Oceanagold Announces Robust Financial Results; Declares Dividend
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MEDIA RELEASE
26 July 2018
OCEANAGOLD ANNOUNCES ROBUST FINANCIAL RESULTS; DECLARES
DIVIDEND
(All financial figures in US Dollars unless otherwise stated)
(MELBOURNE) OceanaGold Corporation (TSX: OGC) (ASX: OGC) (the “Company”) is pleased to release
its financial and operational results for the first half and second quarter ended 30 June 2018. Copies of the
consolidated financial statements and the Management Discussion and Analys is (“MD&A”) are available on
the Company’s website at www.oceanagold.com
Key Highlights
• Net profit after tax of $89.1 million in the first half, an increase of 45% compared to the same period
in 2017.
• Cash balance increased 45% quarter-on-quarter to $128.9 million with immediate liquidity of $148.9
million as at 30 June 2018.
• Declared a semi-annual dividend of $0.02 per common share and CHESS Depository Interests
(CDIs).
• Revenue of $402.4 million in the first half of 2018, an increase of 21% compared to the same period
in 2017.
• Second quarter revenue of $205.7 million with EBITDA of $1 09.7 million and net profit after tax of
$44.6 million.
• First half consolidated All-In Sustaining Costs of $744 per ounce on sales of 266,421 ounces of gold
and 7,172 tonnes of copper.
• Second quarter consolidated All-In Sustaining Costs of $696 per ounce on sales of 138,948 ounces
of gold and 3,979 tonnes of copper.
• First half of 2018 consolidated production of 268,597 ounces of gold an d 7,808 tonnes of copper,
including 142,950 ounces of gold and 3,919 tonnes of copper in the second quarter.
• Amended Revolving Credit Facility by extending the tenure to 2020, revising financial covenants and
reducing average margin.
Mick Wilkes, President and CEO said, “ OceanaGold has delivered robust operati ng and financial
performance in the first half of 2018 with each of our operations delivering impressive results that we expect
to continue for the remainder of the year. Over the past 12 months we have increased our cash balance by
nearly 60% and cut our net debt by almost half, which reflects the strength of our assets. We continue to
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deliver one of the highest EBITDA margins in the sector while maintaining consistent, solid returns on
invested capital.”
“With our operations delivering strong performance, our exploration program achieving significant results and
our organic growth o pportunities including the Mart ha Project at Waihi and the Haile expansion all
progressing well, OceanaGold is well positioned to continue delivering positive results , robust operating
margins and profits, and meaningful returns to shareholders.”
“As a result of our continued business strength, t he Board of Directors is also pleased to declare a dividend
of $0.02 per share, which also reflects continued confidence in our business going forward.”
Table 1 – Production and Cost Results Summary
Quarter ended 30 Jun 2018 Haile Didipio Waihi Macraes
Consolidated
Q2 2018 Q2 2017
Gold Produced koz. 38.6 33.1 20.8 50.4 143.0 124.4
Gold Sales koz. 42.9 27.9 19.9 48.2 138.9 129.8
Average Gold Price US$/oz. 1,300 1,260 1,301 1,302 1,293 1,262
Copper Produced kt. - 3.9 - - 3.9 4.3
Copper Sales kt. - 4.0 - - 4.0 5.8
Average Copper Price US$/lb. - 3.12 - - 3.12 2.45
Cash Costs US$/oz. 276 214 697 535 414 399
All-In Sustaining Costs US$/oz. 573 365 885 920 696 681
Year to date 30 Jun 2018 Haile Didipio Waihi Macraes
Consolidated
YTD 2018 YTD 2017
Gold Produced koz. 75.7 58.8 39.3 94.8 268.6 272.4
Gold Sales koz. 75.5 59.5 40.9 90.5 266.4 256.0
Average Gold Price US$/oz. 1,315 1,317 1,314 1,315 1,315 1,244
Copper Produced kt. - 7.8 - - 7.8 10.3
Copper Sales kt. - 7.2 - - 7.2 10.0
Average Copper Price US$/lb. - 3.06 - - 3.06 2.57
Cash Costs US$/oz. 365 167 680 595 445 351
All-In Sustaining Costs US$/oz. 737 294 854 1,002 744 599
Table 2 – Financial Summary
Quarter ended 30 Jun 2018
(US$m)
Q2
Jun 30 2018
Q1
Mar 31 2018(1)
Q2
Mar 31 2017(2)
YTD
Jun 30 2018
YTD
Jun 30 2017
Revenue 205.7 196.7 171.7 402.4 333.5
Cost of sales, excluding depreciation and amortisation (83.8) (84.7) (73.8) (168.0) (130.6)
General and administration – other (15.5) (12.3) (14.5) (27.8) (23.5)
Foreign currency exchange gain/(loss) 1.3 0.6 0.7 1.9 0.4
Gain on sale of available-for-sale assets - - - - 5.3
Other income/(expense) 1.5 0.6 0.5 2.1 1. 1
EBITDA (excluding gain/(loss) on undesignated
hedges and impairment charge) 109.7 100.9 84.6 210.6 186.2
Depreciation and amortization (47.7) (51.4) (51.2) (99.1) (87.6)
Net interest expense and finance costs (3.6) (3.8) (4.3) (7.3) (8.8)
Earnings before income tax (excluding gain/(loss)
on undesignated hedges and impairment charge) 58.4 45.8 29.3 104.2 90.0
Income tax (expense) / benefit on earnings (10.7) (7.2) (4.5) (17.9) (5.8)
Earnings after income tax and before gain/(loss)
on undesignated hedges and impairment charge 47.7 38.6 24.8 86.3 84.2
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Impairment charge - - - - (17.7)
Write off deferred exploration expenditure (2.9) - - (2.9) -
Gain/(loss) on fair value of undesignated hedges 0.0 6.0 1.1 6.0 (6.8)
Tax (expense) / benefit on gain/loss on undesignated
hedges (0.1) - (0.3) (0.1) 1.9
Share of loss from equity accounted associates (0.1) (0.1) (0.2) (0.2) (0.3)
Net Profit 44.6 44.5 25.4 89.1 61.4
Basic earnings per share $0.07 $0.07 $0.04 $0.14 $0.10
Diluted earnings per share $0.07 $0.07 $0.04 $0.14 $0.10
(1) The Company’s consolidated financial results for the quarter ended 31 March 2018 reflected adjustments on adoption of IFRS 15
effective from 1 January 2018.
(2) For the six months ended 30 June 2017, all revenue and costs reported did not include the Haile operations as these were
capitalised as commercial production was declared effective from 1 October 2017.
Table 3 – Cash Flow Summary
Quarter ended 30 Jun 2018
(US$m)
Q2
Jun 30 2018
Q1
Mar 31 2018
Q2
Jun 30 2017
YTD
Jun 30 2018
YTD
Jun 30 2017
Cash flows from Operating Activities 109.0 77.1 88.6 186.1 140.9
Cash flows used in Investing Activities (60.0) (59.1) (71.8) (119.1) (137.7)
Cash flows from / (used) in Financing Activities (8.3) (4.4) (6.8) (12.7) 3.8
On 19 June 2018, the Company announced an increase to its 2018 gold production guidance with stronger
operating performance expected at Didipio and Haile. As a result, the Company’s 2018 gold production
guidance range was revised from between 480,000 and 530,000 to a range of 500,000 to 540,000 ounces.
Table 4 – Revised 2018 Production and Cost Guidance
Haile Didipio Waihi Macraes Consolidated
Gold Production Ounces 140,000 – 155,000 95,000 – 105,000 75,000 - 85,000 190,000 – 200,000 500,000 – 540,000
Copper Production Tonnes – 15,000 – 16,000 – – 15,000 – 16,000
All-In Sustaining
Costs (1) US$/ounce $725 – $775 $260 – $310 $750 – $790 $950 – $1,000 $725 – $775
(1) Current 2018 financial year guidance is based on exchange rates of NZD/USD 0.72, average copper price, inclusive of executed
hedges of $3.15 / lb in average for the full year.
On a consolidated basis during the first half of 2018 , the Company produced 268,597 ounces of gold and
7,808 tonnes of copper . This is broadly in -line with the same peri od in 2017 with stronger production at
Macraes and Haile offset ting lower production from Didipio and Waihi. During the second quarter of 2018,
the Company achieved consolidated production of 142,950 ounces of gold and 3,919 tonnes of copper, up
15% compar ed to the same period in 2017 with higher production from Haile and Macraes more than
offsetting lower production at Didipio and Waihi.
Consolidated All-In Sustaining Costs (“AISC”) for the first half of 2018 were $744 per ounce and cash costs
were $445 per ounce on sales of 266,421 ounces of gold and 7,172 tonnes of copper. During the second
quarter of 2018, the Company recorded consolidated AISC of $696 per ounce and cash costs of $414 per
ounce on sales of 138,948 ounces of gold and 3,979 tonnes of copper.
During the first half of 2018, the Company recorded revenue of $ 402.4 million, including revenue of $205.7
million during the second quarter . This is up 21% compared to the first half of 2017 and up 20% compared
to the second quarter of 2017 due to a higher average gold price received and increased sales volumes
driven by stronger production from Haile and Macraes.
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EBITDA for the first half was $210.6 million, including second quarter EBITDA of $109.7 million representing
EBITDA margins of 52.3% in the first half and 53.3% in the second quarter. On an annualized basis r eturn
on invested capital (“ROIC”) in the first half of the year was approximately 10.1%, which continues the trend
of positive quarterly ROIC results dating back to 2010.
At the end of the first half, the Company increased its cash balance by almost 60% to $128.9 million compared
to the first half of 2017 and had t otal immediate available liquidity increased to $1 48.9 million. The cash
balance excludes $61.7 million held in strategic equity investments.
During the second quarter, the Company amended its Revolving Credit Facility, extending the tenure one
year to 2020 while also revising several financial covenants and reducing facility margins. The Company’s
total credit facilities stood at $220 million of which $200 million remained drawn. As at the end of the first half
of 2018, the Company’s net debt position stood at $103.9 million, nearly 50% less than the same period in
2017.
The Company continued to progress the permitting for a targeted 10-year mine life extension at Waihi in New
Zealand. At Haile, the Company is on track to commence permitting of the Horseshoe underground and
expanded open pit early in the third quarter. Expansion of the Haile process plant continues to advance well
with the installation and commissioning of the pebble crusher well advanced . At Didipio, ramp -up of
underground operations and development of panel 2 continue to progress as planned.
As announced in the second quarter, the Company continues to achieve solid exploration results to support
a significant expansion of the Waihi resource designed to support the 10 -year mine life extension.
Additionally, the Company reported significant high-grade intercepts at its regional WKP prospect, which has
the potential to provide an incremental feed and mine life to the Waihi operation above and beyond the
Martha Project.
During the quarter, the Company also entered an agreement with Tasman Mining for the development of the
Blackwater deposit in the South Island of New Zealand.
Dividend
The Company also announces a semi-annual dividend payment of $0.02 per common share or CDI.
Shareholders of record at the close of business in each jurisdiction on 9 August 2018 (the “Record Date”) will
be entitled to receive payment of the dividend on 14 September 2018 . The dividend payment applies to
holders of record of the Company’s common shares traded on the Toronto Stoc k Exchange and holders of
CDIs on the Australian Securities Exchange.
Table 5 – Dividend Key Dates
Milestones Date
Last date for processing requests to convert securities between stock exchanges before the Record Date Monday, 6 August 2018
Common Shares (TSX) trade on an ex-dividend basis Tuesday, 7 August 2018 and
CDIs (ASX) trade on an ex-dividend basis Wednesday, 8 August 2018
Record Date Thursday, 9 August 2018
Processing recommences for requests to convert securities between stock exchanges Friday, 10 August 2018
Dividend Payment Date Friday, 14 September 2018
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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.
Computershare will mail shareholders the relevant materials, and election of payment currency must be made
by 30 August 2018 . Please refer to the end of this media release for important information relating to
Australian income tax and Canadian withholding tax.
Second Quarter 2018 Results and Webcast
The Company will host a conference call / webcast to discuss the results at 7:30 am on Friday 27 July 2018
(Melbourne, Australian Eastern Standard Time) / 5:30 pm on 26 July 2018 (Toronto, Eastern Daylight Time).
Webcast Participants
To register, please copy and paste the link below into your browser:
https://event.on24.com/wcc/r/1785607/E0306E891C1CEB19A2C8F1FA87D63136
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 -
For further information please contact:
Investor Relations Media Relations
Sam Pazuki
Tel: +1 416 915 3123
Melissa Bowerman
Tel: +61 459 900 099
Jeffrey Sansom
Tel: +61 3 9656 5300
[email protected] [email protected]
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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.
The Company has recently increased its 2018 guidance range and now expects to produce 500,000 to
540,000 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 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.
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Cautionary Statement for Public Release
Certain information contained in this public release may be deeme d “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, expectat ions, 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 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,
sovereign risks, risk of suspension 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 because 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. 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 because 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.