Oceanagold Reports First Quarter 2019 Results
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MEDIA RELEASE
29 April 2019
OCEANAGOLD REPORTS FIRST QUARTER 2019 RESULTS
(All financial figures in US Dollars unless otherwise stated)
(MELBOURNE) OceanaGold Corporation (TSX: OGC / ASX: OGC) (the “Company”) reported its first quarter
2019 financial and operational results for the quarter ended March 31, 2019. 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
• Consolidated gold production of 125,681 ounces and copper production of 3,910 tonnes.
• Consolidated All-In Sustaining Costs (“AISC”) of $1,026 per ounce on sales of 121,144 ounces gold
and 3,324 tonnes copper.
• Revenue of $179.5 million with Earnings Before Interest, Depreciation and Amortisation (“EBITDA”)
of $64.4 million and a Net Profit of $12.4 million.
• Cash balance of $86.5 million with total immediately available liquidity of $136.5 million.
• Exploration success continued in New Zealand with initial resource announced at WKP and
increased resource for the Martha Underground Project.
• Upgraded regrinding circuit installed and being commissioned at Haile including the Tower Mill and
IsaMillTM.
• Didipio received four awards at the Global CSR Awards in Malaysia, including top honours for
Environment Excellence and Women Empowerment.
• Consolidated 2019 production and cost guidance maintained.
Mick Wilkes, President and CEO said, “ Our start to the new year consisted of s olid operating and financial
performance from Didipio and Macraes and major steps forward in advancing our organic growth initiatives
particularly at Waihi. It did, however, include continued mining challenges at Haile. With multiple operations,
we were able to achieve good cash flows and a positive return which positions us well for the remainder of
the year.”
“At Haile the first two months of the year were challenging for us with l ow production, productivity and high
costs. For much of the quarter the mine remained saturated following the heavy rainfall experienced in the
fourth quarter and start of the year. Access to higher grades were restricted and pre -stripping the saprolitic
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clay material proved challenging.” He added, “Although the Company mined lower tonnes and grades in the
upper zones of Snake pit than expected, the reconciliation has recently better aligned with our resource
model as we’ve mined lower benches. Improvement plans implemented this year became effective in March
with a considerable improvement to productivity and production.”
“Didipio continues to deliver consistently positive results with strong operating performance and continued
ramp-up of underground operat ions. Didipio maintains its standing as a world -class mining operation with
industry leading safety performance while continuing to receive multiple global accolades for environmental
and social performance.”
“In New Zealand, Macraes had another strong quarter of production and strong margins on the back of strong
head grades from Coronation North. At Waihi, production was lower as expected due mainly to mine
sequencing whereby we are mining lower grade zones of Correnso Deeps and other ve ins.”
“Organic growth initiatives continued to advance well with a focus on the Martha Underground mine planning
and resource drilling, WKP exploration and Golden Point underground study at Macraes. In addition, the
process plant expansion at Haile is on track including the installation and commissioning of the IsaMillTM with
the tie-in taking place successfully in early April.”
Table 1 – Production and Cost Results Summary
Quarter ended 31 Mar 2019 Haile Didipio Waihi Macraes
Consolidated
Q1 2019 Q4 2018
Gold Produced koz 25.7 33.6 15.1 51.2 125.7 126.7
Gold Sales koz 24.8 29.1 15.1 52.2 121.1 132.2
Average Gold Price US$/oz 1,301 1,324 1,300 1,304 1,308 1,239
Copper Produced kt - 3.9 - - 3.9 2.9
Copper Sales kt - 3.3 - - 3.3 3.1
Average Copper Price US$/lb - 3.12 - - 3.12 3.04
Cash Costs US$/oz 1,164 394 767 603 688 563
All-In Sustaining Costs US$/oz 1,787 638 988 892 1,026 814
Table 2 – Financial Summary
Quarter ended 31 Mar 2019
(US$m)
Q1
31 Mar 2019 (4)
Q4
31 Dec 2018
Q1
31 Mar 2018 (1)
Revenue 179.5 183.3 196.7
Cost of sales, excluding depreciation and amortisation (101.0) (95.3) (84.7)
General and administration – other (11.6) (12.7) (10.2)
General and administration – indirect taxes (2) (2.8) (3.1) (2.1)
Foreign currency exchange gain/(loss) (0.2) 0.6 0.6
Other income/(expense) 0.5 0.9 0.6
EBITDA (excluding gain/(loss) on undesignated hedges and impairment
charge) 64.4 73.7 100.9
Depreciation and amortization (40.4) (45.3) (51.4)
Net interest expense and finance costs (3.6) (2.8) (3.8)
Earnings before income tax (excluding gain/(loss) on undesignated
hedges and impairment charge) 20.4 25.6 45.8
Income tax expense on earnings (4.4) (8.2) (7.2)
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Quarter ended 31 Mar 2019
(US$m)
Q1
31 Mar 2019 (4)
Q4
31 Dec 2018
Q1
31 Mar 2018 (1)
Earnings after income tax and before gain/(loss) on undesignated
hedges and impairment charge 16.0 17.4 38.6
Write off deferred exploration expenditure / investment (3) (4.6) (1.2) -
Gain/(loss) on fair value of undesignated hedges 1.4 (5.9) 6.0
Tax (expense) / benefit on gain/loss on undesignated hedges (0.4) 0.6 -
Share of loss from equity accounted associates (0.0) (0.1) (0.1)
Net Profit $12.4 10.9 44.5
Basic earnings per share $0.02 $0.02 $0.07
Diluted earnings per share $0.02 $0.02 $0.07
(1) The Company’s consolidated financial results for the quarter ended March 31, 2018 reflected IFRS 15 adoption from January 1, 2018.
(2) Represents indirect taxes in the Philippines specifically excise tax (expensed as from April 1, 2018), local business and pro perty taxes. This value
is included in the Company’s AISC calculation as from January 1.
(3) Deferred exploration related costs for the La Curva and Claudia projects have been written off in the quarter ended March 31, 2019 following
termination of the agreements with Mirasol Resources Ltd.
(4) The Company’s consolidated financial results for the quarter ended March 31, 201 9 reflected IFRS 16 adoption from January 1, 2019.
Table 3 – Cash Flow Summary
Quarter ended 31 Mar 2019
(US$m)
Q1
31 Mar 2019
Q4
31 Dec 2018
Q1
31 Mar 2018
Cash flows from Operating Activities 39.0 95.8 77.1
Cash flows used in Investing Activities (57.9) (51.2) (59.1)
Cash flows used in Financing Activities (2.6) (3.3) (4.4)
Operations
For the first quarter, the Company produced 125,681 ounces of gold, 3,910 tonnes of copper and 89,280
ounces of silver. Gold production was broadly in -line with the previous quarter and first quarter of 2018.
Quarter-on-quarter increase in production from Didipio was partially offset by decreased production from the
New Zealand operations and Haile.
Consolidated All-In Sustaining Costs (“AISC”) for the first quarter was $1,026 per ounce on sales of 121,144
ounces of gold. The quarter -on-quarter increase in AISC reflects higher costs, particularly mining costs at
Haile, higher total sustaining capital, combined with lower average feed grades and gold sales volumes.
In the first quarter, the Haile operation produced 25,717 ounces of gold, including 12,819 ounces in the month
of March, a 95% improvement on the previous two months. The significant increase in production in March
is a function of improvements made at the mine, significantly better weather, improvements in staffing and
access to higher grade ore zones. For the quarter, the operation mined 3.8 million tonnes including 0.6 million
tonnes of ore. Total material mined in March increased 53% from February. The total mill feed for the quarter
was 749k tonnes includ ing 273k tonnes milled in the month of March representing a 15% improvement on
the previous months.
Mining unit costs were higher than expected due to the introduction of a mining contractor to remove softer
clay rich material and i nfrastructure improveme nts such as the installation of 11 additional water
depressurisation wells.
Since September 2018, the site has received nearly 50 inches of rain including approximately 10 inches in
January and February. This compares to an average rainfall of approximate ly 3.8 inches per month
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historically. Despite this unusually wet weather and severe storms, t he operation did not sustain any
environmental breaches.
To mitigate against future high seasonal rainfall periods, a n additional 15 water depressurisation wells are
planned along with the continued removal of softer clay material using a contractor for the remainder of the
year. The Company expects production will increase in the second quarter and second half of 2019 on higher
grades and better mine productivity while costs are expected to decrease throughout the year.
Financial
In the first quarter, the Company generated $179.5 million in revenue, which was similar to the previous
quarter with lower sales offset by a higher gold price received. The EBITDA for the quarter was $64.4 million
resulting in an EBITDA margin of approximately 36%. The quarter-on-quarter decrease in EBITDA was driven
by higher operating costs, mainly at Haile. Net Profit for the quarter was $12.4 million or $0.02 per share on
a fully diluted basis. On an a djusted net profit basis (before unrealised losses on undesignated hedges and
impairment charge) profit for the first quarter was $16.0 million or $0.03 per share fully diluted.
For the first quarter, the Company generated operating cash flows of $39.0 million which compares to $95.8
million in the previous quarter and $77.1 million in the first quarter of 2018. The quarter-on-quarter decrease
in cash flow relates mainly to lower EBITDA and unfavourable movements in working capital rather than
favourable movements in working capital recorded in the prior quarter . Fully diluted cash flow per share
before working capital was $0.10 for the quarter.
As at the end of March 2019 , the Company’s cash balance stood at $ 86.5 million, excluding approximately
$45.7 million held in strategic equity investments. Total liquidity was $136.5 million while net debt was $99.2
million. In the first quarter, the Company paid $13.8 million in tax in New Zealand while continuing to invest
in its organic growth opportunities.
Growth
The Company’s organic growth opportunities particularly at Haile and Waihi continue to advance well while
exploration remains an important component to enabling the Company’s growth strategy.
At Waihi, the Company announced an upgrade to the resource for the Martha Project. This followed receipt
of resource consents (permits) in early February allowing the advancement of the project to operations. In
the first quarter, the Company announced an initial resour ce at its highly prospective WKP prospect. Over
the course of the year, the Company will complete a feasibility study for the Waihi operation while continuing
its resource drilling and mine plans for the Martha Underground.
At Haile, the Company successfu lly completed installation of the Tower Mill in the first quarter. Early in the
second quarter, the Company successfully completed an extended shutdown of the process plant to
complete maintenance activities and connect the IsaMillTM, which is now operating in circuit. Permitting of the
larger open pits and the Horseshoe underground at Haile continues to progress well and the Company
expects receipt of these permits by the end of 2019 or early 2020. The front-end engineering design activities
for the Horseshoe underground are currently underway and a Project Director, who previously led the Didipio
Underground construction, has been appointed to manage the Horseshoe development.
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At Macraes, the Company has previously stated that through exploration and mine planning, it is seeking to
extend the mine life. One of these opportunities is at Golden Point, where the Company is investigating the
potential for a standalone underground operation.
First Quarter 2019 Results and Webcast
The Company will host a conference call / webcast to discuss the results at 7:30 am on Tuesday April 30,
2019 (Melbourne, Australian Eastern Standard Time) / 5:30 pm on Monday April 29, 2019 (Toronto, Eastern
Daylight Time).
Webcast Participants
To register, please copy and paste the link below into your browser:
https://event.on24.com/wcc/r/1964727/BC09B89827D8C33EB9F9EC0D8CFC9941
Teleconference Participants (required for those who wish to ask questions)
Local (toll free) dial in numbers are:
North America: 1 888 390 0546
Australia: 1 800 076 068
United Kingdom: 0 800 652 2435
Switzerland: 0 800 312 635
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
www.oceanagold.com | Twitter: @OceanaGold
About OceanaGold
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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.
In 2019, the Company expects to produce between 500,000 to 550,000 ounces of gold and 14,000 to 15,000
tonnes of copper at All-In Sustaining Costs ranging between $850 and $900 per ounce sold.
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
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required by applicable securities laws. The information contained in this release is not investment or financial
product advice.
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