Oceanagold Announces Macraes MINE Life Extension to 2028 and Initial Mineral Reserves at Golden Point Underground
MEDIA RELEASE
10 September 2020
OCEANAGOLD ANNOUNCES MACRAES MINE LIFE EXTENSION TO 2028 AND
INITIAL MINERAL RESERVES AT GOLDEN POINT UNDERGROUND
(All financial figures in US Dollars unless otherwise stated)
(BRISBANE) OceanaGold Corporation (TSX: OGC ) (ASX: OGC ) (the “Company”) is today pleased to
announce an extension to the mine life at the Macraes operation located on the South Island of New Zealand
as well as to announce initial Mineral Reserves and Mineral Resources for the Golden Point Underground ,
including the results of the recently completed Golden Point Underground Pre-feasibility Study. A new National
Instrument 43-101 Technical Report (“Technical Report”) for Macraes will be filed on SEDAR and with the
Australian Securities Exchange within 45 days.
Note that all Macraes Technical Report forecasts are based on Mineral Reserves only.
Key Highlights
• Macraes life of mine (“LOM”) extended to 2028.
• Before-tax net present value (“NPV”) (5% discount rate) of approximately US$430 million.
• After-tax NPV5% of approximately US$325 million.
• Frasers Underground extended to 2022; Golden Point Underground first production expected in 2021.
• Initial Golden Point Proven & Probable Reserves of 160,000 gold ounces, Measured &
Indicated Resources of 260,000 gold ounces and Inferred Resources of 80,000 gold
ounces.
• Macraes total Mineral Reserves increased by 240,000 gold ounces, net of mine
depletion (as at June 30, 2020).
Michael Holmes, President and CEO of OceanaGold said, “Macraes continues to be the mine that keeps on
giving. After nearly 30 years of operation, we are very pleased to announce that the Macraes life of mine will
extend to at least 2028 with the inclusion of Golden Point Underground along with new open pit opportunities
such as those at Deepdell.”
“We are also pleased to announce an increase to Mineral Reserves at Macraes. The increase , net of mine
depletion as of June 30, 2020, of 240,000 Proved and Probable gold ounces includes our initial R eserve at
Golden Point Underground of 160,000 ounces. The initial Inferred Resource at Golden Point Underground
stands at 80,000 ounces. We continue to drill extensively at Golden Point and other targets along the 35 -
kilometre long Hyde-Macraes shear zone and the results of this drilling will be included in a subsequent update
at year-end.”
2
“The mine life of the Frasers Underground has now been extended to 2022 and will be replaced by the Golden
Point Underground, which we expect to start producing in 2021. Frasers Underground commenced production
in 2008 with an initial mine life of six years. Over the past twelve years, the Company has maintained a short
mine-life at Frasers Underground, drilling ahead of the mine face and successfully replenishing Reserves year-
on-year. Our expectation is to operate the Golden Point Underground in a similar manner while targeting year-
on-year mine life extensions.”
“The updated Macraes Technical Report demonstrating an after-tax NPV of approximately $325 million based
on Reserves, together with the progress at Waihi , makes for a n economically robust New Zealan d business
that we expect will generate significant free cash flows while still retaining considerable exploration potential.
Exploration will remain a strategic focus for us as we continue to invest in our organic growth opportunities in
New Zealand.”
“New Zealand is a top -tier mining jurisdiction, in which we’ve successfully operated for almost 30 years. We
are very excited to advance our New Zealand opportunities and create significant value for shareholders and
socio-economic benefits for local stakeholders on both the South and North Islands.”
Updated Mineral Reserves and Resources
As at June 30, 2020, the Company increased Macraes Proven and Probable Mineral Reserves by 240,000
ounces of gold, net of mine depletion inclusive of Golden Point’s initial Mineral Reserves of 160,000 ounces
of gold.
Table 1 – Proven & Probable Mineral Reserves (June 30, 2020)
JUNE 2020
Proven Probable Proven & Probable
Cut-off Mt g/t Moz Mt g/t Moz Mt g/t Moz
Coronation North 0.4 g/t 0.98 1.39 0.04 1.23 0.92 0.04 2.21 1.13 0.08
Coronation 0.4 g/t - - - 0.22 1.10 0.01 0.22 1.10 0.01
Deepdell 0.4 g/t 1.67 1.06 0.06 1.29 0.98 0.04 2.96 1.03 0.10
Round Hill 0.4 g/t 3.89 1.32 0.17 8.21 1.00 0.26 12.1 1.10 0.43
Innes Mills 0.4 g/t 1.73 1.26 0.07 5.81 0.84 0.16 7.51 0.94 0.23
Frasers OP 0.4 g/t 1.52 0.69 0.03 6.89 0.71 0.16 8.41 0.71 0.19
Stockpiles 0.4 g/t 4.36 0.55 0.08 - - - 4.36 0.55 0.08
Frasers UG 1.36 g/t 0.69 2.11 0.05 0.58 1.47 0.03 1.28 1.82 0.07
Golden Point UG 1.61 g/t 0.12 2.39 0.01 2.26 2.12 0.15 2.34 2.13 0.16
Macraes Total 15.0 1.05 0.51 26.5 0.99 0.84 41.4 1.01 1.35
Notes:
• Gold price assumptions for deriving Reserves are USD1,300/oz for open pit and USD1,500/oz for underground , at an exchange rate of 0. 71
NZD:USD.
• All figures are rounded to reflect the relative accuracy of the estimates. Totals may not sum due to rounding.
• Mineral reserves are reported based on cut-off grades that are based on metal price assumptions, exchange rates and mining, processing, general
and administrative costs.
• JORC 2012 and CIM Definition Standards were followed for Mineral Reserves.
3
Table 2 – Measured & Indicated Resources (June 30, 2020)
JUNE 2020
Measured Indicated Measured & Indicated
Mt g/t Moz Mt g/t Moz Mt g/t Moz
Open Pit 24.7 0.99 0.79 90.7 0.77 2.2 115 0.82 3.0
Underground 1.62 2.91 0.15 4.56 2.48 0.36 6.18 2.60 0.52
Macraes Total 26.3 1.11 0.94 95.2 0.85 2.6 122 0.91 3.6
Notes:
• Open pit cut-offs range between 0.3 g/t and 0.4 g/t Au. Frasers underground and Golden Point underground reported at 1.2 g/t and 1.34 g/t Au
respectively. All cut-offs based upon a gold price of US$1,700/oz and an exchange rate of 0.71 NZD:USD.
• Open pit resources are reported within shells optimized using a gold price of US$1,700/oz
• Mineral Resources reported include the Mineral Reserves reported for the same deposit.
• There is no certainty that Mineral Resources that are not Mineral Reserves will be converted to Mineral Reserves.
• No dilution is included in the reported figures and no allowances have been made for mining recoveries or processing losses.
• The tabulated resources are estimates of metal contained as troy ounces of gold.
• JORC 2012 and CIM Definition Standards were followed for Mineral Resources.
For Golden Point Underground, the Company has announced an initial Measured and Indicated Resource of
260,000 ounces of gold along with an initial Inferred Resource of 80,000 ounces. Note that approximately half
of the Golden Point underground resource was previously included in the Round Hill open pit resource which
has now been excised from the Round Hill open pit resource.
Table 3 – Inferred Mineral Resources (June 30, 2020)
JUNE 2020
Inferred Resources
Mt g/t Moz
Open Pit 40 0.69 0.9
Underground 1.3 2.4 0.1
Macraes Total 42 0.74 1.0
Notes:
• Open pit cut-offs range between 0.3 g/t and 0.4 g/t Au. Frasers underground and Golden Point underground reported at 1.2 g/t and 1.34 g/t Au
respectively. All cut-offs based upon a gold price of US$1,700/oz and an exchange rate of 0.71 NZD:USD.
• Open pit resources are reported within shells optimized using a gold price of US$1,700/oz
• There is no certainty that Mineral Resources that are not Mineral Reserves will be converted to Mineral Reserves.
• No dilution is included in the reported figures and no allowances have been made for mining recoveries or processing losses.
• The tabulated resources are estimates of metal contained as troy ounces of gold.
• JORC 2012 and CIM Definition Standards were followed for Mineral Resources.
The Company continues to focus on resource conversion and expansion on multiple surface and underground
targets within the Macraes Goldfield. The Company will incorporate results of this drill ing in the year-end
Resource and Reserve update.
Operating Physicals
The Macraes mine life has been extended from 2021 to 2028, reflecting mine life increases to the Frasers
Underground, inclusion of the Golden Point Underground and addition al surface opportunities including new
cut-backs at the Gay -Tan, Innes Mills and Deepdell open pits. Forecast a nnual production is averag ing
approximately 150,000 ounces of gold between 2021 and 2027.
Over the life of mine, the Company expects to produce approximately 1.11 million ounces of gold at an AISC
of $1,025 per ounce from July 1, 2020. The average AISC from 2021 to 2028 is forecast at $990 per ounce .
The costs are based on historic operating costs and sustaining capital expenditures. The mine schedule is
based on and includes only Reserves from July 1, 2020.
4
Table 4 – LOM Unit Operating Cost Summary
Mining Unit Costs Units USD
Open Pit per tonne total material mined 1.27
Frasers Underground per tonne ore mined 43.63
Golden Point Underground per tonne ore mined 37.04
Processing per tonne milled 7.16
Site General & Administrative per tonne milled 1.96
Figure 1 – LOM Production & Cost Profile
Capital Expenditure
The development of Golden Point Underground is expected to commence late in 2020 with portal development
within the Golden Point open pit. First production from Golden Point U nderground is expected in 2021 with
total estimated development capital of approximately $15 million over the next two years.
Life of mine sustaining capital including general operating, pre -stripping and capitalised underground mining
investment, is expected to average approximately $35 million to $45 million a year, which is similar to historical
annual expenditures.
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
2021 2022 2023 2024 2025 2026 2027 2028
Costs (per oz)
Production (oz)
Open Pits Frasers UG Golden Point UG Cash Costs AISC
5
Figure 2 – Capital Expenditure Profile
Economics
Based on a 5% discount rate, an average gold price of $1,540 per ounce, an exchange rate of 0.65 NZD:USD
and on mineral Reserves only, the before -tax NPV is approximately $430 million while the after-tax NPV is
approximately $32 5 million. The undiscounted after-tax life of mine free cash flow is calculated at
approximately $420 million.
All drill data in relation to the information presented in this release can be found on the Company’s website at
https://oceanagold.com/investor-centre/tsx-asx-filings/. In line with ASX listing requirements, OceanaGold has
appended information required by JORC Table 1 for the Macraes drill results, and Resources and Reserves
estimates to its ASX announcement. JORC Table 1 is not required under National Instrument 43-101. Readers
are referred to the ASX website at www.asx.com.au or the OceanaGold website at www.oceanagold.com to
view JORC Table 1.
- ENDS -
Authorised for release to market by OceanaGold Corporate Company Secretary, Liang Tang.
For further information please contact:
Investor Relations Media Relations
Sam Pazuki
Tel: +1 720 602 4880
Melissa Bowerman
Tel: +61 407 783 270
www.oceanagold.com | Twitter: @OceanaGold
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
2021 2022 2023 2024 2025 2026 2027 2028
USD '000
Sustaining Capital Exploration Growth Capital
6
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. 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. The Company’s assets also encompass the Didipio Gold -
Copper Mine located on the island of Luzon in the Philippines. 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.
Qualified Persons and Scientific and Technical Information
The Mineral Resource estimate included in this press release has been prepared under the supervision of S.
Doyle. Any information regarding metallurgy or mineral processing has been prepared, verified and approved
by D. Carr. The open pit Mineral Reserves have been prepared under the supervision of P. Doelman and the
underground Mineral Reserves have been verified and approved by T. Cooney. The cost estimation and
economic evaluation has been prepared under the supervision of P. Doelman. Each of S. Doyle, D. Carr and
P. Doelman are Qualified Persons un der NI 43 -101. All other scientific or technical information has been
prepared, reviewed and approved by P. Doelman.
Messrs Doelman and Doyle are full-time employees of the Company’s subsidiary, OceanaGold (New Zealand)
Limited while Messrs Carr and Cooney full-time employee of the Company’s subsidiary, OceanaGold
Management Pty Limited. Accordingly, each is not independent for purposes of NI 43-101.
Messrs Carr, Cooney, Doelman and Doyle are each Members and Chartered Professio nals with the
Australasian Institute of Mining and Metallurgy.
Messrs Carr, Cooney, Doelman and Doyle have reviewed and approved the scientific and technical information
in this press release in respect of which each is responsible and each consents to inclusion in this public
release of the matters based on their information in the form and context in which it appears.
Cautionary Statement for Public Release
Certain information contained in this public release may be deemed “forward -looking” within the m eaning 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, achievement of guidance, 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 "inten ds", or
7
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 vari ety 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 outbreak of an infectious disease, the accuracy of minera l 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.
This press release also contains references to estimates of Mineral Resources and Mineral Reserves. The
estimation of Mineral Resources and Mineral Reserves is inherently uncertain and involves subjective
judgments about man y relevant factors. Mineral Resources that are not Mineral Reserves do not have
demonstrated economic viability. The accuracy of any such estimates is a function of the quantity and quality
of available data, and of the assumptions made and judgments used in engineering and geological
interpretation which may prove to be unreliable and depend, to a certain extent, upon the analysis of drilling
results and statistical inferences that may ultimately prove to be inaccurate. Mineral Resource or Mineral
Reserve estimates may have to be re -estimated based on: (i) fluctuations in gold price; (ii) results of drilling,
(iii) the results of metallurgical testing and other studies, including their subsequent refinement and updating;
(iv) proposed mining operations, including dilution; (v) the evaluation of mine plans subsequent to the date of
any estimates; (vi) changes in mining or other costs, and (vii) the possible failure to receive required permits,
approvals and licenses or changes to existing mining licences.
As well, all of the economic results of studies included in this press release constitute forward -looking
information or statements, including NPV of approximately $325 million; updated LOM extended to 2028; AISC
of approximately $1,025 per ounce; and undiscounted LOM after tax free cash flow of $422 million.
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 statem ents 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.
NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES AND NOT FOR DISTRIBUTION
TO US NEWSWIRE SERVICES.