Oceanagold Announces Record Net Profit and Revenue; Declares Dividend
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MEDIA RELEASE
22 February 2018
OCEANAGOLD ANNOUNCES RECORD NET PROFIT AND REVENUE; DECLARES
DIVIDEND
(All financial figures in US Dollars unless otherwise stated)
(MELBOURNE) OceanaGold Corporation (TSX/ASX: OGC) (the “Company”) is pleased to release its full
year 201 7 financial and operational results for the year ended 31 December 201 7. This follows the
Company’s release of its operational results on 18 January 201 8. 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
Record full year net profit of $172 million including a record quarterly net profit of $89 million.
Record full year revenue of $724 million including a record quarterly revenue of $246 million.
EBITDA of $408 million for the full year including $149 million in the fourth quarter.
Net debt reduced by $88 million in the fourth quarter with debt repayments amounting to $78 million.
Total liquidity increased to $103 million including an increase in the cash balance from $61 million to
$73 million.
Second semi-annual dividend for 2017 of $0.01 per share paid in the fourth quarter.
Subsequent to year-end, declared the first semi-annual dividend for 2018 of $0.01 per share payable
in April 2018.
Continued successful exploration results achieved at Waihi.
Mick Wilkes, President and CEO said, “ I’m pleased to report another strong year of financial results with a
record net profit and revenue that were underpinned by a record year for production at sector leading margins.
The fourth quarter delivered significant results for the Company including Haile which contributed strongly on
the back of a solid operational performance where the process plant achieved throughput rates higher than
nameplate and recoveries averaging 83%.” He added, “On the back of the significant cash flow generation
from our suite of high-quality assets, the Company continued to strengthen its balance sheet. In the fourth
quarter alone, we increased our cash balance from $61 million to $73 million while reducing our revolving
credit facility from $273 million to $200 million.”
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“In 2017, OceanaGold delivered sector leading EBITDA margin of 56% while achieving a return on
investment capital of 10% which marked the eighth straight year of positive returns; one of only two gold
companies to do so.”
“We are well positioned to continue to deliver strong margins and returns to shareholders in 2018. The solid
cash flow generation expected from the business provides us with financial flexibility and allows us to
continue reducing debt, returning wealth to shareholders in the form of dividends and reinvest in the business’
organic growth opportunities including the Haile expansion and Waihi mine life extension. We have a robust
business that has been deliberately set up to deliver long-term value in almost any gold commodity price
environment.”
Table 1 – Production and Cost Results Summary
Haile Didipio Waihi Macraes Consolidated
Fourth Quarter 2017 Results Q4 2017 Q3 2017
Gold Produced Ounces 50,134 39,256 31,761 45,060 166,211 136,043
Copper Produced Tonnes – 3,687 – – 3,687 4,387
Gold Sales Ounces 49,265 43,345 30,054 45,922 168,586 131,071
Copper Sales Tonnes – 4,842 – – 4,842 3,273
Cash Costs $ per ounce 272 (72) 436 593 300 416
All-In Sustaining Costs
(1)
$ per ounce 509 155 680 933 564 748
Full Year 2017 Results (2) 2017 2016
Gold Produced Ounces 118,466 176,790 119,084 160,266 574,606 416,741
Copper Produced Tonnes – 18,351 – – 18,351 21,123
Gold Sales Ounces 109,532 167,653 117,721 160,726 555,632 437,146
Copper Sales Tonnes – 18,091 – – 18,091 21,413
Cash Costs $ per ounce 272 (92) 471 737 347 452
All-In Sustaining Costs
(1)
$ per ounce 509 70 759 1,115 617 708
Notes:
1. AISC for Haile, and the consolidated group, includes only the period post declaration of commencement of commercial operations
at Haile (effective from October 1, 2017). In the nine months to September 30, 2017, all Haile revenue and costs were capitalised.
2. Full year 2017 consolidated gold production and sales reflect full year production and sales volumes from Haile.
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Table 2 – Financial Summary
Note: For the nine months ended September 30, 2017, all revenue and costs reported do not include the Haile operations as the se have been capitalised
as commercial production was declared effective from October 1, 2017.
For the full year, the Company achieved record annual revenue of $724 million, which was 15% higher than
in the previous year due mainly to increased gold sales and slight increase in the gold price year -on-year.
EBITDA for the year increased by 47% from the p revious year to $408 million driven primarily by stronger
revenues and lower costs.
The Company also achieved a record annual net profit of $172 million, which was 26% higher than the
previous year even despite a non -cash impairment of $18 million taken in the second quarter related to the
El Salvador business.
$’000
Q4
Dec 31
2017
Q3
Sep 30
2017
Q4
Dec 31
2016
2017 2016
Revenue 246,113 144,849 147,432 724,413 628,634
Cost of sales, excluding depreciation and
amortization (85,316) (59,490) (63,406) (275,407) (292,461)
General & administration* – legal settlement - - - - (8,000)
General & administration – other (12,772) (13,429) (8,000) (49,663) (49,497)
Foreign currency exchange gain/(loss) 239 201 (10,203) 866 2,117
Gain on sale of available-for-sale assets - - (547) 5,314 -
Other income/(expense) 339 1,268 1,614 2,896 2,826
Earnings before interest, tax, depreciation
and amortisation (EBITDA) (excluding
gain/(loss) on undesignated hedges and
impairment charge)
148,603 73,399 66,890 408,419 283,619
Depreciation and amortization (60,405) (44,372) (28,807) (192,352) (122,564)
Net interest expense and finance costs (3,978) (4,296) (2,112) (17,123) (9,376)
Earnings before income tax and gain/(loss)
on undesignated hedges and impairment
charge
84,220 24,731 35,971 198,944 151,679
Income tax (expense) / benefit on earnings 9,535 (3,314) (4,318) 364 (17,711)
Earnings after income tax and before
gain/(loss) on undesignated hedges and
impairment charge
93,755 21,417 31,653 199,308 133,968
Impairment charge - - - (17,654) -
Gain/(loss) on fair value of undesignated
hedges (5,847) 611 15,343 (12,035) 4,062
Tax (expense)/benefit on gain/loss on
undesignated hedges 861 (171) (4,296) 2,593 (1,137)
Share of profit/(loss) from equity accounted
associates (132) (111) (126) (469) (441)
Net Profit 88,637 21,746 42,574 171,743 136,452
Basic earnings per share $0.14 $0.04 $0.07 $0.28 $0.22
CASH FLOWS
Cash flows from Operating Activities 178,842 38,169 79,765 357,650 232,328
Cash flows used in Investing Activities (74,502) (50,495) (120,698) (262,603) (463,276)
Cash flows (used in) / from Financing Activities (79,684) (13,676) 26,116 (89,450) 111,583
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In the fourth quarter, the Company achieved a record quarterly revenue of $246 million with an EBITDA of
$149 million and a record net profit of $89 million.
At the end of 2017, the Company had immediate available liquidity of $103 million which included a cash
balance of $73 million, a 20% increase from the previous quarter. In the fourth quarter, the Company repaid
$73 million of its revolving credit facility reducing it to $200 million. As a result, net debt decreased by $88
million in the fourth quarter.
Dividend
In the fourth quarter, the Company paid the second semi -annual ordinary dividend for 2017 of $0.01 per
share for aggregate net proceeds of $12 million for the full year. Subsequent to the year end, the OceanaGold
Board of Directors declared the first semi-annual ordinary dividend for 2018 of $0.01 per share.
Shareholders of record at the close of business in each jurisdiction on 8 March 2018 (the “Record Date”) will
be entitled to receive payment of the dividend on 27 April 2018. The dividend payment applies to holders of
record of the Company’s common shares traded on the Toronto Stock Exchange and holders of CHESS
depository interests traded on the Australian Securities Exchange ("CDIs").
Table 3 – Dividend Key Dates
Date
Last date for processing requests to convert securities between stock
exchanges before the Record Date1 Monday, 5 March 2018
Shares trade on an ex-dividend basis Tuesday, 6 March 2018
Record Date Thursday, 8 March 2018
Processing recommences for requests to convert securities between
stock exchanges1 Friday, 9 March 2018
Dividend Payment Date Friday, 27 April 2018
This year, at the election of the security holder, the Company will pay the dividend in US Dollars, Australian
Dollars, New Zealand Dollars or British Pounds Sterling for ASX listed CDIs, and US Dollars, Canadian
Dollars or British Pounds Sterling for TSX listed common shares. Please refer to the end of this media release
for important information relating to Australian income tax and Canadian withholding tax.
Growth
The Company continues to advance its organic growth opportunities, mainly at Haile and Waihi. At Haile, the
Company is making prudent investments in process plant infrastructure such as the installation of a pebble
crusher and additional regrinding capacity as part of the ramp-up of throughput rates to 4 million tonnes per
annum and enhanced recoveries. Permitting of the Horseshoe underground mine, expanded open pit mines
and additional mine infrastructure is expected to commence in the second quarter of 2018.
1 The Company will seek and expects to be granted a temporary waiver of the relevant ASX Settlement Operating Rules.
Under the waiver, the processing of transfers of Common Shares and CDIs between stock exchanges, lodged on or after
5 March 2018, will be deferred until after the Record Date of 8 March 2018.
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At Waihi, the Company continues to advance the Martha Project, initiating the permitting process at the end
of the first quarter of 2018. Drilling of the Martha underground target is being undertaken from two
underground drill drives. Over 7,950 metres of diamond drilling was completed in 2017 with positive results
supporting the targeted objective of increasing the mine life of the Waihi operation by 10 years. The Company
will provide further updates on the Martha Project as the 2018 drill program, including 32,000m on the Martha
underground target, is executed and our understanding progresses.
Development of panel two of the underground at Didipio continues to progress well and is expected to be
completed by the end of 2019. The primary wate r pumping station for the underground is in commissioning
and once commissioned, the underground mining rates are expected to steadily increase.
Subsequent to the year end, the Company maintained its pro-rata equity share of 15.7% in Gold Standard
Ventures following a private placement early in the new year, and its equity of 16.2% in Nu Legacy Gold. The
Company continues to support its strategic investments as well as its more recent joint ventures in Argentina
where it has completed an initial diamond drill program on the La Curva Project.
Full Year Results and Webcast
The Company will release its financial and operational results for the fourth quarter and full year ending 31
December 2017 before the TSX market open on Thursday 22 February 2018 (Toronto, Canada time) / after
market close on Thursday February 22, 2018 (Melbourne, Australian Eastern Standard Daylight 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 23,
2018 (Melbourne, Australia time) / 4:30 pm on Thursday February 22, 2018 (Toronto, Canada time).
Webcast Participants
To register, please copy and paste the link below into your browser:
https://event.on24.com/wcc/r/1584080/D7F74FF71B7866EBDD89C79EEF6878B9
Teleconference Participants (required for those who wish to ask questions)
Local (toll free) dial in numbers are:
Australia: 1 800 076 068
New Zealand: 0 800 453 421
Canada & North America: 1 888 390 0546
All other countries (toll): + 1 416 764 8688
Playback of Webcast
If you are unable to attend the call, a recording will be available for viewing on the Company’s website.
- ENDS -
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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
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 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 oper ate
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, 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.
Tax Information for Dividend
Australian Income Tax
For Australian income tax purposes, the dividend is unfranked and there is no amount of Conduit Foreign
Income per security for this dividend payment.
Canadian Withholding Tax
Holders of Common Shares or CDIs are advised that this dividend is designated by the Company to be an
"eligible dividend" pursuant to subsection 89(14) of the Income Tax Act (Canada) and correspondi ng
provincial legislation. As the dividend originates from Canada, withholding tax at the rate of 25% will be
deducted from dividends paid to non-Canadian residents unless the shareholder or CDI holder is a resident
of a country with a tax treaty with Cana da, in which event a lower withholding rate may apply. Such
shareholders or CDI holders must certify their non-resident status by completing the relevant forms required
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by the Canada Revenue Agency. The Company will mail every holder further information following the Record
Date.
Information contained in this media release is based on the directors' current expectations and may be
subject to change. If any of the dates should change, the revised dates wil l be announced by media release
and will be available from www.oceanagold.com.
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 opera tions, 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 event s 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 reasonabl e
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 intent ion 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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