Oceanagold Announces 2019 Production and Cost Guidance
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MEDIA RELEASE
4 February 2019
OCEANAGOLD ANNOUNCES 2019 PRODUCTION AND COST GUIDANCE
(MELBOURNE) OceanaGold Corporation ( TSX: OGC | ASX: OGC) (the “Company”) is pleased to provide
its 2019 full year production and cost guidance. Additionally, the Company has provided details related to its
capital investment program for the year.
Key Highlights
• Continued s trong production levels at 500 ,000 ounces to 550,000 ounces of gold and 14,000 to
15,000 tonnes of copper at AISC of $850 to $900 per ounce of gold sold;
• Increased mining and milling tonnes at Haile as part of the planned expansion of the operation to
over 200,000 ounces per annum by 2022. Permitting of the expansion of Haile is on track;
• Advancing permits and continued resource drilling and engineering studies for the Martha
Underground Project at Waihi to extend mine life;
• Continued investment in Macraes through exploration and mining to extend mine life further ;
• Global exploration spend of $40 million to $50 million in 2019 to increase reserves across all
operations, advance the potential new discovery at WKP , and invest in new exploration J oint
Ventures in the Americas.
Mick Wilkes, President and CEO said, “ This year is expected to be another strong year of production and
development as we continue to invest in the prosperity and growth of the Company . At Haile, we expect
higher production in 2019 on the back of increased mill feed. AISC at Haile are expected to be slightly higher
in 2019 due to lower mill feed grade and higher costs for labour and consumables. Whilst the mine has
experienced difficulties in the past 4 months due to bad weather and a tight US labour market, the operation
is recovering and we have plans in place to mitigate further significant weather events and skill shortages.
Permitting of the larger open pits and the Horseshoe underground is progressing well and will continue in
2019. Following a successful outcome with the permitting process , we would expect production levels to
steadily increase to over 200,000 ounces a year. We also expect unit costs to decrease over the next few
years as mined and milled volumes increase.”
“Both Didipio and Macraes are again expect ing strong production in 2019 , and Waihi will have lower
production as currently permitted mine reserves are depleted. As previously expected AISC at Didipio will be
higher due to lower copper credits and expensing ore stockpiles. In addition, production taxes at Didipio will
be included in the AISC for the first time as per the new World Gold Council guidelines. Macraes AISC will
be slightly higher due to lower grade and higher exploration costs as we invest in extending the mine life
there further, and Waihi will have higher AISC due to lower mined grade.”
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“With the Martha Underground Project permitting near completion, we are expecting to ramp-up underground
development which, subject to approvals, should lead to a return to historical levels of production and costs
plus mine life extension at Waihi . Through investments in exploration, we are also targeting substantial
increases to the resource base while seeking new opportunities such as the potential new discovery at WKP.”
Mr Wilkes went on to say “It is an exciting time for the Gold Mining industry and w e are very pleased with
how we are positioned to continue building shareholder value . Our focus on delivering consistent positive
returns and healthy margins over the long term has been the recipe for our continued success. We have a
strong shareholder register and remain staunchly committed to delivering strong returns to our shareholders
and significant socio-economic benefits to our valued stakeholders across our business.”
Table 1 – 2019 Production and Cost Guidance Summary
Haile Didipio Waihi Macraes Consolidated
Gold Produced koz 145 – 160 120 – 130 60 – 70 175 – 190 500 – 550
Copper Produced kt - 14 – 15 - - 14 – 15
All-In Sustaining Costs US$/oz 850 – 900 625 – 675 875 – 925 1000 – 1050 850 – 900
Table 2 – 2019 Capital Investment Program
USDm Haile Didipio Waihi Macraes Other Consolidated Included in
AISC
General Operating 10 – 15 10 – 15 2 – 3 10 – 15 – 40 – 50 40 – 50
Pre-strip/Capitalised
mining 10 – 15 – 3 – 5 30 – 35 – 45 – 55 45 – 55
Exploration 3 – 5 2 – 3 15 – 20 6 – 8 10 – 15 40 – 50 8 – 10
Growth 55 – 60 35 – 40 15 – 20 1 – 2 3 – 5 110 – 125 –
TOTAL 80 – 95 45 – 55 35 – 50 50 – 60 15 – 20 235 – 280 93 – 105
Note: Table 2 excludes $6m of closure costs at Reefton.
On a consolidated basis, production guidance reflects higher year-on-year production from Haile and Didipio
with lower year -on-year production from the New Zealand operation s including Waihi where hi storical
production levels are expected only following full ramp -up of underground operations at Martha, which is
currently in permitting.
In late 2018, the World Gold Council updated and further detailed its methodology for the calculation of AISC.
Based on this update, the Company reviewed its cost classification and will now include production taxes
paid into its AISC.
Haile
At Haile, following continued debottlenecking activities and higher mill utilisation, the Company expects plant
throughput to increase nearly 35% year -on-year to 3.2 million tonnes . The Company is currently
commissioning the upgraded regrinding circuit , which is designed to achieve finer grind sizes with an
expectation to enhance gold recoveries. The Company continues to improve its understanding of a complex
ore body and w ith these modifications, higher mill feed and process improvements , the Company expects
gold production at Haile to increase by 15% to 20% from 2018 levels.
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For 2019, the Company expects slightly higher costs mainly related to increased mining costs and inflationary
cost pressures in some consumables, steel grinding media and labour. For the next two years, the Company
has engaged a mining contractor to assist with the movement of clay material, which is associated with pre-
stripping of some areas in the Snake, Red Hill, Haile and Ledbetter pits. The Company will also commence
changing its mine fleet to utilise large r haul trucks which is expected to deliver im proved mine productivity.
Upgrading the mining fleet is one component of the planned expansion at Haile and the Company is confident
in achieving better mine and process productivities over time.
In 2019, the Company expects to invest between $55 million and $60 million on the Haile Expansion Project.
In addition to completion of the new fine grinding circuit, m ajor growth capital expenditures include tailings
thickener enhancements, installation of a third cyanide destruct unit, additional areas for storing waste and
low-grade stockpiles and a creek diversion. The process plant expansion is designed to ultimately achieve
throughput rates between 3.5 million and 4.0 million tonnes per year.
Permitting of the larger open pits and the Horseshoe undergro und are expected to continue throughout the
year with construction of the underground mine anticipated to commence in 2020 , subject to receipt of all
approvals.
The Company forecasts Haile gold production to increase to over 200,000 ounces by 2022 when th e
Horseshoe underground is expected to be in production, with AISC decreas ing steadily up to that time as
mining and milling rates steadily increase and the operation matures .
Didipio
Production at Didipio is expected to be slightly higher from 2018 with continued ramp -up of underground
operations which are expected to deliver slightly better gold grades in the second half of the year. In 2019,
the Company expects to mine approximately 1. 2 to 1.3 million tonnes of underground ore and ramping -up
mining rates to 1.6 million tonnes per year commencing in 2020. The Company will continue to supplement
mill feed with low grade open pit stockpiles of which it has approximately 19 million tonnes stored on surface.
Didipio’s AISC guidance range is higher than in previous years mainly related to the continued transition to
underground, the inclusion of production-based taxes in the metric including excise, real property and local
business taxes and lower copper by-product credits. Didipio’s AISC includes a non-cash component related
to the expensing of open pit ore stockpiles processed and this amounts to approximately $125 per ounce in
2019.
Growth capital at Didipio for 2019 is predominately related to the completion of panel two in the underground,
which is expected by the end of the year.
Macraes
At Macraes for 2019, production is expected to decrease from last year due to processing a higher proportion
of lower grade material from Coronation and Frasers pits, which are partly offset by higher grades from
Coronation North and Frasers Underground. The Company is currently reviewing its long -term mine plans
while conducting project studies and investing in exploration with the objective of extending the min e life at
Macraes.
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Investments in sustaining capital including pre -stripping and underground capitalised mining are similar to
previous years.
Waihi
Operations at Waihi will go through a period of transition in 2019 with permitting of the Martha Undergrou nd
well advanced. Mining operations this year will be in lower grade zones within Correnso Deeps and other
nearby veins.
Upon receipt of permits for the Martha Underground, the Company will mobilise to commence stope and
infrastructure development. Upon full ramp-up of mining at Martha Underground, which is expected within 12
to 18 months of receiving the mining permits, production is expected to return to historical levels .
Capital investments at Waihi are predominately related to the Martha Project.
Exploration
In 2019, t he Company will continue to invest in exploration opportunities across the business and through
joint ventures with early stage exploration companies.
At Haile, the exploration program will focus mainly on drill targets within and around the existing deposits.
At Didipio, the exploration focus is predominately on infill and extensional drilling at lower levels of the Didipio
Underground.
At Macraes, the Company expects to invest between $7 million and $10 million in exploration associated with
potential mine life extensions along the 3 2-kilometre Hyde-Macraes Shear Zone including Golden Point,
which forms the basis for a potential standalone underground mining operation.
At Waihi, the Company will complete the 800-RL drill drive and invest $10 million to $12 million on continued
drilling of the Martha Underground targets with the expectation of significantly increasing the resource base
at Waihi. In addition, the Company has allocated $8 million to $10 million for drilling at WKP and other regional
targets north of Waihi.
For the exploration joint ventures in the Americas, the Company has allocated $6 million to $8 million.
- ENDS -
For further information please contact:
Investor Relations Media Relations
Sam Pazuki
Tel: +1 416 915 3123
Melissa Bowerman
Tel: +61 459 900 099
[email protected] [email protected]
www.oceanagold.com | Twitter: @OceanaGold
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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 Phil ippines. 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 op en 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 continues to strive for 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, t he Company produced 533.3k ounces of gold and 15.0k tonnes of copper with All -In Sustaining
Costs of $767 per ounce on gold sales of 532.7k ounces and copper sales of 14.5k tonnes. In 2019, the
Company expects to produce between 500,000 to 550,000 ounces of gold and 14,000 to 1 5,000 tonnes of
copper at All-In Sustaining Costs ranging between $850 and $900 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 informati on 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 alw ays, 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 rec ent 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
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facing the Company, some of which are b eyond 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, wheth er 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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