Oceanagold Announces Record Revenue and Net Profit FOR 2016; Declares Dividend
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MEDIA RELEASE
23 February 2017
OCEANAGOLD ANNOUNCES RECORD REVENUE AND NET PROFIT FOR 2016;
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 6 financial and operational results for the year ended 31 December 201 6. This follows the
Company’s release of its operational results on 30 January 20 17. 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
Achieved record full year revenue of $628.6 million and net profit of $136.5 million.
Reported quarterly revenue of $147.4 million and net profit of $42.6 million in the fourth quarter.
Achieved EBITDA of $283.6 million for the full year and $66.9 million for the fourth quarter.
Declared semi -annual dividend of $0.01 per common share or CDI to shareholders, reflecting
continued strong performance.
Maintained strong balance sheet with immediate liquidity of $96.1 million including $68.9 million in
cash.
Achieved full year gold production guidance range with 416,741 ounces of gold produced and slightly
exceeded the top end of the copper guidance range with 21,123 tonnes produced .
Reported consolidated full year All -In Sustaining Costs of $708 per ounce an d cash costs of $452
per ounce on sales of 437,146 ounces of gold and 21,413 tonnes of copper.
Subsequent to the quarter end, signed a letter of intent to enter into a joint venture with Mirasol
Resources Ltd, which owns the La Curva Gold Project in Argentina.
Mick Wilkes, President and CEO said, “ OceanaGold achieved strong financial results from our portfolio of
high quality assets in 2016. With growth in production and higher margins expected in 2017, we are further
strengthening our financial results and balance sheet. On the back of these results, the Board of Directors is
pleased to declare a semi -annual ordinary dividend of $0.01 per share .” He added, “We expect this year to
unlock significant growth opportunities in the business particularly in New Zealand and the United States .
Commissioning of Haile continues to advance well and we expect to announce commercial production early
in the second quarter. We will continue to create value through exploration supported by a larger exploration
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spend in New Zealand and the United States . We will also complete studies for the potential expansion of
Haile and the exciting Martha project at Waihi.”
Table 1 – Production and Cost Results Summary
Didipio Waihi Macraes
and Reefton Consolidated
Fourth Quarter 2016 Results Q4 2016 Q3 2016
Gold Produced ounces 30,695 29,280 42,453 102,428 88,975
Copper Produced tonnes 3,765 - - 3,765 5,114
Gold Sales ounces 35,260 27,665 42,733 105,658 98,195
Copper Sales tonnes 4,960 - - 4,960 5,596
Cash Costs $ per ounce (120) 427 743 372 529
2016 Results 2016 20151
Gold Produced ounces 147,150 116,028 153,563 416,741 419,153
Copper Produced tonnes 21,123 - - 21,123 23,109
Gold Sales ounces 149,663 116,169 171,314 437,146 401,350
Copper Sales tonnes 21,413 - - 21,413 22,764
Cash Costs $ per ounce 1 473 832 452 458
All-In Sustaining Costs $ per ounce 239 735 1,099 708 709
Notes:
1. includes the actual results for Waihi Gold for the six months ended December 31,2015. This disclosure is for information only, reflecting what the costs
would have been, had the legal close of the Waihi Gold acquisition been on July 1, 2015.
Table 2 – Financial Summary*
$’000
Q4
Dec 31
2016
Q3
Sep 30
2016
Q4
Dec 31
2015
2016 2015
Revenue 147,432 150,388 143,612 628,634 507,985
Cost of sales, excluding depreciation and
amortisation (63,406) (77,524) (71,080) (292,461) (265,058)
General & administration – merger and acquisition - - (1,604) - (8,522)
General & administration** – legal settlement (8,000) - - (8,000) -
General & administration – other (10,203) (11,361) (11,743) (49,497) (36,806)
Foreign currency exchange gain/(loss) (547) (604) (173) 2,117 (2,802)
Other income/(expense) 1,614 669 (1,443) 2,826 (1,309)
Earnings before interest, tax, depreciation and
amortisation (EBITDA) (excluding gain/(loss)
on undesignated hedges)
66,890 61,568 57,569 283,619 193,488
Depreciation and amortisation (28,807) (31,973) (36,164) (122,564) (124,960)
Net interest expense and finance costs (2,112) (2,538) (5,001) (9,376) (12,051)
Earnings before income tax and gain/(loss) on
undesignated hedges 35,971 27,057 16,404 151,679 56,477
Tax (expense) / benefit on earnings (4,318) (2,587) (5,654) (17,711) 461
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Earnings/(loss) after income tax and before
gain/(loss) on undesignated hedges 31,653 24,470 10,750 133,968 56,939
Gain/(loss) on fair value undesignated hedges 15,343 8,852 16,525 4,062 (5,379)
Tax (expense)/benefit on gain/loss on
undesignated hedges (4,296) (2,478) (4,627) (1,137) 1,506
Share of profit/(loss) from equity accounted
associates (126) (151) - (441) -
Net Profit 42,574 30,693 22,648 136,452 53,066
Basic earnings per share $0.07 $0.05 $0.04 $0.22 $0.14
CASH FLOWS
Cash flows from Operating Activities 79,765 29,440 62,152 232,328 171,441
Cash flows used in Investing Activities (120,698) (116,342) (41,008) (463,276) (125,501)
Cash flows from / (used in) Financing Activities 26,116 70,607 120,529 111,583 89,932
Notes:
*: includes results for Romarco Minerals and Waihi Gold from 1 and 30 October 2015 respectively.
**: reflects expensed costs of $8 million following the arbitration ruling against Pacific Rim by the International Centre fo r the Settlement of Investment Disputes.
In 2016, the Company achieved record annual revenue of $628.6 million, which was 24% higher than in the
previous year on account of higher gold sales and an 8% increase in the average gold price received. The
year-on-year increase was partly offset by lower copper sales. Full year EBITDA increased by 46% from the
previous year to $283.6 million driven primarily by stronger revenue, but partially offset by higher mining costs
at the New Zealand operations and higher general and administrative (“G&A”) costs. The higher G&A costs
included a one-off charge of $8.0 million for legal settlement costs related to the El Salvador arbitration ruling
against the Company.
The Company also achieved record annual net profit, which increased by 157% from the previous year due
to higher EBITDA, lower interest costs and gain on the fair value of undesignated hedges. The increase was
partly offset by higher income tax expense.
At the end of 2016, the Company had immediate available liquidity of $96.1 million which included a cash
balance of $68.9 million and $27.2 million available under the $300 million revolving credit facility. During the
fourth quarter, the Company drew down $30.0 million from its revolving credit facility to fund capital works at
Haile and repaid $3.9 million of capital leases.
Dividend
In 2015, the OceanaGold Board of Directors (the “Board”) established a dividend policy designed to balance
the competing priorities for the business with a sustainable payment to shareholders while maintaining
prudent gearing. Under this policy, an ordinary dividend of $0.02 per share plus a discretionary payment
would be paid annually. The Board has now resolved to move to a semi -annual dividend that would be
declared following the December and June quarters. Consistent with the dividend policy of a base dividend
of US$0.02 per annum, the Board today has declared a dividend of US$0.01 per common share or CDI.
Shareholders of record at the close of business in each jurisdiction on 7 March 2017 (the “Record Date”) will
be entitled to receive payment of the dividend on 28 April 2017. 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").
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Table 3 – Dividend Key Dates
Date
Last date for processing requests to convert securities between stock
exchanges before the Record Date1 Wednesday, 1 March 2017
Common shares trade on an ex-dividend basis (TSX) Friday, 3 March 2017
CDIs trade on an ex-dividend basis (ASX) Monday, 6 March 2017
Record Date Tuesday, 7 March 2017
Processing recommences for requests to convert securities between
stock exchanges1 Wednesday, 8 March 2017
Dividend Payment Date Friday, 28 April 2017
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.
Other Investments
Subsequent to the year end, the Company signed a letter of intent (LOI) to enter into a joint venture with
Mirasol Resources Ltd., a Canadian exploration company, enabling OceanaGold to acquire up to a maximum
75% interest in the La Curva Gold Project by completing various exploration and financial conditions. The
Project is located in Santa Cruz; a highly prospective gold province in southern Argentina.
Philippines Update
Further to the Company news release dated 14 February 2017, the Department of Environment and Natural
Resources (“DENR”) Order remains under appeal with the Office of the President in the Philippines . The
Didipio mine continues to operate without interruption.
2016 Full Year Results Webcast
The Company will host a conference call / webcast to discuss the results at 8:30am on Friday 2 4 February
2017 (Melbourne, Australia time) / 4:30pm on Thursday 23 February 2017 (Toronto, Canada time).
Webcast Participants
To register, please copy and paste the link below into your browser:
http://event.on24.com/r.htm?e=1349552&s=1&k=3A9B5447E56F208E102F5CD308EF4EBC
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
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
1 March 2017, will be deferred until after the Record Date of 7 March 2017.
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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 a few
hours after the completion of the webcast.
- ENDS -
For further information please contact:
Investor Relations
Sam Pazuki
Tel: +1 416 915 3123
Jeffrey Sansom
Tel: +61 3 9656 5300
Media Relations
Jill Thomas
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 its flagship operation,
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 Unite d States, the Company is currently
commissioning the Haile Gold Mine, a top -tier asset located in South Carolina along the Carolina Terrane.
The Company expects the Haile Gold Mine to commence commercial production early in the second quarter
of 2017. 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 2 6 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 valued stakeholders to identify and invest in social programs that are
designed to build capacity and not dependency.
In 2017, the Company expects to produce 550,000 to 610,000 ounces of gold and 15,000 to 17,000 tonnes
of copper with sector leading All-In Sustaining Costs that range from $600 to $650 per ounce sold.
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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 b y the Company to be an
"eligible dividend" pursuant to subsection 89(14) of the Income Tax Act (Canada) and corresponding
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 Canada, 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
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 will 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 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 r isks 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 as sumptions, 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
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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.