Achieves Record EBITDA and Strong Free Cash
Flow
(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, Australia, April 28,
2022 /CNW/ - OceanaGold Corporation (TSX: OGC) (ASX:
OGC) ("OceanaGold" or the "Company") reported its financial and
operational results for the quarter ended March 31, 2022. 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
- Produced 134,035 ounces of gold, a 26% increase
quarter-on-quarter.
- Consolidated All-In Sustaining Costs ("AISC") for the quarter
of $1,084 per ounce on gold sales of
129,191 ounces.
- Record quarterly revenue of $286
million and record quarterly EBITDA of $158 million.
- Net profit after tax of $79
million or $0.11 per share
fully diluted.
- Generated $63 million in free
cash flow.
- Net debt, inclusive of equipment leases, reduced by 29% quarter
on quarter to $168m with a resulting
leverage ratio of 0.40 times and period-end gearing of 9%.
- Haile delivered record quarterly gold production of 60,249
ounces.
- Didipio achieved full underground mining rates in March, and in
the quarter produced 29,446 ounces of gold and 3,510 tonnes of
copper at first quartile All-In Sustaining Costs of $40 per ounce sold.
- Wharekirauponga ("WKP") Indicated Resource increased 53% to 1.5
million tonnes ("Mt") at 13.5 g/t gold for 0.64 million ounces
("Moz") gold including 1.27 Moz silver. Inferred Resources of 2.3
Mt at 9.4 g/t gold for 0.7 Moz of gold including 1.6 Moz of silver,
presenting a significant opportunity for further resource
conversion.
- Gerard Bond commenced as
President and Chief Executive Officer on April 4, 2022.
- Reaffirm full year consolidated guidance of 445,000 to 495,000
ounces of gold and 11,000 to 13,000 tonnes of copper, at an AISC of
$1,275 to $1,375 and cash costs between $675 to $775 per
ounce sold.
Gerard Bond, President and CEO of
OceanaGold, said "OceanaGold has started the year strongly with the
first quarter safely delivering record quarterly revenue and EBITDA
and significant Free Cash Flow. This strong Free Cash Flow
generation allowed us to achieve a 29% reduction in net debt and
reduce our leverage ratio to 0.40 times. Our stronger balance sheet
puts us in a solid financial position from which we can invest in
attractive growth projects to create value for our
shareholders."
"This quarter's performance was underpinned by record quarterly
gold production at our Haile operation in the United States and a very strong first
quarter of full production at our Didipio operations in
the Philippines. At Haile, we are
continuing to see the benefits of operational and productivity
improvements that began in mid-2021. At Didipio, the operation
achieved full underground mining rates at the end of the first
quarter, ahead of schedule by nearly one quarter."
"Though there is a lot to celebrate in the quarterly results, we
also know that there is a lot of work ahead of us to fully optimise
the potential of the business. At Waihi, poor grade reconciliation
at Martha underground had an impact on its quarterly performance. A
grade control drill programme is currently underway to deliver
improved resource definition and allow for more optimal mine
planning and stope sequencing, which we expect will improve the
performance of this orebody and mining operation overall."
"We also have a pipeline of organic growth projects that have
the potential to create additional value for shareholders.
Once we commence development of the underground mine at Haile, we
believe we will begin to unlock the true upside potential of this
orebody. Looking further ahead, Wharekirauponga ("WKP") has
the potential to be a significant, high-grade mine within our
portfolio."
"We remain focused on safely and responsibly delivering on our
production guidance for 2022, maximising Free Cash Flow generation
and progressing the attractive growth options in our portfolio."
said Mr Bond.
Table 1 – Production and Cost Results
Summary
Quarter ended 31 March 2022
|
|
Haile
|
Didipio
|
Waihi
|
Macraes
|
Consolidated
|
Q1 2022
|
Q1 2021
|
Gold
Produced
|
koz
|
60.2
|
29.4
|
6.8
|
37.6
|
134.0
|
83.2
|
Gold Sales
|
koz
|
54.5
|
29.8
|
6.6
|
38.2
|
129.2
|
82.8
|
Average Gold
Price
|
US$/oz
|
1,910
|
1,972
|
1,868
|
1,887
|
1,915
|
1,786
|
Copper
Produced
|
kt
|
-
|
3.5
|
-
|
-
|
3.5
|
-
|
Copper
Sales
|
kt
|
-
|
3.7
|
-
|
-
|
3.7
|
-
|
Average Copper
Price
|
US$/lb
|
-
|
4.89
|
-
|
-
|
4.89
|
-
|
|
|
|
|
|
|
|
|
Material
Mined
|
kt
|
9,613
|
513
|
235.8
|
11,684
|
22,047
|
22,622
|
Waste
Mined
|
kt
|
8,650
|
28
|
161.5
|
9,233
|
18,072
|
20,250
|
Ore Mined
|
kt
|
964
|
486
|
74.3
|
2,451
|
3,974
|
2,372
|
Mill Feed
|
kt
|
869
|
872
|
73.3
|
1,461
|
3,275
|
1,957
|
Mill Feed
Grade
|
g/t
|
2.54
|
1.18
|
3.08
|
1.00
|
1.50
|
1.57
|
Gold
Recovery
|
%
|
84.7
|
89.3
|
92.9
|
80.0
|
84.0
|
83.9
|
|
|
|
|
|
|
|
|
Cash Costs
|
US$/oz
|
567
|
26
|
1,692
|
1,005
|
630
|
800
|
Site AISC
(1)
|
US$/oz
|
1,070
|
40
|
2,950
|
1,394
|
1,084
|
1,229
|
(1) Site AISC are exclusive
of Corporate general and administrative expenses., Consolidated
AISC is inclusive of Corporate general and administrative expenses.
Cash Costs and All-In Sustaining Costs are reported on ounces sold
and net of by-product credits.
|
Table 2 – Financial Summary
Quarter ended 31 Mar 2022
(US$m)
|
Q1
31 Mar 2022
|
Q4
31 Dec
2021
|
Q1
31 Mar
2021
|
Revenue
|
285.7
|
208.5
|
148.9
|
Cost of sales,
excluding depreciation and amortization
|
(114.4)
|
(98.7)
|
(66.7)
|
General and
administration – indirect taxes (2)
|
(4.5)
|
(1.8)
|
(0.1)
|
General and
administration – idle capacity charges (1)
|
-
|
(3.9)
|
(4.5)
|
General and
administration – other
|
(11.1)
|
(15.0)
|
(12.6)
|
Foreign currency
exchange gain/(loss)
|
1.9
|
(1.3)
|
(2.4)
|
Other
income/(expense)
|
0.4
|
1.0
|
0.4
|
EBITDA (excluding impairment
expense)
|
158.0
|
88.7
|
62.0
|
Depreciation and
amortization
|
(55.3)
|
(61.6)
|
(36.3)
|
Net interest expense
and finance costs
|
(2.8)
|
(3.4)
|
(2.7)
|
Earnings before income tax (excluding impairment
expense)
|
99.9
|
23.8
|
23.0
|
Income tax expense on
earnings
|
(18.1)
|
(17.7)
|
(5.7)
|
Earnings after income tax (excluding impairment
expense)
|
81.8
|
6.1
|
17.3
|
Impairment
expense (4)
|
-
|
(162.2)
|
-
|
Tax benefit on
impairment expense
|
-
|
60.1
|
-
|
Write off
exploration/property expenditure / investment
(3)
|
(3.2)
|
-
|
(1.3)
|
Net Profit/(loss)
|
78.6
|
(96.0)
|
16.0
|
Basic earnings/(loss)
per share
|
$0.11
|
$(0.14)
|
$0.02
|
Diluted earnings/(loss)
per share
|
$0.11
|
$(0.14)
|
$0.02
|
|
|
|
|
|
|
|
(1)
|
The Company did not
record any revenue or cost of sales from the Didipio mine during
the quarter ended 31 March 2021. General and Administration – idle
capacity charges reflect the non-production costs related to
maintaining Didipio's operational readiness to 31 October
2021.
|
(2)
|
Represents
production-based taxes in the Philippines, specifically excise tax,
local business and property taxes.
|
(3)
|
There was a write-off
of exploration projects in New Zealand as at 31 March
2022.
|
(4)
|
There was an impairment
expense of $241 million recognised related to the Haile Gold mine
and a reversal of impairment of $78.8 million related to
Didipio.
|
Table 3 – Cash Flow Summary
Quarter ended 31 Mar 2022
(US$m)
|
Q1
31 Mar
2022
|
Q4
31 Dec
2021
|
Q1
31 Mar
2021
|
Cash Flow from
Operating Activities
|
143.8
|
108.9
|
47.6
|
Cash Flows used in
Investing Activities
|
(71.9)
|
(79.8)
|
(71.9)
|
Cash Flow used in
Financing Activities
|
(8.7)
|
(6.3)
|
(6.7)
|
Free Cash
Flow
|
63.2
|
22.8
|
(31.0)
|
Operations
The Company produced 134,035 ounces of gold and 3,510 tonnes of
copper in the first quarter of 2022, representing a 26% increase in
gold production compared to the previous quarter and a 61% increase
when compared to the first quarter of 2021. The stronger quarterly
production was driven by record quarterly production at Haile and a
solid quarter of production at Didipio, partially offset by
decreased production at Waihi.
On a consolidated basis, the Company recorded an AISC of
$1,084 per ounce on gold sales of
129,191 ounces and copper sales of 3,711 tonnes. AISC was 18% lower
quarter-on-quarter with the benefits from a full quarter of
operations at Didipio partially offset by increased sustaining
capital investments. The Company's AISC decreased 14% when compared
to the first quarter of 2021, also due primarily to the inclusion
of a full quarter of operations at Didipio.
Haile delivered 60,249 ounces of gold, representing a record
quarter for production. This represents an increase of 42%
quarter-on-quarter and was mainly driven by increased mill feed,
higher head grade and better gold recoveries. Year-on-year, this
represents a 36% increase in production, resulting from higher mill
feed, grade, and recovery. The higher grades were driven by ore
sourced from Ledbetter Phase 1. First quarter AISC at Haile was
$1,070 and cash costs were
$567 per ounce sold.
The Company expects the Supplemental Environmental Impact
Statement ('SEIS') Final Record of Decision and receipt of
subsequent operating permits to occur in the second quarter of
2022. The permits are necessary to allow underground mine
development and expansion of the operating footprint to accommodate
the construction of future PAG waste storage facilities and to
allow increased water discharge rates. As previously guided, the
ongoing delay in the receipt of the SEIS decision and associated
permits continues to impact productivity at Haile, where mining
rates are limited by additional material and water re-handling,
reducing output and increasing costs. Upon receipt of the necessary
permits, the Company expects an improvement in operational
efficiencies and lower mining unit costs to be delivered
progressively over a two-year period. An updated National
Instrument ("NI") 43-101 Technical Report for Haile was released
31 March 2022. The recently completed
technical review assumed receipt of the necessary permits related
to the SEIS by the end of the second quarter of 2022.
Didipio produced 29,446 ounces of gold and 3,510 tonnes of
copper, reflecting a 98% increase in gold production and 51%
increase in copper production quarter-on-quarter. This represents
the first full quarter of operations since the restart of
production in November 2021. The
underground mine achieved full mining rates at the end of the first
quarter, ahead of schedule. Didipio's first quarter AISC and cash
costs were $40 per ounce sold and
$26 per ounce sold respectively. An
updated NI 43-101 Technical Report for Didipio was released
31 March 2022.
Macraes produced 37,588 ounces of gold in the first quarter, a
slight increase quarter-on-quarter and a 9% increase from the first
quarter of 2021. Relative to the prior quarter, production
increased on higher average head grade that was partially offset by
lower mill feed and reduced gold recoveries. Macraes' first quarter
AISC and cash costs were $1,394 and
$1,005 per ounce sold
respectively.
Waihi produced 6,752 ounces of gold in the first quarter, 43%
lower quarter-on-quarter and 56% higher than the first quarter of
2021. The quarter-on-quarter decrease in production was attributed
to lower ore tonnes and grade mined from Martha Underground, where
mining was in areas of the resource with low resource definition
and under-reconciled to the resource model in both grade and tonnes
of ore. The Company estimates the under reconciliation accounted
for approximately half of the negative impact during the quarter,
with poor ground conditions in parts of the orebody and reduced
workforce availability due to COVID-19 isolations also contributing
factors. Results from the accelerated grade control drill program
continued to update the resource models currently being used for
mine planning. Grade control drilling to support mining for the
remainder of 2022 and 2023 is expected to be completed
progressively across the second and third quarters of 2022. This
program is expected to better inform the detailed mine planning and
design process, optimise the stoping sequence, reduce ore loss and
deliver improved performance.
Preparation for the lodgement of a consent application for the
Waihi North Project, inclusive of WKP, continued to progress with
environmental assessments nearing completion. The Company expects
to lodge its formal consenting application, inclusive of
stakeholder feedback, in the second quarter of 2022. The critical
path for first production from the Waihi North Project remains the
consenting process.
Financial
The Company reported record quarterly revenue of $285.7 million, reflecting a 37% increase
quarter-on-quarter. The Company reported record quarterly EBITDA in
the first quarter of $158 million,
reflecting a 78% increase quarter-on-quarter on stronger gold sales
volumes from Haile, Didipio and Macraes and higher average gold and
copper prices received and lower unit costs, partially offset by
lower sales at Waihi. First quarter 2022 EBITDA was 155% higher
than the first quarter of 2021 related to resumption of operations
at Didipio and increased gold prices.
First quarter 2022 adjusted earnings after tax were $81.8 million or $0.11 per share which compared to $29.3 million in the fourth quarter of 2021 and
$17.3 million in the first quarter of
2021.
Cash flows from operating activities for the first quarter of
$143.8 million exceeded the
comparative quarters, driven by stronger EBITDA though partially
offset by unfavourable working capital movements. Operating cash
flow per share before working capital movements was $0.22 in the first quarter.
The Company generated $63.2
million in free cash flow during the first quarter. As at
the end of the first quarter Net Debt including equipment leases
was $168.4m, which was $69.5m or 29% lower than at the end of
December 2021. The Company had
immediately available liquidity of $224.7
million, including $194.7
million in cash.
Conference Call
The Company will host a conference call / webcast to discuss the
first quarter results at 7:30 am on Friday
April 29, 2022 (Australian Eastern Standard Time) / 5:30 pm
on Thursday April 28, 2022
(Toronto, Eastern Daylight
Time).
Webcast Participants
To register, please copy and paste the link below into your
browser:
https://produceredition.webcasts.com/starthere.jsp?ei=1539065&tp_key=bc1166f656
Teleconference Participants
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
All other countries (toll): + 1 416 764 8688
Playback of Webcast
If you are unable to attend the call, a recording will be
available for viewing on the Company's website.
Authorised for release to the market by Company Secretary,
Liang Tang.
www.oceanagold.com | Twitter: @OceanaGold
About OceanaGold
OceanaGold is a multinational gold producer committed to the
highest standards of technical, environmental and social
performance. For 31 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 an industry-leading 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.
Technical Disclosure
All Mineral Reserves and Mineral Resources have been calculated
and prepared in accordance with the standards set out in the
Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves dated December
2012 (the "JORC Code") and in accordance with National
Instrument 43-101 of the Canadian Securities Administrators ("NI
43-101"). The JORC Code is the accepted reporting standard for the
Australian Stock Exchange Limited ("ASX").
Mineral Resources for Waihi's Wharekirauponga Underground have
been reviewed and approved by J Moore, who is an employee of
OceanaGold Corporation, and is a "qualified person" for the
purposes of NI 43-101. Mr Moore has sufficient experience
relevant to the style of mineralisation and type of deposit under
consideration and to the activity which they are undertaking to
qualify as a "competent person" as defined in the JORC Code.
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 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 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