the "Company") reported its full
year 2019 financial and operational results for the year ended
31 December 2019. This follows the
release of the Company's operational results on 29 January 2020. 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
- Full year 2019 consolidated production of 470,601 ounces of
gold and 10,255 tonnes of copper, including 108,151 ounces of gold
produced in the fourth quarter, an increase of nearly 20% from the
previous quarter with strong production from Haile and
Macraes.
- Full year 2019 All-in Sustaining Costs ("AISC") of $1,061 per ounce and fourth quarter AISC of
$980 per ounce, a decrease of 13%
from the previous quarter on improved cash costs.
- YTD operating cash flow of $204.3
million, including $46.7
million in the fourth quarter – an increase of 44% over the
previous quarter.
- Immediately available liquidity of $99.0
million, including $49.0
million of cash on hand and $50
million in undrawn credit facilities; amended $200 million Revolving Credit facility by
extending tenure to December 31,
2021.
- Full year revenue of $651.2
million including fourth quarter revenue of $152.1 million.
- Full year Earnings before Interest, Depreciation and
Amortisation ("EBITDA") of $214.2
million, net profit of $14.5
million, and adjusted net profit (after income tax and
before gain/loss on fair value of undesignated hedges and
impairment) of $32.1 million.
- Fourth quarter EBITDA of $45.2
million, net profit of $8.7
million, and adjusted net earnings (after income tax and
before gain/loss on fair value of undesignated hedges and
impairment) of negative $0.7
million.
- Subsequent to quarter end, the Company announced increased
mineral resources at the Martha Underground including 824 koz in
Indicated Resources and 614 koz in Inferred Resources.
- FTAA renewal re-endorsed to the Office of the President in
December. No definitive timeline on a decision by the Office of the
President or a resumption of operations at Didipio.
Mick Wilkes, President and CEO of
OceanaGold said, "Our United States and New Zealand operations delivered a strong
fourth quarter to close out 2019. Haile continued its improvement
throughout the year and we expect this to continue in 2020 with an
approximate 25% increase in production and lower AISC relative to
the previous year. In New Zealand,
Macraes reported improved production and steady cash flow
generation for the year. We expect much of the same from the
Macraes as we advance opportunities to extend the mine life of the
operation. At Waihi, the Correnso underground operations are
winding down with cessation of mining in the main areas this
quarter ahead of narrow vein mining for the remainder of the
year."
"Development of the Martha Underground continues to advance well
with first gold production expected in the second quarter of 2021.
Exploration at Martha Underground continued to be successful in
2019 with increased resources reported and with further investments
planned, we seek to convert more resources and steadily increase
the resource base over the coming years. The Waihi District Study
is underway with a target completion date in the second quarter of
2020. This study is expected to highlight the opportunities that
exist in the district."
"We continue to work closely with the Philippine national
government on the FTAA renewal process. We are also grateful and
encouraged by the support we have among Didipio and adjacent host
communities and the 1,500 employees impacted by the suspension of
operations."
Table 1 – Production and Cost Results Summary
|
|
|
|
|
|
|
Quarter ended 31
Dec 2019
|
|
Haile
|
Didipio
|
Waihi
|
Macraes
|
Consolidated
|
Q4
2019
|
Q3
2019
|
Gold
Produced
|
koz
|
46.4
|
0.4
|
15.8
|
45.5
|
108.2
|
107.5
|
Gold Sales
|
koz
|
42.3
|
-
|
18.6
|
46.4
|
107.3
|
94.3
|
Average Gold
Price
|
US$/oz
|
1,479
|
-
|
1,474
|
1,485
|
1,404 (1)
|
1,414
(1)
|
Copper
Produced
|
kt
|
-
|
0.1
|
-
|
-
|
0.1
|
2.3
|
Copper
Sales
|
kt
|
-
|
-
|
-
|
-
|
-
|
-
|
Average Copper
Price
|
US$/lb
|
-
|
-
|
-
|
-
|
-
|
-
|
Total Ore
Mined
|
kt
|
1,365
|
-
|
100
|
1,841
|
3,306
|
2,057
|
Tonnes
Processed
|
kt
|
863
|
23
|
97
|
1,465
|
2,449
|
3,026
|
Gold Grade
Processed
|
g/t
|
2.09
|
0.67
|
5.82
|
1.18
|
1.59
|
1.34
|
Gold
Recovery
|
%
|
80.0
|
89.9
|
86.7
|
81.6
|
86.4
|
82.4
|
Cash Costs
|
US$/oz
|
772
|
-
|
646
|
788
|
757
|
828
|
All-In Sustaining
Costs
|
US$/oz
|
1,014
|
-
|
746
|
1,043
|
980
|
1,122
|
Full Year
2019
|
|
Haile
|
Didipio
|
Waihi
|
Macraes
|
Consolidated
|
2019
|
2018
|
Gold
Produced
|
koz
|
146.1
|
83.9
|
68.1
|
172.5
|
470.6
|
533.3
|
Gold Sales
|
koz
|
143.3
|
60.2
|
69.2
|
175.8
|
448.4
|
532.7
|
Average Gold
Price
|
US$/oz
|
1,409
|
1,385
|
1,392
|
1,391
|
1,360 (1)
|
1,268
(1)
|
Copper
Produced
|
kt
|
-
|
10.3
|
-
|
-
|
10.3
|
15.0
|
Copper
Sales
|
kt
|
-
|
6.9
|
-
|
-
|
6.9
|
14.5
|
Average Copper
Price
|
US$/lb
|
-
|
2.85
|
-
|
-
|
2.84
|
3.05
|
Total Ore
Mined
|
kt
|
3,217
|
1,173
|
433
|
6,456
|
11,280
|
10,518
|
Tonnes
processed
|
kt
|
3,204
|
2,656
|
435
|
5,917
|
12,212
|
12,219
|
Gold grade
processed
|
g/t
|
1.80
|
1.11
|
5.61
|
1.10
|
1.42
|
1.59
|
Recovery
|
%
|
78.6
|
88.3
|
86.6
|
82.5
|
84.4
|
86.0
|
Cash Costs
|
US$/oz
|
859
|
481
|
682
|
736
|
733
|
489
|
All-In Sustaining
Costs
|
US$/oz
|
1,262
|
694
|
826
|
1,115
|
1,061
|
767
|
(1)
|
Realised gains and
losses on gold hedging are included in the consolidated average
gold price.
|
Table 2 – Financial Summary
Quarter ended 31
December 2019
(US$m)
|
Q4
31 Dec
2019
|
Q3
30 Sep
2019
|
Q4
31 Dec
2018
|
2019
(4)
|
2018
(1)
|
Revenue
|
152.1
|
133.6
|
183.3
|
651.2
|
772.5
|
Cost of sales,
excluding depreciation and amortization
|
(81.5)
|
(78.4)
|
(95.3)
|
(360.6)
|
(355.5)
|
General and
administration – other (5)
|
(22.4)
|
(19.2)
|
(12.7)
|
(65.1)
|
(47.9)
|
General and
administration – indirect taxes (2)
|
(3.4)
|
(1.2)
|
(3.1)
|
(11.9)
|
(12.0)
|
Foreign currency
exchange gain/(loss)
|
0.2
|
0.3
|
0.6
|
0.5
|
3.1
|
Other
income/(expense)
|
0.2
|
(1.2)
|
0.9
|
0.1
|
3.5
|
EBITDA (excluding
gain/(loss) on undesignated hedges and
impairment charge)
|
45.2
|
33.9
|
73.7
|
214.2
|
363.7
|
Depreciation and
amortization
|
(50.1)
|
(36.4)
|
(45.3)
|
(168.6)
|
(191.0)
|
Net interest expense
and finance costs
|
(3.0)
|
(3.1)
|
(2.8)
|
(13.2)
|
(14.2)
|
Earnings/(loss)
before income tax (excluding gain/(loss) on
undesignated hedges and impairment charge)
|
(7.9)
|
(5.6)
|
25.6
|
32.4
|
158.5
|
Income tax benefit
/(expense) on earnings
|
7.2
|
0.3
|
(8.2)
|
(0.3)
|
(34.5)
|
Earnings/(loss)
after income tax and before gain/(loss) on
undesignated hedges and impairment charge
|
(0.7)
|
(5.3)
|
17.4
|
32.1
|
124.1
|
Write off deferred
exploration expenditure / investment
(3)
|
(4.0)
|
-
|
(1.2)
|
(8.6)
|
(4.2)
|
Gain/(loss) on fair
value of undesignated hedges
|
18.6
|
(23.0)
|
(5.9)
|
(12.5)
|
1.5
|
Tax (expense) /
benefit on gain/loss on undesignated hedges
|
(5.2)
|
6.4
|
0.6
|
3.5
|
0.4
|
Share of loss from
equity accounted associates
|
(0.1)
|
-
|
(0.1)
|
(0.1)
|
(0.3)
|
Net
Profit/(loss)
|
8.7
|
(21.9)
|
10.9
|
14.5
|
121.7
|
Basic earnings per
share
|
$0.01
|
$(0.04)
|
$0.02
|
$0.02
|
$0.20
|
Diluted earnings per
share
|
$0.01
|
$(0.04)
|
$0.02
|
$0.02
|
$0.19
|
|
|
(1)
|
The Company's
consolidated financial results for the 2018 year reflected
adjustments on IFRS 15 adoption from January 1,
2018.
|
(2)
|
Represents
indirect taxes in the Philippines specifically excise tax (expensed
as from April 1, 2018), local business and property taxes. This
value is included in the Company's AISC calculation as from January
1, 2019 in accordance with the World Gold Council's updated
methodology.
|
(3)
|
In the fourth
quarter, the Company recognised the write-off of deferred
exploration related costs related to the earn-in joint venture of
the Tuscarorara project in Nevada following agreement termination,
Reefton rehabilitation costs and obsolete stock at
Didipio following a review of all slow-moving warehouse inventory.
This followed the previous write-off of deferred exploration
related costs for the La Curva and Claudia projects due to the
Company's termination of agreement with Mirasol Resources
Ltd.
|
(4)
|
The Company's
consolidated financial results for the 2019 year reflected
adjustments on IFRS 16 adoption from January 1,
2019.
|
(5)
|
The Company did
not record any revenue or cost of sales from the Didipio mine
during the second half of 2019. In addition, General and
Administration - other, includes non-production costs related to
maintaining Didipio operational readiness of $10.1 million in the
fourth quarter and $17.7 million for the full year
2019.
|
Table 3 – Cash Flow Summary
Quarter ended 31 December 2019 (US$m)
|
Q4
31 Dec
2019
|
Q3
30 Sep
2019
|
Q4
31 Dec
2018
|
2019
|
2018
|
Cash flows from
Operating Activities
|
46.7
|
32.4
|
95.8
|
204.3
|
346.2
|
Cash flows used in
Investing Activities
|
(51.4)
|
(54.3)
|
(51.2)
|
(239.7)
|
(229.0)
|
Cash flows used in
Financing Activities
|
(4.3)
|
(4.0)
|
(3.3)
|
(21.0)
|
(79.3)
|
Operations
For the year ended December 31,
2019, the Company produced 470,601 ounces of gold and 10,255
tonnes of copper including 108,151 ounces of gold and 68 tonnes of
copper in the fourth quarter. Quarter-on-quarter gold production
was nearly 20% higher for the United
States and New Zealand
operations relative to the previous quarter.
Full year consolidated cash costs were $733 per ounce on sales of 448,430 ounces of
gold, including fourth quarter cash costs of $757 per ounce on sales of 107,330 ounces of
gold. Quarter-on-quarter cash costs decreased 9% on improved
productivity at Haile on mining and processing. AISC were
$1,061 per ounce sold for the full
year, an increase of 38% over the prior year primarily due to lower
gold sales, particularly at Didipio where no sales were transacted
in the second half of the year. Fourth quarter AISC was
$980 per ounce sold, a decrease of
13% on the previous quarter due to lower cost of sales. Second half
gold and copper production from Didipio remains in inventory and
available for sale.
As previously announced, the Company suspended underground
mining operations at Didipio in mid-July and ore processing in
October due to depletion of consumables required for sustained
operations. Mining and processing activities were suspended
due to restrictions on material movements imposed by the local
government unit's blockade. As a result, the Company did not
transact any gold or copper sales from Didipio in the second half
of the year.
The Company notes that despite the various government orders
issued during the reporting period, subsequently there has been no
material action to report on these matters. Moreover, the FTAA
renewal remains with the Office of the President with no definitive
timeline provided for a decision. Given this, the Company concludes
that there is an increased risk that resolution to the above
matter(s) may take longer than previously anticipated, and
therefore it will consider all potential options to maximise value
from the asset. This includes consideration and assessment of
possible divestment opportunities should they arise, if they are
aligned to the Company's broader strategic objectives. While not
currently quantifiable, the Company acknowledges that some such
offers, subject to their timing and nature, may potentially be at a
discount to the assumed future value of the project based on a
resumption of normal operations.
At Haile, the operation delivered its fourth consecutive quarter
of operational improvements. For the year ended December 31, 2019, the Haile operation produced
146,131 ounces of gold including 46,420 ounces in the fourth
quarter. Quarter-on-quarter production increased 26% driven
primarily by higher grades from lower benches of Snake Phase 1.
Fourth quarter AISC improved to $1,014 per ounce, or 8% quarter-on-quarter due to
improved mining and milling efficiencies and higher gold sales.
Haile's 2019 AISC also included approximately $57 per ounce in corporate allocations.
Macraes produced 172,475 ounces of gold in 2019, down 22% from
the same period in 2018 reflecting mine sequencing whereby mining
took place in areas of lower grades, as expected.
Quarter-on-quarter production of 45,505 ounces of gold increased
20% as the operation began accessing higher grade ore in Coronation
Stage 5 in the fourth quarter. Production at Waihi was relatively
flat quarter-over-quarter and decreased 18% over the prior year
consistent with the mine plan.
Financial
In the year ended December 31,
2019, the Company generated $651.2
million in revenue including $152.1
million in the fourth quarter. Full year revenue decreased
16% from 2018 primarily due to lower sales volumes as no sales from
Didipio in the second half, partially offset by a 7% higher average
gold price received relative to 2018 and increased sales volumes
from Haile, which completed its second full year of commercial
production.
Quarter-on-quarter revenue increased 14% to $152.1 million on increased sales volume from
New Zealand and a higher average
gold price received, partially offset by the absence of sales from
Didipio. Full year EBITDA was $214.2
million while fourth quarter EBITDA was $45.2 million, both of which were also negatively
impacted by the absence of sales from Didipio and the
non-production costs related to maintaining operational readiness
at Didipio of $10.1 million in the
fourth quarter and $17.7 million for
the full year 2019. EBITDA in the fourth quarter was also
impacted by the expensing of approximately $3.4 million of Philippines production taxes paid in a prior
period.
Full year 2019 net profit after income tax and before unrealized
losses on undesignated hedges and impairment charge was
$32.1 million or $0.05 per share on a fully diluted basis. This
result was impacted by the lower EBITDA, partially offset by lower
depreciation and amortisation charges as compared to the prior
year. Fourth quarter net loss after income tax and before
unrealized losses on undesignated hedges and impairment charge was
$0.7 million or $0.00 per share on a fully diluted basis,
primarily due to higher depreciation and amortization costs
quarter-on-quarter and non-production costs to maintain operational
readiness at Didipio recorded during the quarter.
Annual operating cash flows were $204.3
million while fourth quarter operating cash flows were
$46.7 million, a 41% decrease from
the prior year and 44% increase from the previous quarter. The
year-over-year decrease is a result of an absence of sales from
Didipio in the second half of the year, and the quarter-on-quarter
increase reflects increased gold sales from Macraes during the
quarter. Cash flows used in investing activities decreased on the
previous quarter due to reduced growth capital at Haile.
As of December 31, 2019, the
Company's cash balance stood at $49.0
million, excluding $37.0
million held in equity investments. Total liquidity was
$99.0 million while net debt was
$179.4 million.
Growth
At Waihi, the Company progressed development of the Martha
Underground with completion of 1,300 metres of mine development in
the fourth quarter, and the project is on-track for first
production in the second quarter of 2021. Subsequent to year-end,
the Company announced an upgrade to the Martha Underground resource
through a combination of infill and extensional drilling, including
an increase to both ounces of gold and average grade of both
Indicated and Inferred resource categories. Indicated resources
increased by 150% over the prior year, totalling 824,000 ounces of
gold and underpinning the project's ten-year mine life. The Company
expects to complete the Waihi District Study, a preliminary
economic assessment-level study, in the second quarter of
2020.
At Haile, the Company completed construction of the pre-aeration
thickener to support grind size optimisation through the new
circuit. Post completion of the thickener installation and further
optimisation of the regrinding circuit, the Company is targeting
higher steady-state recoveries at average throughput rates of
approximately 3.6 to 3.7 million tonnes per annum. The Company also
continues to enhance open pit operations by accelerating mining
activities and achieving productivity improvements, including
bringing forward mining of two open pits in 2020, both previously
scheduled for mining in 2021. With enhancement of open pit
operations ongoing, the Company is also evaluating an opportunity
to optimise the Horseshoe Underground Mine and potentially defer
the project to 2021.
At Macraes, the Company continues to advance organic growth
opportunities, including the Golden Point target and the
underground study which is expected to be completed in the second
half of 2020. Investment in exploration with drilling
activities across multiple targets within the Macraes Goldfield and
further mine planning is underway.
Conference Call
The Company will release its financial and operational results
for the fourth quarter and full year ending 31 December 2019 before the TSX market open on
Thursday February 20, 2020
(Toronto, Canada time). The
results will be posted on OceanaGold's website at
www.oceanagold.com
The Company will host a conference call / webcast to discuss the
results at 8:30 am on Friday February 21,
2020 (Melbourne, Australia
Time) / 4:30 pm on Thursday February 20,
2020 (Toronto, Canada
time).
Webcast Participants
To register, please copy and paste the link below into your
browser:
https://event.on24.com/wcc/r/2176515/C9CEED65CE90A57B28C14F899D74EC51
Teleconference Participants (required for those who wish
to ask questions)
Local (toll free) dial in numbers are:
Canada & North America: 1 888 390 0546
Australia: 1 800 076 068
New Zealand: 0 800 453 421
United Kingdom: 0 800 652
2435
Switzerland: 0 800 312 635
All other countries (toll): + 1 416 764 8688
Playback of Webcast
A recording will be available for viewing on the Company's
website following the webcast.
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.
In 2019, the Company produced 470,601 ounces of gold and 10,255
tonnes of copper at All-In Sustaining Costs of $1,061 per ounce sold. For 2020, the Company
expects to produce between 360,000 and 380,000 ounces of gold from
Haile, Waihi and Macraes combined at a consolidated All-In
Sustaining Costs ranging from $1,075
to $1,125 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