(All financial figures in US Dollars unless
otherwise stated)
/NOT FOR DISSEMINATION OR DISTRIBUTION IN
THE UNITED STATES AND NOT FOR
DISTRIBUTION TO US NEWSWIRE SERVICES./
BRISBANE, Feb. 23, 2022 /CNW/ - OceanaGold Corporation
(TSX: OGC) (ASX: OGC) (the "Company") reported its financial
and operational results for the year ended December 31, 2021. 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
Highlights
- Full year revenue of $744.7
million with adjusted Earnings before Interest, Depreciation
and Amortisation ("EBITDA") of $351.8
million and adjusted net profit of $141.0 million or $0.20 per share
- Fourth quarter revenue of $208.5
million with adjusted EBITDA of $92.6
million and adjusted net profit of $29.3 million or $0.04 per share.
- Total immediately available liquidity of $163 million, including $133 million in cash and $30 million in available undrawn credit
facilities as of December 31,
2021.
- Three-year guidance demonstrates a 15% compounded annual
production growth rate from 2021 levels at increasing free cash
flow margins.
- Consolidated 2022 gold production guidance of 445,000 to
495,000 ounces and 11,000 to 13,000 tonnes of copper.
- Consolidated 2022 AISC guidance of $1,275 to $1,375
per ounce sold including cash costs between $675 to $775 per
ounce sold, both on a by-product basis.
- Multi-year consolidated gold production of:
-
- 490,000 to 530,000 ounces plus 12,000 to 14,000 tonnes of
copper at an AISC of $1,150 to
$1,300 per ounce sold in 2023;
and
- 580,000 to 620,000 ounces plus 12,000 to 14,000 tonnes of
copper at an AISC of $1,000 to
$1,150 per ounce sold in 2024.
- Gerard Bond appointed President
and Chief Executive Officer effective April
4, 2022.
Scott Sullivan, Acting President
and CEO of OceanaGold said, "This release brings to close a
successful year of operational and financial performance for the
Company on the back of record production from Haile and the
re-start of the Didipio operation. Following a challenging year in
2020, financial performance rebounded in 2021 with revenues
increasing almost 50% and EBITDA increasing almost 155%.
Importantly, the fourth quarter saw the Company report positive
free cash flow, the first in over two years."
"Additionally, we completed the Financial or Technical
Assistance Agreement renewal with the Government of Philippines, paving the way for the restart of
operations at Didipio. The subsequent ramp-up of operations has
progressed ahead of our expectations and we completed the transport
and sale of copper and gold inventory on-hand before the end of the
year. The return of Didipio compliments the suite of gold producing
assets in New Zealand where we are
advancing significant growth projects, Wharekirauponga ('WKP') in
particular and the Haile Gold Mine where we seek to commence
construction of the underground upon securing the necessary
permits."
"With the release of our 2022 guidance and multi-year outlook,
we have set the stage to generate significantly more free cash flow
each year on higher consolidated production. We remain focused on
driving costs lower while allocating capital prudently to drive
stronger risk-adjusted returns. I look forward to working closely
with our newly appointed President and CEO Gerard Bond who will bring his extensive
financial and commercial experience to drive value for shareholders
over the long-term."
Table 1 – Financial Summary
Quarter ended 31 Dec
2021
(US$m)
|
Q4
31 Dec
2021
|
Q3
30 Sep
2021
|
Q4
31 Dec
2020
|
2021
|
2020
|
Revenue
|
208.5
|
204.6
|
168.2
|
744.7
|
500.1
|
|
Cost of sales,
excluding depreciation and amortization
|
(98.7)
|
(87.4)
|
(76.9)
|
(324.2)
|
(273.6)
|
|
General and
administration – indirect
taxes (2)
|
(1.8)
|
(4.1)
|
(0.3)
|
(6.0)
|
(3.4)
|
General and
administration – idle capacity charges
(1)
|
(3.9)
|
(16.0)
|
(9.1)
|
(31.3)
|
(35.7)
|
General and
administration – other
|
(15.0)
|
(9.7)
|
(13.1)
|
(48.6)
|
(48.5)
|
Foreign currency
exchange gain/(loss)
|
(1.3)
|
(0.9)
|
(8.6)
|
(6.7)
|
(14.9)
|
Other
income/(expense)
|
0.9
|
2.7
|
1.1
|
1.9
|
5.6
|
EBITDA (excluding
gain/(loss) on undesignated hedges and
impairment expense)
|
88.7
|
89.2
|
61.3
|
329.8
|
129.6
|
Depreciation and
amortization
|
(61.6)
|
(49.9)
|
(55.8)
|
(187.8)
|
(181.4)
|
Net interest expense
and finance costs
|
(3.4)
|
(2.9)
|
(2.5)
|
(11.6)
|
(11.1)
|
Earnings/(loss)
before income tax (excluding gain/(loss) on
undesignated hedges and impairment expense)
|
23.8
|
36.4
|
2.9
|
130.3
|
(63.0)
|
Income tax
benefit/(expense) on earnings
|
(17.7)
|
8.5
|
(10.2)
|
(30.7)
|
(11.4)
|
Earnings/(loss)
after income tax and before gain/(loss) on
undesignated hedges and impairment expense
|
6.1
|
44.9
|
(7.1)
|
99.7
|
(74.3)
|
|
Impairment
expense
|
(162.2)
|
-
|
-
|
(162.2)
|
(80.0)
|
|
Tax benefit on
impairment expense (4)
|
60.1
|
|
|
60.1
|
|
Write off
exploration/property expenditure / investment
(3)
|
-
|
-
|
-
|
(1.3)
|
(6.9)
|
Gain/(loss) on fair
value of undesignated hedges
|
-
|
-
|
15.3
|
-
|
15.0
|
Tax (expense) /
benefit on gain/loss on undesignated hedges
|
-
|
-
|
(4.3)
|
-
|
(4.2)
|
Net
Profit/(loss)
|
(96.0)
|
44.9
|
3.9
|
(3.7)
|
(150.4)
|
Basic earnings/(loss)
per share
|
$(0.14)
|
$0.06
|
$0.01
|
$(0.01)
|
$(0.24)
|
Diluted
earnings/(loss) per share
|
$(0.14)
|
$0.06
|
$0.01
|
$(0.01
|
$(0.24)
|
(1)
|
The Company did not
record any revenue or cost of sales from the Didipio mine during
the fifteen months ended 30 June 2021. In addition, General and
Administration – idle capacity charges reflect the non-production
costs related to maintaining Didipio's operational readiness to 31
October 2021 and related to the two-week shutdown of the New
Zealand operations required under National COVID-19
restrictions
|
(2)
|
Represents
production-based taxes in the Philippines, specifically excise tax,
local business and property taxes.
|
(3)
|
Represents write-off
of projects due to formal withdrawal from the Highland, Spring Peak
and Bravada joint venture activities.
|
(4)
|
There was an
impairment expense of $241 million recognised in relation to the
Haile Gold mine and a reversal of impairment of $78.8 million
related to Didipio.
|
Table 2 – Cash Flow Summary
Quarter ended 31 Dec 2021 (US$m)
|
Q4
31 Dec
2021
|
Q3
30 Sep
2021
|
Q4
31 Dec
2020
|
2021
|
2020
|
Cash flows from
Operating Activities
|
108.9
|
69.0
|
(1.6)
|
261.4
|
198.8
|
Cash flows used in
Investing Activities
|
(79.8)
|
(83.2)
|
(62.7)
|
(315.8)
|
(225.8)
|
Cash flows from /
(used) in Financing Activities
|
(6.3)
|
43.5
|
117.2
|
25.1
|
159.5
|
Operations
For the full year, OceanaGold achieved its consolidated
production and cost guidance. The Company produced 362,807 ounces
of gold and 2,323 tonnes of copper. Gold production was
approximately 20% higher over 2020 due to significant year-on-year
record gold output at Haile, the successful re-start and continued
ramp-up of operations at Didipio and Martha Underground at Waihi,
which was partially offset by lower head grades and mill feed from
Macraes. Fourth quarter consolidated production was 106,591 ounces
of gold, an approximate 35% quarter-on-quarter increase on the back
of a greater output from the New
Zealand operations and increasing production contribution
from Didipio.
On a consolidated basis, the Company recorded an AISC of
$1,247 per ounce on gold sales of
381,562 ounces and copper sales of 5,104 tonnes. Fourth quarter
consolidated AISC was $1,326 per
ounce on gold sales of 105,336 ounces and copper sales of 1,748
tonnes. AISC was similar year-on-year with higher sales being
offset by increased sustaining capital investments. The Company's
AISC increased 10% quarter-on-quarter on higher cash costs and
sustaining capital, which was partially offset by higher gold
sales.
Financial
Full year 2021 revenue was $744.7
million, a 49% increase over the previous year related to
higher sales volumes from Haile and Waihi, as well as Didipio in
the second half following the renewal of the Financial or Technical
Assistance agreement ("FTAA") in mid-July leading to the sale of
the gold doré and copper-gold concentrate inventory, additional
sales from new production and a higher average gold price received.
Fourth quarter revenue of $208.5
million was similar to the previous quarter, with increased
gold sales from Haile and Macraes and slightly higher average gold
price received partially offset by lower sales at Didipio following
the sale of gold doré and the majority of the copper-gold
concentrate inventory in the third quarter.
EBITDA for the full year 2021 was $329.8
million, reflecting a 154% increase year-on-year on a higher
average gold price received, record gold sales from Haile,
contributions from Didipio and higher sales at Waihi, partially
offset by lower sales at Macraes and higher costs. Fourth quarter
EBITDA was $88.7 million which was
similar to the previous quarter.
Full year 2021 Adjusted earnings after tax (excluding
Didipio idle capacity costs, net impairment and once-off tax
adjustment related to the Haile technical review) was $141.0 million or $0.20 per share compared with a loss after tax
(excluding impairment and gains/losses on undesignated hedges) of
$74.3 million in the prior year. This
was mainly due to higher revenue from increased sales at Didipio
and Haile and a higher average gold price received. Fourth quarter
Adjusted earnings after tax (excluding final Didipio idle capacity
costs, net impairment and once-off tax adjustment related to the
Haile technical review) was $29.3
million, or $0.04 per
share.
Cash flows from operating activities were $261.4 million for the full year 2021, including
$108.9 million in the fourth quarter
which was 58% above the third quarter, and is mainly attributable
to favourable working capital movements.
Cash flows used in investing activities totalled $315.8 million for the full year 2021, which was
40% above the prior year, driven by higher growth capital
investments at Haile related to the expansion of waste storage
facilities, the Golden Point Underground development at Macraes,
and the ongoing development of Martha Underground at Waihi.
Fully diluted cash flow per share before working capital
movements and exclusive of gold prepayments was $0.13 in the fourth quarter and $0.47 for the full year 2021.
As of December 31, 2021, the
Company's revolving credit facilities remained drawn to
$250 million with $30 million undrawn. At the end of the fourth
quarter, the Company had available liquidity of $163 million, including $133 million in cash. The Company generated
$9 million in free cash flow during
the quarter. The Company's net debt position was $237.9 million, a decrease from the previous
quarter of $256.5 million due to the
increased cash balance.
Consolidated capital expenditure in the fourth quarter of 2021
was $78.3 million, a 14% decrease
quarter-on-quarter, primarily related to lower pre-stripping and
growth capital invested, partially offset by higher general
operating and exploration capital investments. For the full year,
consolidated capital investment totalled $333.9 million, a 25% increase year-on-year and
due primarily to increased pre-stripping capital investment,
particularly at Haile. Growth capital invested in 2021 was
primarily in waste storage facilities at Haile, ongoing development
of the Martha Underground at Waihi and development of the Golden
Point Underground at Macraes.
Exploration capital expenditure totalled $6.6 million for the fourth quarter and focused
primarily on infill and extensional drilling at MUG, expansion
drilling at WKP, and resource conversion at Golden Point
Underground mine.
Table 3 – Consolidated Capital Expenditures
Quarter ended 31
Dec 2021
(US$m)
|
Q4
31 Dec
2021
|
Q3
30 Sep
2021
|
Q4
31 Dec
2020
|
2021
|
2020
|
General Operations
Capital
|
11.0
|
6.5
|
6.7
|
32.5
|
28.0
|
Pre-strip and
Capitalised Mining
|
30.4
|
39.1
|
12.9
|
116.4
|
65.8
|
Growth Capital
(including corporate capital)
|
30.3
|
39.9
|
46.2
|
160.5
|
150.4
|
Exploration
|
6.6
|
5.8
|
5.9
|
24.6
|
22.7
|
Capital and
exploration expenditure
|
78.3
|
91.2
|
71.7
|
333.9
|
266.9
|
Table 4 – Asset by Asset Capital Expenditures
Quarter ended 31
Dec 2021 (US$m)
|
Haile
|
Didipio
|
Waihi
|
Macraes
|
General
Operations
|
2.1
|
2.7
|
-
|
6.3
|
Pre-strip and
Capitalised Mining
|
21.0
|
0.2
|
7.7
|
1.5
|
Growth
Capital
|
20.0
|
0.4
|
6.5
|
2.2
|
Exploration
|
0.9
|
-
|
3.5
|
2.1
|
Capital and
exploration expenditure
|
44.0
|
3.2
|
17.7
|
12.1
|
Full Year 2021
(US$m)
|
Haile
|
Didipio
|
Waihi
|
Macraes
|
General
Operations
|
10.4
|
3.3
|
-
|
18.7
|
Pre-strip and
Capitalised Mining
|
65.6
|
0.2
|
13.7
|
36.9
|
Growth
Capital
|
92.9
|
0.5
|
47.7
|
12.7
|
Exploration
|
3.0
|
-
|
12.9
|
8.6
|
Capital and
exploration expenditure
|
171.9
|
4.0
|
74.3
|
76.9
|
Notes:
- Capital expenditure is presented on an accruals basis and
excludes fourth quarter rehabilitation and closure costs of
$1.0 million at Reefton.
- Capital and exploration expenditure by location includes
related regional greenfield exploration where applicable. Corporate
capital projects not related to a specific operating region are
excluded; these totaled $0.3 million
in the fourth quarter.
Outlook
On a consolidated basis, the Company expects to produce between
445,000 to 495,000 ounces of gold in 2022 representing a 30%
year-on-year increase in production from the midpoint. Gold
production is expected to increase to between 490,000 and 530,000
ounces in 2023 and to between 580,000 and 620,000 ounces in 2024,
approximately 60% higher than in 2021.
Consolidated 2022 AISC guidance ranges from $1,275 and $1,375
per ounce sold while cash costs are expected to range between
$675 and $775 per ounce sold. AISC and cash costs are
expected to between $1,150 and
$1,300 per ounce sold in 2023 and
between $1,000 and $1,150 per ounce sold in 2024.
Production over the course of 2022 is expected to be weighted
evenly between the first half and the second half with the first
and fourth quarters expected to deliver the largest amount of gold
production at corresponding lower AISC. Capital investment is
expected to be skewed slightly to the second half of the year
related to increasing investment in the Haile underground and site
infrastructure. The timing of this capital could shift depending on
receipt of the Supplemental Environmental Impact Statement
("SEIS").
Ramp-up of the Didipio operation continues to progress ahead of
schedule and the Company now expects to reach full production rates
in early in the second quarter 2022. As a result, the Company
expects gold and copper production to near full production rates
for most of this year. In 2022, Didipio is expected to produce
between 100,000 and 110,000 ounces of gold along with 11,000 to
13,000 tonnes of copper. For the full year, Didipio's by-product
AISC is expected to range between $500 to $600 per
ounce sold, while by-product cash costs are expected to range
between $350 to $450 per ounce sold.
At Haile, production is expected to be between 150,000 ounces
and 160,000 ounces at a cash cost of $575 to $675 per
ounce sold and a site AISC of $1,500
to $1,600 per ounce sold. Haile's
2022 production profile is evenly weighted between the first half
and second half however, first and fourth quarter production is
expected to be materially higher than the second and third
quarters. AISC is expected to correspond to quarterly sales volumes
and be highest in the second and third quarters. Capital
investments are expected to be the highest through the second and
third quarters also, based on the Company receiving the SEIS and
associated permits in the first half. Approximately $35 to $40 million
in sustaining and $30 to $35 million growth capital for 2022 is contingent
on receipt of the SEIS, with the start of spend expected in the
second quarter.
In 2022, Macraes is expected to produce between 140,000 and
155,000 ounces of gold at an AISC of $1,300 to $1,400
per ounce sold and cash costs of $800
to $900 per ounce sold. The wider
production guidance range reflects uncertainty related to potential
COVID-19 restrictions. Production for the year is expected to be
evenly distributed quarter on quarter.
Capital requirement at Macraes for 2022 is principally related
to sustaining capital, with growth capital mainly related to the
Golden Point Underground ("GPUG") and expansionary drilling. For
the remainder of the year, the operation will source from multiple
open pits and from both Frasers Underground and GPUG which will
continue to ramp-up over the next two years. GPUG development
advance rates are steadily increasing to approximately 600 metres
(m") per month by the end of the second quarter, ahead of stoping
which is due to commence in the third quarter. A full development
advance rate of an estimated 800 metres per month is expected by
the end of the year. By the start of 2023, GPUG anticipates
producing on average 80,000 tonnes of ore per month and will become
the primary source of underground ore at Macraes.
At Waihi, the operation is expected to produce between 55,000
and 70,000 ounces of gold, a significant increase over 2021. This
is related to additional mine faces brought online at Martha
Underground. The Company has elected to use a wider guidance range
for the Waihi (and Macraes) operation because of continued risks
related to COVID-19 as the New
Zealand government continues to seek to supress cases with
international borders expected to remain closed until at least
mid-2022 plus ongoing discrepancies between mined grades and the
resource model. The Company will continue to progress resource
definition and grade control drilling to update the resource model.
Consolidated AISC is expected to range between $1,375 and $1,475
per ounce sold with cash costs between $950 and $1,050 per
ounce sold. Production in the second half of the year is expected
to be stronger than in the first half with the fourth quarter
expected to be the strongest quarter of production at a lower
corresponding AISC.
2021 Full Year Results Webcast
The Company will host its 2021 Full Year Results Webcast at
5:30pm on Wednesday February 23, 2022
(Toronto, Eastern Standard Time) /
9:30am on Thursday February 24, 2022
(Melbourne, Eastern Daylight
Time).
Webcast Participants
To register, please copy and paste the link below into your
browser:
https://produceredition.webcasts.com/starthere.jsp?ei=1521715&tp_key=751b08e415
Teleconference Participants (required for those who wish to
ask questions)
Local (toll free) dial in numbers are:
Canada & North America: 1 888 390 0546
Australia: 1 800 076 068
New Zealand: 0 800 453 421
United Kingdom: 0 800 652
2435
Switzerland: 0 800 312 635
Germany: 0 800 724 0293
All other countries (toll): + 1 416 764 8688
If you are unable to attend the call, a recording will be
available for viewing on the Company's website.
Authorised for release to market by OceanaGold Corporate Company
Secretary, Liang Tang.
About OceanaGold
OceanaGold is a multinational gold producer committed to the
highest standards of technical, environmental, and social
performance. For 30 years, we have been contributing to excellence
in our industry by delivering sustainable environmental and social
outcomes for our communities, and strong returns for our
shareholders.
Our global exploration, development, and operating experience
has created a significant pipeline of organic growth opportunities
and a portfolio of established operating assets including Didipio
Mine in the Philippines; Macraes
and Waihi operations in New
Zealand; and Haile Gold Mine in the United States of America.
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, achievement of
guidance, execution of business strategy, future growth, future
production, 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, 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
statements of historical fact and may be forward-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
statements and information. They include, among others, the
outbreak of an infectious disease, 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 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.
SOURCE OceanaGold Corporation