OceanaGold Reports Third Quarter 2023 Operating and Financial Results
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October 25, 2023 NEWS RELEASE
OceanaGold Reports Third Quarter 2023 Operating and Financial Results
(All financial figures in US Dollars unless otherwise stated)
(VANCOUVER) OceanaGold Corporation (TSX: OGC; OTCQX: OCANF) ("OceanaGold" or the
“Company”) reported its operational and financial results for the three months ended September 30,
2023. The consolidated financial statements and the Management Discussion and Analysis (“MD&A”) are
available at www.oceanagold.com.
Gerard Bond, President and CEO of OceanaGold, said "The third quarter was always expected to be our
lowest production quarter of 2023, though it was further impacted by isolated challenges in the final stage
of the Mill Zone pit at Haile . However, strong performance at Didipio and Macraes keeps us on track to
meet the low-end of our full-year consolidated production guidance range. We also achieved a number of
exciting milestones across our business during the quarter: Haile produced its millionth ounce, fi rst ore
from the Haile Underground was mined, the ball mill at Macraes was comprehensively repaired and
returned to full service, and some exciting exploration results were released at Didipio and Haile. We
remain focused on safely and r esponsibly delivering on our consolidated full -year production guidance in
the final quarter of the year and have laid the groundwork for a strong 2024 and beyond."
Third Quarter Highlights
• 12MMA total recordable injury frequency rate of 4.1 per million hours worked.
• Consolidated production of 99,028 ounces of gold and 3,413 tonnes of copper.
• Third quarter All-In Sustaining Costs (“AISC”) of $1,911 per ounce on gold sales of 97,911 ounces.
• YTD AISC of $1,563 per ounce on gold sales of 349,064 ounces.
• Revenue of $214 million, EBITDA of $59 million and NPAT of $(6) million.
• YTD revenue of $759 million, EBITDA of $312 million and NPAT of $102 million.
• Adjusted earnings of $0.00 per share and operating cash flow of $0.08 per share.
• Repaid $15 million on the revolving credit facility during the quarter.
• Net debt of $172 million as at September 30, 2023, at a leverage ratio of 0.41 times.
• First development ore from the Haile Underground delivered to surface and on track for first stope
ore to the mill in October.
• Extended known mineralization approximately 100 metres below the existing resource at Didipio.
• Haile third quarter production adversely impacted by final stage of now complete Mill Zone Pit.
• Macraes ball mill fully repaired and milling returned to full capacity in August 2023.
• Semi-annual dividend of $0.01 per share paid October 6, 2023.
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Table 1 – Production and Cost Results Summary
Quarter ended
30 September 2023 Haile Didipio Waihi Macraes Consolidated
Q3 2023 Q2 2023 Q3 2022
Production, Sales & Costs
Gold Produced koz 23.0 30.5 10.9 34.7 99.0 130.1 105.0
Gold Sales koz 23.2 29.7 11.0 34.0 97.9 139.1 111.4
Average Gold Price US$/oz 1,930 1,944 1,924 1,930 1,934 1,967 1,699
Copper Produced kt — 3.4 — — 3.4 3.4 3.6
Copper Sales kt — 3.1 — — 3.1 3.5 3.7
Average Copper Price (2) US$/lb — 3.76 — — 3.76 3.67 3.14
Cash Costs US$/oz 1,063 754 1,549 1,004 1,003 725 1,100
Site AISC (1) US$/oz 3,047 872 2,196 1,550 1,911 1,318 1,554
Operating Physicals
Material Mined kt 7,683 443 268 11,347 19,741 20,922 20,082
Waste Mined kt 7,359 29 141 9,295 16,824 16,668 16,947
Ore Mined kt 324 414 127 2,052 2,917 4,254 3,135
Mill Feed kt 777 1,014 131 1,338 3,260 3,651 3,454
Mill Feed Grade g/t 1.21 1.04 2.77 0.97 1.12 1.30 1.13
Gold Recovery % 76.6 89.8 93.0 83.6 84.2 85.2 82.6
Capital Expenditures
General Operations US$m 12.7 2.9 1.1 6.8 23.5 26.5 18.9
Pre-strip & Capitalized Mining US$m 32.7 0.6 5.0 8.9 47.2 40.9 19.7
Growth US$m 14.9 2.4 1.7 0.5 19.5 16.6 12.4
Exploration US$m 1.7 0.7 4.2 0.4 7.0 6.5 5.4
Total Capital Expenditures US$m 62.0 6.6 12.0 16.6 97.2 90.5 56.4
Year to date
30 September 2023 Haile Didipio Waihi Macraes Consolidated
YTD 2023 YTD 2022
Production, Sales & Costs
Gold Produced koz 114.6 95.7 35.9 100.9 347.2 351.3
Gold Sales koz 116.6 95.9 35.8 100.8 349.1 350.4
Average Gold Price US$/oz 1,942 1,948 1,940 1,937 1,942 1,828
Copper Produced kt — 10.3 — — 10.3 10.9
Copper Sales kt — 9.9 — — 9.9 11.2
Average Copper Price (2) US$/lb — 3.90 — — 3.90 3.79
Cash Costs US$/oz 720 642 1,284 1,034 847 865
Site AISC (1) US$/oz 1,755 727 1,949 1,611 1,563 1,338
Operating Physicals
Material Mined kt 25,909 1,287 716 35,567 63,479 64,942
Waste Mined kt 23,300 101 378 29,328 53,107 54,667
Ore Mined kt 2,609 1,186 339 6,239 10,372 10,277
Mill Feed kt 2,484 3,086 341 4,096 10,007 10,240
Mill Feed Grade g/t 1.76 1.08 3.50 0.93 1.27 1.27
Gold Recovery % 81.0 89.5 93.5 82.3 84.6 83.1
Capital Expenditures
General Operations US$m 37.1 5.2 2.3 26.2 70.8 49.1
Pre-strip & Capitalized Mining US$m 78.3 2.6 18.7 30.4 130.0 79.9
Growth US$m 38.9 5.1 5.8 1.3 51.1 41.3
Exploration US$m 4.5 1.4 9.6 2.3 17.8 16.6
Total Capital Expenditures US$m 158.8 14.3 36.4 60.2 269.7 186.9
(1) Site AISC are exclusive of corporate general and administrative expenses but include share based remuneration paid to eligible site employees,
Consolidated AISC is inclusive of co rporate general and administrative expenses which includes share based remuneration paid to eligible non -operations
corporate employees. Cash Costs and All-In Sustaining Costs are reported on ounces sold and net of by-product credit basis.
(2) The Average Copp er Price Received calculated includes marked to market revaluations on unfinalized shipments as well as final adjustments on prior
period shipments per accounting requirements.
Notes:
• Consolidated capital excludes rehabilitation and closure costs at Reef ton and Junction Reefs plus corporate capital projects not related to a specific
operating region; these totalled $0.9 million and $0.3 million respectively in the third quarter . Capital and exploration expenditure by location excludes
related regional greenfield exploration where applicable.
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Table 2 – Financial Summary
Quarter ended 30 September 2023
(US$m)
Q3
30 Sep 2023
Q2
30 Jun 2023
Q3
30 Sep 2022
YTD
2023
YTD
2022
Revenue 214.1 301.0 213.9 759.0 729.0
Cost of sales, excluding depreciation and amortization (113.3) (121.1) (143.1) (352.9) (377.4)
General and administration – indirect taxes (1) (7.4) (5.1) (3.4) (18.1) (11.7)
General and administration – other (16.9) (18.8) (12.3) (53.9) (37.9)
Additional Government Share (2) (13.9) — — (13.9) —
Foreign currency exchange gain/(loss) (3.4) (3.2) (15.7) (8.7) (30.5)
Other income/(expense) — (0.3) 0.7 0.2 1.3
EBITDA (excluding impairment expense) (3) 59.2 152.5 40.1 311.7 272.8
Depreciation and amortization (51.7) (60.2) (46.3) (157.0) (148.7)
Net interest expense and finance costs (4.4) (4.8) (1.6) (14.7) (5.1)
Earnings before income tax (excluding impairment expense)
(3) 3.1 87.5 (7.8) 140.0 119.0
Income tax (expense)/benefit on earnings (8.6) (18.9) 1.4 (38.0) (23.0)
Earnings after income tax (excluding impairment expense) (3) (5.5) 68.6 (6.4) 102.0 96.0
Impairment of exploration/property expenditure/investment (4) — — — — (4.4)
Net Profit/(loss) after Tax (5.5) 68.6 (6.4) 102.0 91.6
Basic earnings/(loss) per share $(0.01) $0.10 $(0.01) $0.14 $0.13
Earnings/(loss) per share - fully diluted $(0.01) $0.09 $(0.01) $0.14 $0.13
(1) Represents production-based taxes in the Philippines, specifically excise tax, local business and property taxes.
(2) As at September 30, 2023, there was an initial reco gnition of the Additional Government Share. Under the addendum and renewal agreement of the FTAA
under which the Company’s Didipio mine in the Philippines operates, the Philippines government is entitled to the Additional Government Share. This is
equal to 60% of the Net Revenue of the mine less taxes and fees paid to the government after the Company’s recovery of the pre -operating expenditure.
The Additional Government Share has been recognized on a life to date basis and has been recorded within Trade and other payables.
(3) EBITDA, EBIT and Earnings after income tax are non-GAAP measures. Refer to the Accounting & Controls section of this report for an explanation.
(4) There were two write-offs in 2022 totalling $4.4 million related to capital projects in New Zealand and the Sam’s Creek investment.
Table 3 - Cash flow Summary
Quarter ended 30 September 2023
(US$m)
Q3
30 Sep 2023
Q2
30 Jun 2023
Q3
30 Sep 2022
YTD
2023
YTD
2022
Cash flows from Operating Activities 62.5 161.7 45.0 289.4 268.5
Cash flows used in Investing Activities (92.1) (89.4) (55.1) (263.1) (190.6)
Cash flows used in Financing Activities (22.7) (14.6) (6.9) (43.9) (72.9)
Free Cash Flow (29.6) 72.3 (17.1) 26.3 55.0
Note: Free Cash Flow in 2023 has been calculated as Cash flows from Operati ng Activities, less Cash flows used in Investing Activities. In the prior year, Free
Cash Flow was calculated as Cash flows from Operating Activities, less Cash flows used in Investing Activities less finance lease principal payments which are
reported as part of cash flow used in financing activities in 2022.
Operations
The Company produced 99,028 ounces of gold and 3,413 tonnes of copper in the third quarter of 2023.
Third quarter gold production was 24% lower than the previous quarter and 6% lower than the
corresponding quarter in 2022. The quarter -on-quarter reduction was driven by decreased production at
Haile, with lesser contribution quarter -on-quarter also from Macraes and Waihi. The Company has
produced 347,207 ounces of gold and 10,324 tonnes of copper year-to-date (“YTD”), which was broadly
in line with the corresponding period in 2022.
On a consolidated basis, the Company recorded a third quarter AISC of $1,911 per ounce on gold sales
of 97,911 ounces and copper sales of 3,133 tonnes. This was a 45% increase in AISC compared to the
previous quarter and a 23% increase compared to the corresponding period in 2022. The quarter -on-
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quarter increase was mainly driven by 30% lower comparative gold sales, especially from Haile. YTD the
Company has recor ded an AISC of $1,563 on sales of 349,064 ounces of gold and 9,877 tonnes of
copper. AISC exclu des the Additional Government Share of $13.9 million at Didipio for both the third
quarter of 2023 and YTD 2023 related to the Financial or Technical Assistance Agreement (“FTAA”).
Haile produced 22,961 ounces of gold in the third quarter. The 47% reduction compared to the previous
quarter was due to lower than expected grades from the lower benches of the Mill Zone pit and a planned
transition to waste stripping at Ledbetter pit; mining in Mill Zone was completed in the third quarter. Haile’s
third quarter AISC was $3,047 per ounce, a material increase compared to the previous quarter largely
driven by the lower quarter -on-quarter gold sales. YTD Haile has produce d 114,640 ounces of gold at an
AISC of $1,755 per ounce sold.
During the third quarter , first development ore was mined and stockpiled from the Horseshoe
Underground mine at Haile. First stope ore was achieved in mid -October and three production stopes are
planned to be mined and delivered to the mill in the fourth quarter of 2023.
Didipio produced 30,479 ounces of gold and 3,413 tonnes of copper in the third quarter. The 5% reduction
in gold production compared to the previous quarter was mainly due to s lightly lower grades consistent
with the mine plan. Copper production was largely flat quarter -on-quarter. Didipio’s third quarter AISC was
$872 per ounce on gold sales of 29,657 ounces and 3,133 tonnes of copper, an 18% increase on the
previous quarter du e to lower by-product credits (mainly volume related) and higher production taxes.
YTD Didipio has produced 95,720 ounces of gold and 10,324 tonnes of copper at an AISC of $727 per
ounce.
Macraes produced 34,725 ounces of gold in the third quarter . The 12% reduction compared to the
previous quarter was due to lower total mill feed with ball Mill No:2 (“ML -02”) taken down for repair in July.
The repair was completed in August and ML -02 was returned to service and operated at full capacity for
the remainder o f the third quarter. Macraes third quarter AISC was $1,550 per ounce, a 20% increase
compared to the previous quarter mainly due to the lower quarter-on-quarter gold sales. YTD Macraes
has produced 100,901 ounces of gold at an AISC of $1,611 per ounce.
Waihi produced 10,863 ounces of gold for the third quarter. The 27% decrease compared to the previous
quarter was driven by a 36% decrease in feed grade, as mining encountered additional lower grade
remnant ore material, partially offset by a 10% increase in ore tonnes mined. Waihi’s third quarter AISC
was $2,196 per ounce , a 36% increase compared to the previous quarter mainly driven by the lower
quarter-on-quarter gold sales. YTD Waihi has produced 35,945 ounces of gold at an AISC of $1,949 per
ounce.
Financial
The Company recorded third quarter consolidated revenue of $214.1 million, a 29% decrease compared
to the previous quarter largely driven by 30% lower gold sales. The decrease in gold sales reflected the
aforementioned performance at Haile, Macrae s and Waihi. Third quarter revenue was broadly in line with
the corresponding period in 2022.
The Company has YTD consolidated revenue of $759.0 million , a 4% increase relative to the
corresponding period in 2022, driven by a 14% higher realized gold pric e for the Company and an 18%
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increase in gold sales at Macraes. This was partially offset by a 42% decrease in gold sales at Haile and
a 18% decrease in gold sales at Waihi relative to the corresponding period.
Third quarter EBITDA was $59.2 million, a 61% decrease relative to the previous quarter mainly due to
the lower revenue and the Additional Government Share of $13.9 million recognized for the first time at
Didipio, partially offset by lower costs of sales. YTD consolidated EBITDA was $311.7 million, reflecting a
14% increase compared to the corresponding period in 2022 with higher revenue and lower foreign
currency exchange losses, partially offset by higher general and administration costs including indire ct
taxes and the Additional Government Share at Didipio.
Third quarter Net Loss After Tax was $(5.5) million or $(0.01) per share fully diluted, compared with a Net
Profit After Tax of $68.6 million and $0.09 per share fully diluted in the previous quarter.
Third quarter Adjusted Net Loss After Tax was $(1.6) million or $0.00 per share fully diluted compared with
an Adjusted Net Profit After Tax of $70.4 million or $0.10 per share in the previous quarter.
YTD Net Profit After Tax was $102.0 million , a 6% increase compared to the corresponding period in
2022.
Third quarter cash flows from operating activities were $62.5 million, which was 61% below the previous
quarter reflecting both the lower revenue and EBITDA in the third quarter, in line with plan. YTD cash
flows from operating activities totalle d $289.4 million, which was 8% above the corresponding period in
2022.
Third quarter cash flows used in investing activities totalled $92.1 million, which was 3% above the prior
quarter, due primarily to higher quarter -on-quarter pre-stripping and capitali zed mining costs and growth
capital expenditure primarily related to the Haile underground mine development.
The Company’s Free Cash Flow (“FCF”) for the third quarter was $(29.6) million. YTD FCF is $26.3
million.
As at September 30, 2023, the Company’s a vailable revolving credit facilities remained at $250 million,
with $115 million undrawn following a discretionary repayment of $15.0 million during the third quarter.
The Company had immediately available liquidity of $175 million including $60.3 million in cash.
The Company’s Net Debt position, inclusive of equipment leases, increased to $ 171.6 million from $136.3
million in the previous quarter primarily due to the decrease in cash and cash equivalents as a result of
negative FCF and payment of the sem i-annual dividend. The Company’s leverage ratio was 0.41 times as
at September 30, 2023.
Outlook
Overall, the Company expects to deliver gold production within its original production range, albeit
towards the lower end of the range. Copper production an d group capital and exploration expenditure
guidance remains unchanged, with changes at the asset level offsetting each other. AISC guidance has
been lifted by $125 per ounce reflecting the impact of lower production from Haile.
The Company’s updated 2023 full year guidance is presented in the tables below.
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Production & Costs Haile Didipio Waihi Macraes Consolidated
Gold Production koz 140 - 150 125 - 135 50 - 60 130 - 140 460 - 480
Copper Production kt - 12 - 14 - - 12 - 14
Cash costs $/oz 950 - 1,050 500 - 600 1,350 - 1,450 900 - 1,000 850 - 950
All-in sustaining costs (1) $/oz 1,950 - 2,050 650 - 750 1,800 - 1,900 1,575 - 1,675 1,550 - 1,650
Capital Investments
(US$m) Haile Didipio Waihi Macraes Consolidated
(2)
Included in
AISC
Pre-strip and Capitalized
Mining 85 - 95 4 - 6 20 - 25 45 - 50 155 - 170 155 - 170
General Operations 45 - 50 10 - 15 3 - 5 30 - 35 85 - 100 85 - 100
Growth 40 - 45 5 - 10 10 - 15 1 - 3 60 - 70 — - —
Exploration 6 - 8 3 - 5 13 - 18 2 - 4 25 - 35 7 - 9
Total Investments 180 - 200 25 - 35 45 - 55 80 - 90 330 - 385 245 - 285
1. Consolidated AISC include corporate costs. AISC guidance based on copper price of $3.75/lb.
2. Includes corporate capital and excludes Reefton and junction Reefs Rehabilitation costs and equipment leases classified as non-sustaining at inception.
As stated in the news release dated September 14, 2023, under reconciliation in the lower benches of the
now complete Mill Zone pit negatively impacted Haile’s production guidance for the year. However, due to
strong operating performance YTD and projected for the remainder of the year at both Didipio and
Macraes, the Company still expects to produce above the bo ttom end of the original group gold
production guidance range of 460,000 ounces , but has narrowed the top end of the gold production
guidance to be 480,000 ounces . The Company’s copper production guidance of between 12,000 to
14,000 tonnes remains unchanged.
Reflecting the lower production guidance, group cash cost guidance has increased to $850 to $950 per
ounce and AISC guidance has increased to $1,550 to $1,650 per ounce for the year.
As previously announced, full year production at Haile is expected to be approximately 25,000 ounces
below the bottom of the original guidance range, with full year production now expected to be 140,000 to
150,000 ounces of gold. Consequently Haile’s AISC will be higher and is now expected to be between
$1,950 and $2,050 per ounce.
Didipio full year production is expected to exceed the original guidance range, which has been increased
to 125,000 to 135,000 ounces of gold, with copper guidance unchanged at 12,000 to 14,000 tonnes of
copper. As a result of the higher productio n, AISC is expected to be lower than original guidance and is
now expected to be between $650 and $750 per ounce.
Through increased throughput initiatives at Macraes following the ball mill repair, Macraes is expected to
exceed its original production gu idance and is now expected to produce between 130,000 and 140,000
ounces of gold for the year. As a result of the higher production, AISC is expected to be lower than
original guidance and is now expected to be between $1,575 and $1,675 for the year.
Waihi’s 2023 production guidance of between 50,000 and 60,000 ounces of gold remains unchanged.
However, a projected increase in operating costs including contract workers and additional water
management costs means that AISC is now expected to be between $1,800 and $1,900 per ounce, which
is higher than original guidance.
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The Company also maintains its consolidated capital and exploration expenditure guidance of between
$330 million and $385 million unchanged. However, based on the latest mine plans and the ti ming of
planned capital expenditure programs, the full year general operations capital and growth capital
guidance ranges have been reduced to $85 million to $100 million and $60 million to $70 million ,
respectively, while pre -strip and capitalized mining costs have been increased to $155 million to $170
million. Exploration expenditure guidance remains unchanged.
Conference Call
Senior management will host a conference call / webcast to discuss the results on Thursday October
26th, 2023, at 9:00 am Eastern Time.
Webcast Details:
To register, please copy and paste the link into your browser: https://app.webinar.net/RGB2oWGoZV9
Conference Call Details:
Toll-free North America: +1 888-390-0546
Toronto and International: +1 416-764-8688
If you are unable to attend the call, a recording will be made available on the Company's website.
About OceanaGold
OceanaGold is a growing intermediate gold and copper producer committed to safely and responsibly
maximizing the generation of Free Cash Flow from our operati ons and delivering strong returns for our
shareholders. We have a portfolio of four operating mines: the Haile Gold Mine in the United States of
America; Didipio Mine in the Philippines; and the Macraes and Waihi operations in New Zealand.
For further information please contact:
Investor Relations:
Rebecca Harris, Director, Investor Relations
Tel: +1 604-678-4095
Media Relations:
Melissa Bowerman, Group Manager, Communications
Tel: +61 730 740 509
www.oceanagold.com | Twitter: @OceanaGold
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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, execution of business
strategy, future growth, future production, estimated costs, results of operations, business prospects and
opportunities of OceanaGold Corporation and its rel ated subsidiaries. Any statements that exp ress 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 sta tements of historical fact and may be forw ard-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 sta tements 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 an d filed with securities regulators which i s 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; 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 re lease 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.