Oceanagold Reports Second Quarter 2017 Results
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MEDIA RELEASE
27 July 2017
OCEANAGOLD REPORTS SECOND QUARTER 2017 RESULTS
(All financial figures in US Dollars unless otherwise stated)
(MELBOURNE) OceanaGold Corporation (TSX/ASX: OGC) (the “Company”) is pleased to release its
financial and operational results for the quarter ended 30 June 2017. 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 production of 272,352 ounces of gold and 10,277 tonnes of copper in the first half of
2017, including 124,396 ounces of gold and 4,322 tonnes of copper in the second quarter.
Consolidated year-to-date All-In Sustaining Costs of $599 per ounce on sales of 228,214 ounces of
gold (excluding Haile) and 9,976 tonnes of copper.
Consolidated second quarter All-In Sustaining Costs of $681 per ounce on sales of 114,192 ounces
of gold (excluding Haile) and 5,828 tonnes of copper.
First half revenue of $333.5 million with EBITDA of $186.4 million and a net profit of $61.4 million.
Second quarter revenue of $171.7 million with an EBITDA of $84.7 million and a net profit of $25.4
million.
Completed the Haile Optimisation Study which demonstrated significant value enhancement through
increased production and cash flows over a longer mine life and a 70% increase in total reserves.
Immediate liquidity of $126.8 million including $81.6 million in cash, excluding $71.6 million of
marketable securities held in strategic investments.
Continued encouraging exploration results.
Mick Wilkes, President and CEO of OceanaGold said, “The first half of the year yielded strong financial and
operating results from our diversified portfolio of assets . The Didipio operation continued its strong
performance delivering strong cash flows and high -margin ounces to offset weaker production fr om Haile
where production is improving as we rectify the commissioning issues previously flagged.”
He added, “Although commissioning of the Haile process plant has taken longer than expected , it is still a
top-tier asset as reflected by the results of the optimisation study. Over the next 18 years or more we expect
the Haile Gold Mine to deliver significant cash flows and remain excited about the long term exploration
potential of the district. We plan to be operating there for a very long time.”
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Table 1 – Production and Cost Results Summary
Didipio Waihi Macraes Haile (2) Consolidated
Second Quarter 2017 Results Q2 2017 Q1 2017
Gold Produced ounces 42,899 25,559 39,778 16,160 124,396 147,956
Copper Produced tonnes 4,322 - - - 4,322 5,955
Gold Sales ounces 47,185 24,743 42,264 15,558 129,750 (3) 126,225 (3)
Copper Sales tonnes 5,828 - - - 5,828 4,148
All-In Sustaining Costs (1) $ per ounce 147 913 1,140 - 681 521
YTD June 30 2017 YTD Jun
30 2017
YTD Jun
30 2016
Gold Produced ounces 105,647 51,419 78,328 36,958 272,352 225,339
Copper Produced tonnes 10,277 - - - 10,277 12,244
Gold Sales ounces 98,652 51,500 78,062 27,761 255,975 (3) 233,293
Copper Sales tonnes 9,976 - - - 9,976 10,858
All-In Sustaining Costs (1) $ per ounce 15 876 1,154 - 599 722
Notes:
1. In this second quarter 2017 MD&A, all revenue and costs reported do not include the Haile operations as these have been
capitalised as commercial production is yet to be declared.
2. Haile gold mine commenced selling gold in February 2017. Revenue from the sale of gold is treated as pre-production income.
3. Consolidated 2017 gold sales include gold sales from Haile.
Table 2 – Consolidated Financial Summary*
$’000 Q2
Jun 30 2017
Q1
Mar 31
2017
Q2
Jun 30
2016
YTD
Jun 30
2017
YTD
Jun 30
2016
Revenue 171,650 161,800 169,763 333,450 330,814
Cost of sales, excluding depreciation and
amortisation (73,767) (56,834) (79,642) (130,601) (151,531)
General & administration – other (14,513) (8,950) (15,565) (23,463) (27,933)
Foreign currency exchange gain/(loss) 647 (221) 2,543 426 3,268
Gain on sale of available-for-sale assets - 5,314 - 5,314 -
Other income/(expense) 728 562 187 1,290 541
Earnings before interest, tax,
depreciation and amortisation (EBITDA)
(excluding gain/(loss) on undesignated
hedges and impairment charge)
84,745 101,671 77,286 186,416 155,159
Depreciation and amortisation (51,171) (36,403) (28,015) (87,574) (61,784)
Net interest expense and finance costs (4,292) (4,557) (2,536) (8,848) (4,724)
Earnings before income tax and
gain/(loss) on undesignated hedges and
impairment charge
29,282 60,711 46,735 89,994 88,651
Tax (expense) / benefit on earnings (4,538) (1,318) (5,599) (5,857) (10,806)
Earnings/(loss) after income tax and
before gain/(loss) on undesignated
hedges and impairment charge
24,744 59,393 41,136 84,137 77,845
Impairment charge - (17,654) - (17,654) -
Gain/(loss) on fair value of undesignated
hedges 1,075 (7,874) (1,828) (6,799) (20,132)
Tax (expense)/benefit on gain/loss on
undesignated hedges (301) 2,205 511 1,904 5,637
Share of profit/(loss) from equity accounted (161) (65) (164) (226) (164)
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Note:
In this second quarter 2017 MD&A, all revenue and costs reported do not include the Haile operations as these have been capitalised
as commercial production is yet to be declared.
On a consolidated basis, during the first half of 2017 the Company achieved production of 272,352 ounces
of gold and 10,277 tonnes of copper, including 124,396 ounces of gold and 4,322 tonnes of copper in the
second quarter. The quarter-on-quarter decrease in consolidated gold production was expected and
previously forecast and due primarily to lower production from the Didipio operation . In the second quarter.
the Didipio head grade decreased following the cessation of open pit mining resulting in a higher proportion
of lower grade stockpiled ore processed. Decreased production was also due to lower production from Haile
where issues related to the commissioning of the Carbon-in-Leach (“CIL”) circuit along with load imbalances
in the milling circuit led to lower throughputs and recoveries.
On a consolidated basis, and excluding Haile gold sales, during the first half of 2017, the Company recorded
an AISC of $ 599 per ounce on sales of 228,214 ounces of gold and 9,976 tonnes of copper . During the
second quarter, on a consolidated basis and excluding Haile gold sales, the Company recorded an AISC of
$681 per ounce on sales of 114,192 ounces of gold and 5,828 tonnes of copper.
During the first half, the Company achieved revenue of $ 333.5 million including second quarter revenue of
$171.7 million.
EBITDA in the first half of 2017 was $186.4 million including second quarter EBITDA of $84.7 million, which
was lower quarter -on-quarter due to increased operating and general and administrative (“G&A”) costs,
partially offset by higher revenue.
For the first half of 2017, the Company achieved a net profit of $61.4 million and a second quarter net profit
of $25.4 million. The quarter -on-quarter decrease in net profit was a result of lower EBITDA , higher
depreciation and amortisation costs and tax expense, which were partially offset by a gain on the fair value
of undesignated hedges.
Operating cash flow for the first half of the year was $ 140.7 million including $ 88.4 million in the second
quarter. The increase in operating cash flow from the first quarter was primarily due to higher revenues and
favorable working capital movements at Didipio following the reduction of gold -copper concentrate
inventories and decrease in trade debtors.
At the end of the second quarter of 2017, the Company had immediate available liquidity of $126.8 million
which included a cash balance of $81.6 million, excluding $71.6 million in marketable securities from strategic
investments. During the quarter, the Company increased its revolving credit facilities to $330 million of which
$284.8 million was drawn.
associates
Net Profit 25,357 36,005 39,655 61,362 63,186
Basic earnings per share $0.04 $0.06 $0.07 $0.10 $0.10
CASH FLOWS
Cash flows from Operating Activities 88,391 52,343 91,486 140,734 123,159
Cash flows used in Investing Activities (71,696) (65,910) (122,496) (137,606) (226,236)
Cash flows (used in) / from Financing
Activities (6,635) 10,545 12,827 3,910 14,860
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Second Quarter 2017 Results Webcast
The Company will host a conference call / webcast to discuss the results at 7:30 am on Friday 28 July 2017
(Melbourne, Australia n Eastern Standard Time ) / 5:30 pm on Thursday 27 July 2017 (Toronto, Eastern
Daylight Time).
Webcast Participants
To register, please copy and paste the link below into your browser:
http://event.on24.com/r.htm?e=1462822&s=1&k=3BC20600AC3044BA5401F93244445492
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 0605
All other countries (toll): + 1 416 764 8609
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
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 its flagship operation,
the Didipio Gold-Copper Mine located on the isl and 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 m ade up of a
series of open pit mines and the Frasers underground mine. In the United States, the Company is currently
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commissioning the Haile Gold Mine, a top -tier 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 2 7 years with a proven track -record for environmental
management and community and social engagement. The Company has a strong soci al 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 600,000 ounces of gold and 18, 000 to 19,000 tonnes
of copper with sector leading All-In Sustaining Costs that range from $600 to $650 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 producti on, 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, projectio ns, 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 uncerta inties 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, inher ent 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 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 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.