/NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES AND NOT FOR DISTRIBUTION TO
US NEWSWIRE SERVICES./
MELBOURNE, Feb. 27, 2020 /CNW/ - OceanaGold Corporation
(TSX: OGC) (ASX: OGC) (the "Company") is pleased to announce
that it has entered into a forward gold sale arrangement with the
support of members of the Company's current banking group whereby
the Company will receive a pre-payment of $78.5 million (approximately $1,635 per ounce) on February 28, 2020, in exchange for delivering
48,000 gold ounces between September and December 2020. The advanced gold ounces sold
represents just over 30% of expected gold production across that
period and 13% of the Company's total 2020 full year
production.
Mick Wilkes, President and CEO of
OceanaGold said, "We expect our annual gold production to be
stronger in the second half of the year, particularly at Haile
where we expect two-thirds of the gold output from the operation in
the second half of the year. The presale of future gold production
more effectively aligns our second half weighted 2020 operating
cash flow profile with the short-term requirement to continue
advancing key organic growth projects within our portfolio such as
the Martha Underground project and Haile expansion whilst also
managing the ongoing uncertainty around Didipio."
"While we do not anticipate utilising gold prepayment
arrangements as a standard practice going forward, it is an
attractive option at today's high gold prices that mitigates the
need for any material refinance of debt or equity issuance. We will
continue to take prudent steps that ensure our operating cash flow
matches and supports the critical timelines associated with our
growth projects."
The cash consideration for the advanced gold sale will be
treated as deferred revenue to be amortised, and the revenue
recognised, when the physical deliveries of gold occur. The cash
consideration will be included in operating cash flow for the first
quarter of 2020. The Company effected the gold advanced sales
arrangement through Scotia Bank, Commonwealth Bank, Citibank
and BNP Paribas.
Additionally, on February 26,
2020, the Company sold 39,946,161 common shares it
previously held in Gold Standard Ventures Corp ("GSV"),
which has its head office at Suite 610, 815 West Hastings Street,
Vancouver, BC V6C1B4, for
C$0.82 per share, for aggregate gross
proceeds of approximately C$32.7
million. The sale took place through a private off-market
sale via a block transaction.
Prior to such sale, the Company indirectly owned and controlled
40,459,161 common shares of GSV, being approximately 14.6% of the
outstanding common shares. Following such sale, the Company
indirectly owns and controls 513,000 common shares of GSV, being
0.2% of the outstanding common shares.
The proceeds from the sale will be used for working capital
purposes to better align cash flows of the business with
expenditures. The Company may, depending on the market and other
conditions, increase or decrease its beneficial ownership of the
GSV securities, whether in the open market, by privately negotiated
agreements or otherwise, subject to a number of factors, including
general market conditions and other available investment and
business opportunities.
Authorised for release to market by OceanaGold Corporate Company
Secretary, Liang Tang.
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.
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.
About GSV Share Sale
The disclosure in this press release relating to the sale of
common shares of GSV is issued pursuant to Multilateral Instrument
62-104, which also requires an early warning report to be filed
containing additional information with respect to the foregoing
matters. A copy of the early warning report will be available on
SEDAR under GSV's issuer profile at www.sedar.com and may be
obtained upon request from the Company by contacting the Company at
the below contract information.
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.
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SOURCE OceanaGold Corporation