Oceanagold Provides Corporate Update
MEDIA RELEASE
28 August 2020
OCEANAGOLD PROVIDES CORPORATE UPDATE
(All financial figures in US Dollars unless otherwise stated)
(BRISBANE) OceanaGold Corporation (TSX: OGC ) (ASX: OGC ) (the “Company”) wishes to provide a
corporate update regarding the continued efforts to manage near -term risks associated with the COVID -19
global pandemic, associated impacts on production guidance and a general operational update.
Michael Holmes , President and CEO of OceanaGold said, “ We continue to manage the near -term risks
presented by the COVID -19 global pandemic to our business while we work diligently to deliver on our
commitments and advance our exciting organic growth opportunities. The health and wellbeing of our
workforce is always our top priority which is why we implemented stringent protocols at each of our operations.
These protocols include a rigorous health screening process upon entry to the mine site, physical distancing,
staggered shifts, continuous disinfecting of common use areas and mandatory self-isolation of suspected or
confirmed cases.”
“These measures have been in place since the beginning of March and up until June, the Company had no
positive cases of COVID-19. Since June, Haile has had 18 positive cases and approximately 220 workers have
been required to self-isolate for a two-week period at some point since the beginning of March. These protocols
while essential, have adversely impacted staffing levels at Haile . Given the continued fluid situation in the
United States regarding COVID-19, combined with productivity losses due to weather, the outlook at Haile for
the remainder of the year is now uncertain. We are behind schedule on our targeted mining advance rates,
which is delaying access to the higher-grade zones of the open pits necessary to achieve the significantly
higher production levels expected in the latter months of the year.”
“To that end, we have revisited our near-term mine plan for Haile to better understand what is achievable in
the current work environment. As such, w e are now expecting Haile’s 2020 production to range between
135,000 and 175,000 ounces of gold. The wide range represents the high degree of uncertainty we currently
face and the short-term sensitivity the 2020 production plan has to advance rates given the increasing grade
profile.”
“In response to this uncertain outlook and to enhance our balance sheet, we have entered into a new forward
gold sale arrangement with members of our existing bank group. Under the new arrangement, the Company
will receive a pre-payment of approximately US$77 million, in exchange for delivering of 40,000 ounces of gold
in the second quarter of 2021, representing approximately 10% of next year’s expected gold output excluding
any contribution from Didipio . This recognises the change in the timing of operating cash flow and provides
additional liquidity to continue to manage the near -term risks of COVID-19 while continuing development of
Martha Underground ahead of first production in the second quarter of 2021.”
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“OceanaGold is a solid mid -tier gold producer with one of the premier growth pipelines in the gold mining
industry. We continue to advance the Waihi District opportunities which are planned to deliver the largest
organic growth in OceanaGold’s 30-year history. In addition to Waihi, we continue to advance the Golden Point
underground study which we anticipate completing this quarter and demonstrate a meaningful mine life
extension at Macraes. We also expect to commence development of the Horseshoe undergroun d in 2021
providing access to a high-grade underground feed source at Haile. These opportunities are expected to create
significant value for shareholders.”
Operations
In New Zealand, the operations were impacted by a five -week government shutdown in April with Macraes
limited to processing stockpiles to maintain the autoclave in a safe and operable state. At the end of July, the
Company announced that despite a strong r ebound in mining activit y at Macraes in May and June, the
operation would not be able to make up for the shortfall in mining this year and some production originally
expected in the fourth quarter would shift into 2021. As a result, the Company announced at the end of July
that is has reduced Macraes 2020 p roduction guidance range to between 140,000 and 150,000 ounces of
gold.
In the United States, the Haile operation’s strict protocols also include the mandatory self -isolation of workers
who exhibit COVID-19 symptoms, have tested positive for the virus, and/or have come in contact with someone
who has exhibited symptoms or has tested positive for the virus. Since the beginning of March, approximately
220 workers have had to self-isolate at some point, including 50 since the end of June. The operation had no
positive cases of COVID-19 until June and since June, 18 workers have tested positive for the virus and three
additional workers are currently in isolation as presumptive positive cases. Despite these cases, the Company
continues to be COVID-19 free at site through its rigorous safety protocols and contact tracing process.
As noted several times throughout the year, Haile’s full year production is significantly weighted to the second
half of the year due to mine sequencing whereby grades increase materially as the year progresses. This mine
plan is predicated on moving a significant amount of material to access the higher-grade ore zones which are
expected to be mined in the latter months o f the year. These months are expected to deliver significant
production levels.
With the ongoing challenges presented by COVID-19, which has and continues to adversely impact staffing
levels combined with delays in access ing some areas of the open pit in the first half of the year due to loss
production from weather, the outlook for the operation is now uncertain. As a result, the Company is revising
Haile’s production guidance to account for these ongoing challenges impact ing the operation’s ability to
achieve the mining rates required to access the high-grade zones in the timeframe previously anticipated.
The Company now expects Haile to produc e between 135,000 ounces and 175,000 ounces of gold at a site
All-In Sustaining Cost (“AISC”) ranging between $1,100 and $1,400 per ounce sold. The Company wishes to
note that the resource model remains strongly intact with reconciliation at or above expectations. As such, any
high-grade zones previously expected to be accessed in 2020 would be delayed to subsequent quarters.
With this revision , along with the previously announced revision to the Macraes outlook, t he Company now
expects full year consolidated production of between 295,000 and 345,000 ounce s of gold at an AISC range
between $1,150 and $1,250 per ounce sold.
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This revised outlook is based on the Company’s best efforts to estimate the ongoing impacts of the COVID-19
global pandemic.
Liquidity
In response to the revised 2020 outlook, the Company has entered into a new forward gold sale arrangement
with Citibank, BNP Paribas and the Commonwealth Bank of Australia . Under the new arrangement, the
Company will receive a pre -payment of approximately US$77 million on August 28, 2020, in exchange for
delivering 40,000 ounces of gold between April and June 2021. The amount of gold presold is expected to
represent approximately 10% of the expected full year production for 2021, excluding any potential ounces
produced from Didipio.
The cash consideration for the advanced gold sale will be treated as deferred revenue to be amortised and
the revenue recognised when the physical delivers occur. The cash consideration will be included in operating
cash flow for the third quarter of 202 0. Prior to inclusion of the $77 million gold pre -sale proceeds, the
Company’s current cash position is approximately $105 million.
The existing 48,000 ounce forward gold sale executed in February and due for delivery will be completed as
scheduled between September and December 2020.
The Company will continue to manage its balance sheet in a prudent manner to ensure sufficient liquidity to
address near-term risks associated with the COVID -19 global pandemic and ensure continued investment in
organic growth projects, particularly Martha Underground and WKP on the optimal timelines.
Growth
Despite the five-week temporary cessation of development at Martha Underground, the Company continues
to expect first production in the second quarter of 2021 . The Company continues to advance the other
opportunities within the Waihi District through the permitting phase and recently announced receip t of the
mining permit for the WKP Hauraki tenement. Exploration drilling continues at both Martha Underground and
WKP with a focus on resource conversion and extension.
The Company continues to advance the Golden Point Underground study to completion this quarter. The
Golden Point Underground is expected to replace the Frasers Underground and along with additional open pit
opportunities, extend the mine life of Macraes. The release of this study in the form of an updated Macraes
National Instrument 43 -101 Technical Report (“NI 43 -101”) will exclude Inferred resources however, it will
include an initial resource for Golden Point Underground.
At Haile, the Company expects to complete the Horseshoe underground optimisation before the end of the
year and deliver an updated NI 43 -101. The updated Technical Report will include any new details on
Horseshoe but will also include an updated mine plan for the overall Haile operation.
Didipio
The Company continues to engage with the Philippine National Government on advancing the renewal of the
FTAA which is currently with the Office of the President pending a decision . The Company has not been
provided any timeline on when a decision will be made on the renewal.
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Since mid-April, the Company has temporarily laid-off approximately 500 workers and is required to either re-
instate or terminate the workers effective mid-October. The Company will be required to provide notices to the
workforce of its intent in mid-September.
The Company was encouraged by positive tangible actions taken by the Government earlier this year along
with re-endorsement of the FTAA renewal by government agencies to the Office of the President for a decision.
The Company also recognises the ongoing challenges the Government has faced in managing the COVID-19
pandemic. The Company continues to recognise and appreciate the significant support demonstrated by
thousands of local residents in the provinces of Nueva Vizcaya and Quirino and the vocal support from local
unions, cooperatives and organisations for the FTAA renewal and the Company as their responsible mining
company of choice.
- 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
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 has a strong social license to operate and work s
collaboratively with its valued stakeholders to identify and invest in social programs that are designed to build
capacity and not dependency.
For 2020, and subject to the cautionary statement below, the Company expects to produce between 295,000
and 345,000 ounces of gold from Haile, Waihi and Macraes combined at a consolidated All-In Sustaining Costs
ranging from $1,150 to $1,250 per ounce sold.
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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, achievement of guidance, executio n
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 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 d isease, 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 a vailable 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 statements. Accordingly, readers should not place undue reliance on forwar d-
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 applica ble securities laws. The information contained in this release is not
investment or financial product advice.
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