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OceanaGold announces Macraes mine life extension to 2028

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Global Mining Review,

OceanaGold Corp. has announced an extension to the mine life at the Macraes operation located on the South Island of New Zealand as well as initial mineral reserves and mineral resources for the Golden Point Underground, including the results of the recently completed Golden Point Underground pre-feasibility study.

Key highlights

  • Macraes life of mine (LOM) extended to 2028.
  • Before-tax net present value (NPV) (5% discount rate) of approximately US$430 million.
  • After-tax NPV5% of approximately US$325 million.
  • Frasers Underground extended to 2022; Golden Point Underground first production expected in 2021.
  • Initial Golden Point proven and probable reserves of 160 000 gold oz, measured and indicated resources of 260 000 gold oz and inferred R resources of 80 000 gold oz.
  • Macraes total mineral reserves increased by 240 000 gold oz, net of mine depletion (as at 30 June 2020).

Michael Holmes, President and CEO of OceanaGold, said: “Macraes continues to be the mine that keeps on giving. After nearly 30 years of operation, we are very pleased to announce that the Macraes life of mine will extend to at least 2028 with the inclusion of Golden Point Underground along with new open pit opportunities such as those at Deepdell.”

“We are also pleased to announce an increase to mineral reserves at Macraes. The increase, net of mine depletion as of 30 June 2020, of 240 000 proved and probable gold ounces includes our initial reserve at Golden Point Underground of 160 000 oz. The initial inferred resource at Golden Point Underground stands at 80 000 oz. We continue to drill extensively at Golden Point and other targets along the 35 km long Hyde-Macraes shear zone and the results of this drilling will be included in a subsequent update at year-end.”

“The mine life of the Frasers Underground has now been extended to 2022 and will be replaced by the Golden Point Underground, which we expect to start producing in 2021. Frasers Underground commenced production in 2008 with an initial mine life of 6 years. Over the past 12 years, the company has maintained a short mine-life at Frasers Underground, drilling ahead of the mine face and successfully replenishing Reserves y/y. Our expectation is to operate the Golden Point Underground in a similar manner while targeting y/y mine life extensions.”

“The updated Macraes Technical Report demonstrating an after-tax NPV of approximately US$325 million based on reserves, together with the progress at Waihi, makes for an economically robust New Zealand business that we expect will generate significant free cash flows while still retaining considerable exploration potential. Exploration will remain a strategic focus for us as we continue to invest in our organic growth opportunities in New Zealand.”

“New Zealand is a top-tier mining jurisdiction, in which we’ve successfully operated for almost 30 years. We are very excited to advance our New Zealand opportunities and create significant value for shareholders and socio-economic benefits for local stakeholders on both the South and North Islands.”

Updated mineral reserves and resources

As at 30 June 2020, the company increased Macraes proven and probable mineral reserves by 240 000 oz of gold, net of mine depletion inclusive of Golden Point’s initial mineral reserves of 160 000 oz of gold.

For Golden Point Underground, the company has announced an initial measured and indicated resource of 260 000 oz of gold along with an initial inferred resource of 80 000 oz. Note that approximately half of the Golden Point underground resource was previously included in the Round Hill opencast resource which has now been excised from the Round Hill opencast resource.

The company continues to focus on resource conversion and expansion on multiple surface and underground targets within the Macraes Goldfield. The company will incorporate results of this drilling in the year-end resource and reserve update.

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