Oceanagold Announces 2018 Guidance
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MEDIA RELEASE
1 February 2018
OCEANAGOLD ANNOUNCES 2018 GUIDANCE
(All financial figures in US Dollars unless otherwise stated)
(MELBOURNE) 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 Ha ile
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 f or 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, m aintenance 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 expansi on, 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.
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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 i ncrease 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 outli ned 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 operati on 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 lo wer-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 contin ues mill feed will increase, whereby at the end of 2019, when construction is
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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. Th is
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.”
- ENDS -
For further information please contact:
Investor Relations
Sam Pazuki
Tel: +1 416 915 3123
Jeffrey Sansom
Tel: +61 3 9656 5300
[email protected] | www.oceanagold.com | Twitter: @OceanaGold
About OceanaGold
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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 Zeala nd, 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 va lued 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 forw ard-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, amo ng 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. According ly, 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 informatio n, events or otherwise, except as
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required by applicable securities laws. The information contained in this release is not investment or financial
product advice.
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