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OceanaGold reports preliminary 2Q21 results

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Global Mining Review,

OceanaGold Corporation has released its preliminary production and costs for the quarter ended 30 June 2021.

Key Highlights

  • 1H21 consolidated production of 177 039 oz of gold (Au) at all-in sustaining costs (AISC) of US$1227/oz on sales of 178 781 oz of Au.
  • Consolidated 2Q21 gold production of 93 848 oz at AISC of US$1226/oz on sales of 95 934 oz of Au.
  • Record quarterly gold production from Haile of 57 240 oz in 2Q21, with 101 581 oz produced year to date.
  • Total immediate available liquidity of US$142.3 million, including US$92.3 million of cash and US$50 million in available undrawn credit facilities.
  • Re-commencement of sustained milling operations at Waihi with production from Martha Underground.
  • Didipio’s Financial or Technical Assistance Agreement (FTAA) renewed by the Philippine National government.

Michael Holmes, President and CEO, said: “We delivered improved operational results across the portfolio in the second quarter while also progressing our organic growth projects. Haile delivered record production in 2Q21 reflecting the combination of continued productivity improvements and the expected increase in feed grade. As previously mentioned, we are also very pleased to appoint David Londono as Executive General Manager of the Haile operation. He brings 35 years of experience in the mining industry with a significant focus on mine management and optimisation.”

“We are also pleased to confirm the successful completion of the Waihi SAG mill upgrade and recommencement of sustained milling operations. As we continue to ramp-up Martha Underground and advance the greater Waihi district through exploration and permitting, we are well on our way to achieving our objective of realising the enormous potential identified at Waihi.”

“With the Didipio’s FTAA renewed for another 25 years, we anticipate implementing a staged restart of operations in the coming weeks. Our initial priorities will be to rehire and retrain our exceptional Philippine workforce and transport and monetise the finished product inventory at site. Upon the restart of milling, gold and copper production will recommence utilising existing stockpiles and this cash flow will fund working capital requirements for underground development. We currently expect to achieve the full underground mining rate of 1.6 million tpy within 12 months and thereafter produce approximately 10 000 oz of Au and 1000 tpm of copper. We expect to provide a fulsome update on Didipio restart plans over the coming weeks.”

In 1H21, the company produced 177 039 oz of Au, including 93 848 oz in 2Q21. Gold production in 1H21 was 27% higher than the same period in 2020 primarily due to improved performance at Haile, incremental production from Waihi including the Martha Underground development, and limited impacts from COVID-19. Higher q/q gold production reflects improved grades and higher processing throughputs at Haile, partially offset by lower than expected production at Macraes. The company also recommenced milling at Waihi at the end of 2Q21.

The company reported consolidated AISC of US$1226/oz and US$1227/oz in 2Q21 and year to date (YTD) respectively, on gold sales of 95 934 and 178 781, respectively. Cash costs for 1H21 were US$764/oz while 2Q21 cash costs were US$734/oz, lower than the prior year and previous quarter due to improved grades and unit cost reductions at Haile, partially offset by higher per ounce cash costs at Macraes.

The company ended 2Q21 with US$92.3 million in cash and US$142.3 million in liquidity, including US$50 million in undrawn credit facilities.

Haile produced a quarterly record 57 240 Au oz in 2Q21, consistent with expectations of a stronger 1H21. Gold production increased 29% q/q, reflecting increased higher throughput and higher feed grade as expected. Over the prior YTD, gold production nearly doubled as a result of productivity improvements and higher head grade. AISC for 2Q21 was US$922 and cash costs of US$615 on sales of 59 287. YTD AISC and cash costs were US$953 and US$684/oz on gold sales of 104 516.

Waihi produced 3939 Au oz in 2Q21 and 8276 Au oz in 1H21. Gold production decreased q/q and over the prior YTD due to the planned plant shutdown for the installation of a new SAG mill, which was completed late in 2Q21. The plant has now recommenced sustained milling with no major plant shutdowns or upgrades planned in the near term. Cash costs were US$1215/oz in 2Q21 and US$1099/oz YTD on gold sales of 3442 and 6547, respectively. AISC of US$1223/oz in 2Q21 and US$976/oz YTD reflect limited early production from Martha Underground in June and batch processing completed 1Q21.

Macraes produced 32 669 Au oz in 2Q21 and 67 182 Au oz in 1H21. Gold production decreased q/q, reflecting access limitations to some higher grade opencast ore zones due to geotechnical challenges plus delays in the planned mill shutdown. Over the prior YTD, gold production increased 27%, reflecting unrestricted operating conditions after COVID-19-related stoppages in 2020, partially offset by periodic weather and milling disruptions in 1H21. 2Q21 AISC of US$1524/oz and cash costs of US$897/oz on gold sales of 33 205, were higher q/q. The increase reflects lower sales combined with higher waste movements due to mine sequence changes as the geotechnical risks were addressed. YTD AISC and cash costs were US$1428/oz and US$857/oz, respectively, on gold sales of 67 718.

At Didipio, the company recently announced the FTAA renewal by the Philippine National government, effective for a 25-year period as of June 19, 2019. The company currently plans a staged restart of operations with milling to recommence as soon as possible utilising stockpiled ore. The safe rehiring and retraining of the Philippine workforce is also a priority and key catalyst to achieving full production, currently expected within the next 12-months.

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