OCEANAGOLD CORP
*NOTE AISC IS PRETTY HIGH
Release: OceanaGold Reports First Quarter 2020 Operational Results
Wednesday, May 6, 2020, 3:42 AM ET
OceanaGold Reports First Quarter 2020 Operational Results
Canada NewsWire
MELBOURNE, May 6, 2020
/NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES AND NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES./
(All financial figures in US Dollars unless otherwise stated)
MELBOURNE, May 6, 2020 /CNW/ - OceanaGold Corporation (TSX: OGC) (ASX: OGC) (the "Company") is pleased to release its unaudited production and costs for the quarter ended March 31, 2020. Note that the numbers contained in this document are unaudited and subject to finalisation. The Company will release its complete first quarter 2020 financial and operational results before TSX market open on Thursday May 14, 2020 (Toronto, Eastern Daylight Time).
Key Highlights
-- Michael Holmes appointed President and Chief Executive Officer, following
nearly eight years as Chief Operating Officer.
-- Total Recordable Injury Frequency Rate ("TRIFR") of 3.0 per million hours
worked compared to 3.6 per million hours worked at the end of 2019.
-- Strict protocols in place to protect the health, safety and wellbeing of
employees and contractors in response to the COVID-19 global pandemic; no
confirmed cases to-date.
-- Consolidated gold and silver production of 80,707 ounces and 54,134
ounces, respectively.
-- Consolidated All-In Sustaining Costs ("AISC")1 of $1,218 per ounce and
cash costs of $802 per ounce on gold sales of 91,388 ounces.
-- Increased total liquidity mainly through the advance gold sales netting
approximately $79 million and full draw down of the Revolving Credit
Facility, exiting the quarter with $177 million cash.
-- Year-on-year increase in Measured and Indicated Resources of 800,000
ounces and Inferred Resources of 700,000 ounces, both net of mining
depletion.
-- Subsequent to quarter end, fully resumed operations at Macraes and
continued development of the Martha Underground with COVID-19 safeguards
in place.
-- Full year 2020 guidance reaffirmed.
(1) AISC are provisional and may change on release
of final results. Site AISC are before the allocation
of Corporate General and Administrative expenses;
consolidated AISC include allocation of Corporate
General and Administrative expenses.
Michael Holmes, President and CEO said, "Despite the emergence of the COVID-19 pandemic creating additional and varied risks across our global operational footprint, we delivered a good quarter of operational performance while safeguarding the health and wellbeing of our workforce."
"At Macraes, we have resumed full operations and at Waihi we have restarted the development of the Martha Underground project following easing of COVID-19 restrictions by the New Zealand Government in late April. Despite limited operations at Macraes during the five-week lock-down, we are maintaining our full year guidance and continue to expect a significantly stronger second half of the year of operational performance."
"At Haile, the operations remain at full capacity with strict measures in place to safeguard the health and safety of our workforce and contractors. We are pleased with the first quarter operational performance at Haile despite another quarter of rainfall in excess of historical averages. Production was in line with our expectations while mining rates increased quarter-on-quarter and mining unit costs decreased. As previously forecast, we expect production to increase quarter-on-quarter and AISC to decrease with two-thirds of this year's gold output expected in the second half of the year and the fourth quarter expected to be the strongest quarter for production."
"At Didipio, the FTAA renewal remains with the Office of the President. During the quarter, we successfully exported and sold the gold doré produced last year and subsequent to the quarter end, the Philippine National Government facilitated delivery of diesel fuel required to continue securing the asset in a safe and operational ready state."
"We are focused on managing the near-term risks while executing on our long-term operational plans, restarting operations at Didipio and advancing our organic growth opportunities including the Martha Underground. To-date, we have not been materially impacted by COVID-19, however we recognise that our current situation could change given the risks remain elevated. As such, we will continue to strictly enforce the protocols and safeguards we have in place at each of our operations."
First Quarter 2020 Haile Didipio Waihi Macraes Consolidated
Operational
Results
Q1 2020 Q4 2019
Gold Produced koz 29.4 - 12.2 39.2 80.7 108.2
Gold Sales koz 33.3 6.8 13.5 37.8 91.4 107.3
Average Gold Price US$/oz 1,581 1,652 1,572 1,595 1,509(1) 1,404(1)
Copper Produced kt - - - - - 0.1
Copper Sales kt - - - - - -
Average Copper US$/lb - - - - - -
Price
Material Mined kt 8,602 - 52 12,531 21,185 19,923
Waste Mined kt 7,941 - - 10,898 18,839 16,617
Ore Mined kt 661 - 52 1,633 2,346 3,306
Mill Feed kt 869 - 57 1,338 2,264 2,449
Mill Feed Grade g/t 1.36 - 7.44 1.12 1.37 1.59
Gold Recovery % 77.3 - 87.9 81.6 80.9 86.4
Cash Costs US$/oz 1,147 443 432 695 802 757
All-In Sustaining
Costs (2) US$/oz 1,551 444 376 1,218 1,218 980
(1) Realised gains and losses on gold hedging are included
in the consolidated average gold price.
(2) All-in Sustaining Costs reflected at each asset are
exclusive of corporate general and administrative
expenses. Consolidated All-in Sustaining Costs are
inclusive of corporate general and administrative
expenses.
As at the end of the first quarter 2020, the Company achieved a TRIFR of 3.0 per million hours worked, which compares to 3.6 per million hours worked at the end of 2019. There were three recordable injuries during the first quarter compared to eight over the same period in 2019, reflecting the continued reinforcement of enhanced health and safety behaviours across the business.
On a consolidated basis, the Company produced 80,707 ounces of gold and 54,134 ounces of silver in the first quarter. Gold production decreased quarter-on-quarter as expected due to lower average grades at both Haile and Macraes and the conclusion of mining at the Correnso deposit at Waihi.
The Company reported consolidated AISC of $1,218 per ounce and cash costs of $802 per ounce on sales of 91,388 ounces of gold. The sales include 6,846 ounces of gold from Didipio following the government approval and export of production from 2019.
Haile Gold Mine, United States
The Haile Gold Mine produced 29,373 ounces of gold, decreasing quarter-on-quarter as expected due to processing of lower grades. Site AISC for the first quarter 2020 at Haile was $1,551 per ounce on gold sales of 33,252 ounces. The quarter-on-quarter increase in AISC was expected and due to higher pre-stripping capital and decreased gold sales from a lower head grade.
Total material mined in the first quarter increased 124% year-on-year and 8% quarter-on-quarter despite the quarter being challenged by higher than average rainfall. Mining unit costs improved 46% year-on-year and 5% on the previous quarter. Mining operations benefitted from the upgraded mining fleet and more effective mitigating strategies in place to deal with excessive rainfall.
At the end of January, the pre-aeration thickener was commissioned to support the regrinding circuit and fine-tuning of the circuit is ongoing. Mill feed was 16% higher than the first quarter of 2019 and similar quarter-on-quarter despite an extended shutdown of the plant for planned maintenance in January.
First quarter recoveries decreased quarter-on-quarter, in line with the lower feed grade, as expected. The Company remains focused on delivering improved recoveries through the course of 2020 as the regrind circuit is further optimised and as head grades increase.
Looking ahead, the Company expects production in the second half of the year to deliver two-thirds of the year's total gold output at lower corresponding AISC. The variability in production and AISC relate to mine sequencing whereby mined and processed grades increase as the year progresses. The fourth quarter is expected to deliver the highest production with the lowest corresponding AISC as compared to the first quarter, which was expected to have delivered the lowest production at the highest AISC for 2020.
The Company continues to optimise the Horseshoe underground design, including review of the mining sequence, backfill options and selection of the underground mining fleet. Portal development is expected to commence in 2021 as the optimisation works progress through the balance of 2020.
Macraes Gold Mine, New Zealand
At Macraes, the operation produced 39,163 ounces of gold, a quarter-on-quarter decrease as expected, due to a lower head grade and operational limitations imposed in late March from the New Zealand Government COVID-19 restrictions. Site AISC was $1,218 per ounce on sales of 37,780 ounces of gold, a quarter-on-quarter increase due to lower sales and cash payment for a new excavator ($113 per ounce sold). The Company is currently in the process of finalising a sale and lease-back arrangement on the new Hitachi excavator and expects to complete this transaction in the second quarter.
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May 06, 2020 03:42 ET (07:42 GMT)