/NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES AND NOT FOR DISTRIBUTION TO
US NEWSWIRE SERVICES./
(All figures in US Dollars unless otherwise stated)
MELBOURNE, July 30, 2014 /CNW/ - OceanaGold Corporation
(TSX: OGC, ASX: OGC, NZX: OGC) (the "Company") released its
second quarter 2014 financial and operational results for the
quarter ending June 30, 2014.
Details of the consolidated financial statements and the Management
Discussion and Analysis ("MDA") are available on the Company's
website at www.oceanagold.com
Key Highlights
- Consolidated first half 2014 production of 147,399 ounces of
gold and 11,185 tonnes of copper including 60,831 ounces of gold
and 4,706 tonnes of copper in the second quarter.
- Consolidated first half 2014 sales of 166,344 ounces of gold
and 12,925 tonnes of copper at All-In Sustaining Costs of
$779 per ounce sold net of by-product
credits.
- Consolidated sales of 72,294 ounces of gold and 5,173 tonnes of
copper at cash costs of $778 per
ounce sold in the second quarter.
- Revenue of $297.8 million in the
first half 2014 including $127.5
million in the second quarter and first half net profit of
$56.8 million including second
quarter net loss of $2.1
million.
- First half 2014 free cash flow generation of $71 million including $22
million in the second quarter.
- Strengthened balance sheet through bank debt repayment of
$10 million in the second quarter and
increased available liquidity to $128.4
million, including $46.2
million in cash.
- Successfully refinanced the corporate debt facilities with the
existing banking syndicate into a $200
million revolving credit facility with competitive fiscal
terms and maturing in June 2017.
- On track for full year production and cost guidance.
The Company recorded first half of 2014 production of 147,399
ounces of gold and 11,185 tonnes of copper. As previously guided,
the Company's second quarter production results were expected due
to of lower grades processed across its operations and to lower
mill feed at Didipio. In the first half of 2014, consolidated cash
costs net of by-product credits were $435 per ounce while consolidated All-In
Sustaining Costs ("AISC") net of by-product credits were
$779 per ounce on sales of 166,344
ounces gold and 12,925 tonnes copper.
The Company reported revenue of $297.8
million for the first half of 2014 including $127.5 million in the second quarter. Net
earnings for the first half of 2014 were $56.8 million, which included a net loss of
$2.1 million in the second quarter.
The net loss is attributable to lower revenue from lower overall
sales and higher cost of sales in New
Zealand due to a higher New
Zealand dollar and a drawdown of inventory and
gold-in-circuit. In the first half of 2014, the Company generated
approximately $71 million in free
cash flow including $22 million in
the second quarter. During the quarter, the Company repaid
$10 million in core debt and
increased its cash position to $46
million. In the last eighteen months, the Company has repaid
approximately $94 million in core
debt.
In the Philippines, the Didipio
operation produced 45,266 ounces of gold and 11,185 tonnes of
copper in the first half of 2014 including 14,786 ounces of gold
and 4,706 tonnes of copper in the second quarter. As previously
guided, the decrease in production from the first quarter was a
result of mine sequencing whereby lower grade ore was mined from
Stage 3 of the open pit. Additionally, mill feed was lower due to a
planned process plant shut down for maintenance and debottlenecking
activities. Production is expected to increase in the third quarter
and beyond as the mining operation advances Stage 3 of the open pit
into a higher grade zone of the ore body.
During the quarter, the Didipio optimisation study advanced well
and is expected to be completed by the end of the third quarter.
The third stage of the Tailings Storage Facility ("TSF") and the
water treatment plant were completed in the second quarter.
Debottlenecking activities to achieve the planned 3.5 Mtpa
throughput rate by the end of 2014 included the installation of a
third-stage tailings delivery pump, construction of a new tailings
line and completion of the pebble crusher foundation.
In New Zealand, gold production
for the first half of 2014 was 102,133 ounces including 46,045
ounces in the second quarter. The quarter on quarter decrease was a
result of lower grade ore mined and processed across the
New Zealand operations and to
lower mill feed at Reefton. Consolidated New Zealand cash costs were $843 per ounce on 112,334 ounces sold in the
first half of 2014 and $1,114 per
ounce on 54,548 ounces sold in the second quarter. The increase in
cash costs from the first quarter was due mainly to lower sales, a
higher New Zealand dollar and a
drawdown of ore inventories and gold-in-circuit.
Near the end of the second quarter at the Reefton operation,
geotechnical instability of one of the pit walls temporarily
affected access in the open pit resulting in less ore being mined
and available for processing. Reduced ore feed will continue in the
third quarter while an alternate access in the open pit is
established. As a result, production at Reefton for the third
quarter and full year will be lower than expected. The mine plan
has been revised and as a result the Company expects a slight
increase in the life of mine production at Reefton and the
operation will remain cash flow positive including rehabilitation
costs under its revised mine plan.
Mick Wilkes, Managing Director
and CEO commented, "We had a strong start to the first half of the
year with free cash flow generation of $71
million including $22 million
in the second quarter despite a lower quarter for production." He
added, "At our Didipio operation, we are currently mining and
processing higher grade ore while advancing the optimisation study
which we expect will be completed by the end of the third quarter.
In New Zealand, geotechnical
issues at Macraes and Reefton in the second quarter have resulted
in changes to the mine plan at each of these operations however, we
expect no major long-term impacts."
Mr. Wilkes added, "The Company is well on track to achieve its
2014 guidance and we will continue to strengthen the balance sheet
through further debt repayments this year. We remain focused on
enhancing shareholder wealth and positioning the Company for new
value-add opportunities. Our commitment to our stakeholders remains
steadfast and we will continue to work closely with them."
Conference Call and Webcast
The Company will host a conference call / webcast to discuss its
first half and second quarter 2014 financial and operating results.
The call will take place at 7:30am on
Thursday July 31 (Melbourne, Australia time) / 5.30pm on Wednesday July
30 2014 (Toronto, Canada
time).
Webcast Participants
To register, please copy and paste the link below into your
browser:
http://event.on24.com/r.htm?e=815829&s=1&k=38F45E73D478DDD1B06432E0DD387A17
Teleconference Participants (required for those who wish to
ask questions)
Local (toll free) dial in numbers are:
Australia: 1 800 157 854
New Zealand: 0 800 441 025
Canada & North America: 1 888 390 0546
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 from 11:30am on Thursday 31
July 2014 (Melbourne,
Australia time) / 7.30pm on
Wednesday 30 July 2014
(Toronto, Canada time).
About OceanaGold
OceanaGold Corporation is a significant multinational gold
producer with mines located on the South Island of New Zealand and in the Philippines. The Company's assets
encompass New Zealand's largest
gold mining operation at the Macraes goldfield in Otago which is
made up of the Macraes Open Pit and the Frasers Underground mines.
Additionally, on the west coast of the South Island, the Company
operates the Reefton Open Pit mine. OceanaGold's Didipio Mine in
northern Luzon, Philippines
commenced commercial production on 1 April
2013 and is expected to produce 100,000 ounces of gold and
14,000 tonnes of copper per year on average over the next 15 years.
In 2014, the Company expects to produce 275,000 to 305,000 ounces
of gold from the combined New
Zealand and Philippine operations and 21,000 to 24,000
tonnes of copper from the Philippine operations.
OceanaGold is listed on the Toronto, Australian and New Zealand stock exchanges under the symbol
OGC.
Cautionary Statement for Public Release
Certain information contained in this public release, including
any information relating to the Company's future financial or
operating performance 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 future growth, 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 such as
production forecasts are subject to a variety of risks and
uncertainties which could cause actual events, performance,
achievements or results to differ materially from those expressed
in the forward-looking statements. 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. Such
forward-looking statements 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. Some of these risks and
uncertainties include: general economic and market factors
(including changes in global, national or regional financial
credit, currency or securities markets); changes or developments in
global, national or regional political conditions (including any
act of terrorism or war); changes in laws (including tax laws) and
changes in GAAP or regulatory accounting requirements; fluctuations
in the price of gold; inability to obtain required consents,
permits or approvals; and other risk factors as outlines in the
Company's annual and interim filings. Readers are cautioned that
the foregoing list of factors is not exhaustive. Although the
Company believes that any forward-looking 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 information, whether as a
result of new information, events or otherwise, except as required
by applicable securities laws. All forward looking information
contained in this public release is qualified by this Cautionary
Statement. The information contained in this release is not
investment or financial product advice.
Second Quarter 2014 Results
July 30, 2014
www.oceanagold.com
Management Discussion and Analysis Report for the Second
Quarter ended June 30, 2014
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION IN
MANAGEMENT DISCUSSION & ANALYSIS
This Management Discussion & Analysis contains
"forward-looking statements and information" within the meaning of
applicable securities laws which may include, but is not limited
to, statements with respect to the future financial and operating
performance of the Company, its subsidiaries and affiliated
companies, its mining projects, the future price of gold, the
estimation of mineral reserves and mineral resources, the
realisation of mineral reserve and resource estimates, costs of
production, estimates of initial capital, sustaining capital,
operating and exploration expenditures, costs and timing of the
development of new deposits, costs and timing of the development of
new mines, costs and timing of future exploration and drilling
programs, timing of filing of updated technical information,
anticipated production amounts, requirements for additional
capital, governmental regulation of mining operations and
exploration operations, timing and receipt of approvals, consents
and permits under applicable mineral legislation, environmental
risks, title disputes or claims, limitations of insurance coverage
and the timing and possible outcome of pending litigation and
regulatory matters. Often, but not always, forward-looking
statements and information can be identified by the use of words
such as "may", "plans", "expects", "projects", "is
expected", "budget", "scheduled", "potential",
"estimates", "forecasts", "intends", "targets",
"aims", "anticipates" or "believes" or variations (including
negative variations) of such words and phrases, or may be
identified by statements to the effect that certain actions, events
or results "may", "could", "would", "should", "might" or "will" be
taken, occur or be achieved. Forward-looking statements and
information involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or
achievements of the Company and/or its subsidiaries and/or its
affiliated companies to be materially different from any future
results, performance or achievements expressed or implied by the
forward-looking statements. Such factors include, among others,
future prices of gold; general business, economic and market
factors (including changes in global, national or regional
financial, credit, currency or securities markets), changes or
developments in global, national or regional political and social
conditions; changes in laws (including tax laws) and changes in
GAAP or regulatory accounting requirements; the actual results of
current production, development and/or exploration activities;
conclusions of economic evaluations and studies; fluctuations in
the value of the United States
dollar relative to the Canadian dollar, the Australian dollar, the
Philippines Peso or the New
Zealand dollar; changes in project parameters as plans
continue to be refined; possible variations of ore grade or
recovery rates; failure of plant, equipment or processes to operate
as anticipated; accidents, labour disputes and other risks of the
mining industry; political instability or insurrection or war;
labour force availability and turnover; adverse judicial decision,
delays in obtaining financing or governmental approvals or in the
completion of development or construction activities or in the
commencement of operations; as well as those factors discussed in
the section entitled "Risk Factors" contained in the Company's
Annual Information Form in respect of its fiscal year-ended
December 31, 2013, which is available
on SEDAR at www.sedar.com under the Company's name. Although
the Company has attempted to identify important factors that could
cause actual actions, events or results to differ materially from
those described in forward-looking statements and information,
there may be other factors that cause actual results, performance,
achievements or events to differ from those anticipated, estimated
or intended. Also, many of the factors are outside or beyond the
control of the Company, its officers, employees, agents or
associates. Forward-looking statements and information contained
herein are made as of the date of this Management Discussion &
Analysis and, subject to applicable securities laws, the Company
disclaims any obligation to update any forward-looking statements
and information, whether as a result of new information, future
events or results or otherwise. There can be no assurance that
forward-looking statements and information will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking
statements and information due to the inherent uncertainty therein.
All forward-looking statements and information made herein are
qualified by this cautionary statement. This Management Discussion
& Analysis may use the terms "Measured", "Indicated" and
"Inferred" Resources. U.S. investors are advised that while such
terms are recognised and required by Canadian regulations, the
Securities and Exchange Commission does not recognise them.
"Inferred Resources" have a great amount of uncertainty as to their
existence and as to their economic and legal feasibility. It cannot
be assumed that all or any part of an Inferred Resources will ever
be upgraded to a higher category. Under Canadian rules, estimates
of Inferred Resources may not form the basis of feasibility or
other economic studies. U.S. investors are cautioned not to assume
that all or any part of Measured or Indicated Resources will ever
be converted into reserves. U.S. investors are also cautioned not
to assume that all or any part of an Inferred Resource exists, or
is economically or legally mineable. This document does not
constitute an offer of securities for sale in the United States or to any person that is, or
is acting for the account or benefit of, any U.S. person (as
defined in Regulation S under the United States Securities Act of
1933, as amended (the "Securities Act")) ("U.S. Person"), or in any
other jurisdiction in which such an offer would be unlawful.
Technical Disclosure
The Mineral Resources for Didipio were prepared by, or under the
supervision of, J. G. Moore, whilst
the Mineral Resources for Macraes and Reefton were prepared by S.
Doyle. The Mineral Reserves for Didipio were prepared under the
supervision of R.Corbett, while the Mineral Reserves for Macraes
and Reefton were prepared by, or under the supervision of, K
Madambi. C. Bautista is Exploration Manager for the
Philippines. S. Doyle, K. Madambi, and J. G. Moore are Members and Chartered
professionals with the Australasian Institute of Mining and
Metallurgy and each is a "qualified person" for the purposes of NI
43-101. R. Corbett is a Registered Professional Engineer
(Ontario) and is a "qualified
person" for the purposes of NI 43-101. C. Bautista is a member of
the AIG and is a "qualified person" for the purposes of NI 43-101.
Messrs Moore, Doyle, Corbett, Madambi and Bautista have sufficient
experience, which is relevant to the style of mineralisation and
type of deposits under consideration, and to the activities which
they are undertaking, to qualify as Competent Persons as defined in
the 2012 Edition of the "Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves" ("JORC
Code").
The resource estimates for the El Dorado Project were prepared
by Mr. Steven Ristorcelli, C.P.G.,
of Mine Development Associates, Reno,
Nevada (who is an independent Qualified Person as defined in
NI 43-101) and conforms to current CIM Standards on Mineral
Resources and Reserves.
For further scientific and technical information (including
disclosure regarding mineral resources and mineral reserves)
relating to the Reefton Project, the Macraes Project and the
Didipio Project please refer to the NI 43-101 compliant technical
reports available at sedar.com under the Company's name. For
further scientific and technical information (including disclosure
regarding mineral resources and mineral reserves) relating to the
El Salvador Project please refer to the reports publicly
available on SEDAR (www.sedar.com) prepared for Pacific
Rim.
HIGHLIGHTS
- Consolidated first half 2014 production of 147,399 ounces of
gold and 11,185 tonnes of copper including 60,831 ounces of gold
and 4,706 tonnes of copper in the second quarter.
- Consolidated first half 2014 sales of 166,344 ounces of gold
and 12,925 tonnes of copper at All-In Sustaining Costs of
$779 per ounce sold net of by-product
credits.
- Consolidated sales of 72,294 ounces of gold and 5,173 tonnes of
copper at cash costs of $778 per
ounce sold in the second quarter.
- Revenue of $297.8 million in the
first half 2014 including $127.5
million in the second quarter and first half net profit of
$56.8 million including second
quarter net loss of $2.1 million.
- First half 2014 free cash flow generation of $71 million including $22
million in the second quarter.
- Strengthened balance sheet through bank debt repayment of
$10 million in the second quarter
while increasing available liquidity to $128.4 million including $46.2 million in cash.
- Successfully refinanced the corporate debt facilities into a
$200 million revolving credit
facility with competitive fiscal terms and maturing in June 2017.
- Completed construction of a water treatment plant at
Didipio.
- On-track for full year production and cost guidance.
All statistics are compared to the corresponding 2013 period
unless otherwise stated.
OceanaGold has adopted USD as its presentation currency and all
numbers in this document are expressed in USD unless otherwise
stated.
1.
|
Cash costs, All-In
Sustaining Costs and EBITDA (earnings before interest, taxes,
depreciation and amortisation, excluding gain/(loss) on
undesignated hedges) are non GAAP measures. Refer to page 19 for
explanation of non GAAP measures.
|
OVERVIEW
Operating and Financial Results
Consolidated production was 147,399 ounces of gold and 11,185
tonnes of copper in the first half of 2014 and 60,831 ounces of
gold and 4,706 tonnes of copper in the second quarter. As
previously guided, second quarter production was expected to be
lower than the previous quarter on account of mine sequencing
whereby lower grade ore was mined and processed at Didipio and the
New Zealand operations. A planned
shutdown of the Didipio process plant for maintenance resulted in a
lower mill feed. Prior to the end of the quarter, mined ore feed to
the process plant at Reefton was affected due to access limitations
in the open pit. A redesign of the open pit and adjustment to mine
production schedule were completed subsequent to the quarter
end.
Consolidated cash costs net of by-product credits were
$435 per ounce on 166,344 ounces of
gold sold in the first half of 2014 and $778 per ounce on 72,294 ounces of gold sold in
the second quarter. The quarter on quarter increase in cash costs
was attributable to lower overall sales, a stronger New Zealand dollar and higher cost of sales in
New Zealand as a result of a
drawdown of ore inventories and gold-in-circuit.
On a co-product basis, consolidated cash costs were $695 per ounce on 237,914 gold equivalent ounces
sold in the first half of 2014 and $924 per ounce on 100,991 gold equivalent ounces
sold in the second quarter. Consolidated All-In Sustaining Costs
("AISC") net of by-product credits were $779 per ounce in the first half of 2014.
Consolidated revenue in the second quarter was $127.5 million with an EBITDA of $29.6 million and a net loss of $2.1 million.
Consolidated second quarter average gold price received was
$1,314 per ounce compared to
$1,311 per ounce received in the
previous quarter. The average copper price received for the quarter
was $6,924 per tonne versus
$6,939 per tonne in the previous
quarter.
In June 2013, the Company
announced that it had put in place a zero-cost collar hedging
program at its Reefton operation by purchasing put options for
115,650 ounces of gold at NZ$1,600 per ounce and selling an equal
number of call options at NZ$1,787 per ounce over the remaining
life of the asset. In January 2014,
the Company announced a similar program at Macraes for 208,000
ounces of gold over a two-year period with a zero-cost collar of
NZ$1,500 to NZ$1,600 per ounce. With the rising New Zealand dollar and continued lower gold
price, these hedges have been designed to operate a cash flow
positive business in New
Zealand.
The cash balance at the end of the quarter was $46.2 million compared to $42.1 million at the end of the first quarter. In
the first half of 2014, the Company repaid approximately
$30 million of debt including
$10 million in the second quarter.
Over the past eighteen months, the Company has repaid over
$94 million in debt.
Prior to quarter end, the Company announced the refinancing of
its corporate debt whereby the existing facilities which included
the undrawn revolving credit facility and the drawn $117.8 million term facility were consolidated
into a $200 million revolving credit
facility with competitive financial terms and that matures on
June 30, 2017.
The Company remains focused on strengthening its balance sheet
through further debt repayment in 2014 and increasing its cash
balance. The stronger balance sheet and additional liquidity
provides the Company with increased operational flexibility and
options for growth and sustainable dividends in future.
Production & Cost Guidance
At Didipio for the second half of 2014, the mining operations
will advance Stage 3 of the open pit into a higher grade zone of
the ore body and will continue with the Stage 4 cutback. The
operation will process higher grade ore and mill feed is expected
to be higher as throughput rates steadily increase to the planned
3.5 Mtpa rate by the end of the year. The Didipio optimisation
study is on schedule for completion by the end of the year while
the connection to power grid continues to advance well.
In the second half of the year at Macraes, production in the
third and fourth quarters is expected to be similar to the second
quarter. The operation will continue to mine at a reduced rate and
process a higher proportion of low grade stockpile ore to
supplement the mill feed. Prior to the end of the quarter, the
operation developed a new plan which involves bringing forward
mining of the Coronation pit.
Looking ahead at Reefton, the final cutback of the current mine
plan is scheduled to be completed in the third quarter. With the
redesign of the open pit to improve access, ore mined and processed
will be reduced during the third quarter resulting in lower
production for the third quarter and full year. The mine plan has
been revised and as a result the Company expects a slight increase
in the life of mine production at Reefton and the operation will
remain cash flow positive including rehabilitation costs under its
revised mine plan.
For the full year, the Company guidance is unchanged at 275,000
to 305,000 ounces of gold and 21,000 to 24,000 tonnes of copper at
cash costs of $400 to $450 per ounce
and AISC of $750 to $850 per ounce
both net of by-product credits. See Table 2 for full guidance.
Table 1 – Production and Cost Results Summary
|
Didipio
|
New
Zealand
|
Group
|
Second Quarter
2014 Results
|
|
|
|
|
Gold
Produced
|
ounces
|
14,786
|
46,045
|
60,831
|
Copper
Produced
|
tonnes
|
4,706
|
–
|
4,706
|
Gold Sales
|
ounces
|
17,746
|
54,548
|
72,294
|
Copper
Sales
|
tonnes
|
5,173
|
–
|
5,173
|
Average Gold Price
Received
|
$ per
ounce
|
1,294
|
1,321
|
1,314
|
Average Copper Price
Received
|
$ per
tonne
|
6,924
|
–
|
6,924
|
Cash Costs
|
$ per
ounce
|
(254)1
|
1,114
|
7781
|
First Half 2014
Results
|
|
|
|
|
Gold
Produced
|
ounces
|
45,266
|
102,133
|
147,399
|
Copper
Produced
|
tonnes
|
11,185
|
–
|
11,185
|
Gold Sales
|
ounces
|
54,010
|
112,334
|
166,344
|
Copper
Sales
|
tonnes
|
12,925
|
–
|
12,925
|
Average Gold Price
Received
|
$ per
ounce
|
1,309
|
1,314
|
1,312
|
Average Copper Price
Received
|
$ per
tonne
|
6,933
|
–
|
6,933
|
Cash Costs
|
$ per
ounce
|
(412)1
|
843
|
4351
|
All-In Sustaining
Costs2
|
$ per
ounce
|
(150)1
|
1,226
|
7791
|
1.
|
Net of by-product
credits
|
2.
|
Based on the World
Gold Council methodology, expansionary and growth capital
expenditures are excluded from the AISC
|
Table 2 – 2014 Production and Cost Guidance
|
Didipio
|
New
Zealand
|
Group
|
Gold
Production
|
ounces
|
85,000 –
95,000
|
190,000 –
210,000
|
275,000 –
305,000
|
Copper
Production
|
tonnes
|
21,000 –
24,000
|
–
|
21,000 –
24,000
|
Cash
Costs
|
$ per
ounce
|
($725) –
($650)1
|
$840 –
$9252
|
$400 –
$4501,2
|
All-In Sustaining
Costs3
|
$ per
ounce
|
($240) –
($210)1
|
$1,170 –
$1,2902
|
$750 –
$8501,2
|
1.
|
Net of copper
by-product credits at $3.20/lb copper
|
2.
|
NZD/USD $0.80
exchange rate
|
3.
|
Based on the World
Gold Council methodology, expansionary and growth capital
expenditures are excluded from the AISC
|
Philippines Overview
Production in the first half of 2014 at Didipio was 45,266
ounces of gold and 11,185 tonnes of copper including 14,786 ounces
of gold and 4,706 tonnes of copper in the second quarter. As
previously guided, the Company expected a decrease in production
from the previous quarter on account of mine sequencing whereby
lower grade ore was mined and processed as well as a lower mill
feed at Didipio due to planned maintenance of the process
plant.
Didipio's gold equivalent production was 104,506 ounces in the
first half of 2014 including 39,967 ounces in the second
quarter.
Second quarter cash costs, net of by-product credits at Didipio
were negative ($254) per ounce on
gold sales of 17,746 ounces and copper sales of 5,173 tonnes. The
increase in cash costs from the previous quarter was a result of
lower sales. Didipio's second quarter co-product cash costs were
$702 per gold equivalent ounce sold.
For the first half of 2014, Didipio's AISC were negative
($150) per ounce, net of by-product
credits.
The total material mined in the second quarter of 2014 was 6.1
million tonnes including 1.4 million tonnes of ore. During the
quarter, the operation mined lower grade zones in Stage 3 of the
open pit while pre-stripping Stage 4 and providing competent waste
rock for the Tailings Storage Facility ("TSF") lift.
Mill feed in the second quarter was 640,617 tonnes, lower than
the previous quarter on account of a planned shutdown of the
process plant for maintenance.
Mill feed grade for the second quarter was 0.80 g/t gold and
0.79% copper, lower than in the previous quarter as a result of
lower grade ore mined. Recovery for the second quarter was 89.4%
for gold and 93.3% for copper.
New Zealand Overview
In New Zealand, consolidated
gold production in the first half of 2014 was 102,133 ounces
including 46,045 ounces in the second quarter. As expected,
production in the quarter was lower than in the first quarter due
to lower grade ore processed across each operation.
Consolidated New Zealand cash
costs were $843 per ounce on gold
sales of 112,334 ounces in the first half of 2014 and $1,114 per ounce on gold sales of 54,548 ounces
in the second quarter. New Zealand
cash costs were higher than in the first quarter on account of
lower sales, a stronger New
Zealand dollar and higher operating costs due to a drawdown
of ore inventories and gold-in-circuit. New Zealand's AISC for the first half of 2014
was $1,226 per ounce sold.
As mentioned, the New Zealand
dollar denominated zero-cost collar hedges were put in to place at
Reefton and Macraes to ensure a cash flow positive business at
these operations in a lower gold price environment and as they
transition in to a care and maintenance phase over the next four
years.
The total material mined at the New
Zealand operations in the second quarter was 5.4 million
tonnes, a 43% decrease from the previous quarter. The decrease was
a result of the suspension of mining activities at the Macraes open
pit following the pit wall failure announced early in the quarter
and while a new mine plan was being developed.
Mill feed in New Zealand was
1.8 million tonnes for the second quarter, which was slightly
higher than in the previous quarter. The increase was due primarily
to better mill availability at Macraes but partly offset by a lower
feed at Reefton where less ore was mined due to geotechnical
instability of one of the pit walls, which resulted in less ore
available for processing.
Mill feed grade was 0.98 g/t for the second quarter, lower than
in the previous quarter due to an increase of low grade stockpile
ore processed at Macraes. The overall recovery for the New Zealand operations was 82.5%, which was
similar to the previous quarter.
Project Development
Debottlenecking of the Didipio process plant to achieve the
planned 3.5 Mtpa throughput rate continued to progress well and is
on schedule for completion by year-end. In the quarter, the Company
completed construction of the water treatment plant at Didipio and
commissioning will take place in the third quarter. The Didipio
power grid connection continues to advance well and the Didipio
optimisation study is on schedule for completion by the end of the
third quarter.
In New Zealand, the
Round Hill and Blackwater studies
are on schedule for completion in the third quarter.
Sustainability Overview
During the second quarter, the Company invested approximately
$0.5 million on community initiatives
and other development programs within Didipio and neighbouring
communities.
As in previous quarters, most of this investment was on
infrastructure projects such as farm to market access roads and
water related infrastructure, education and health.
During the quarter, the Company sowed more than 36,000 seeds
from its primary tree plantation. The Company was an active
participant in the Philippines'
Environment Month in June and was a sponsor of Arbor Day on June
25 when the Company planted over 1,200 seedlings throughout
its communities.
Table 3 – Key Financial Statistics for Didipio
Operations
|
Q2
Jun 30
2014
|
Q1
Mar 31
2014
|
Q2
Jun 30
2013
|
Half
Year
Jun
2014
|
Half
Year
Jun
20132
|
Gold Sold
(ounces)
|
17,746
|
36,264
|
11,086
|
54,010
|
13,877
|
Copper Sold
(tonnes)
|
5,173
|
7,752
|
5,073
|
12,925
|
6,622
|
Average Gold Price
Received ($ per ounce)
|
1,294
|
1,317
|
1,270
|
1,309
|
1,330
|
Average Copper Price
Received ($ per tonne)
|
6,924
|
6,939
|
7,094
|
6,933
|
7,160
|
Cash Operating
Costs1 ($ per ounce)
|
(254)
|
(490)
|
(586)
|
(412)
|
(227)
|
Cash Operating
Margin ($ per ounce)
|
1,548
|
1,807
|
1,856
|
1,721
|
1,557
|
1.
|
Net of by-product
credits
|
2.
|
Commercial
production was declared effective April 1, 2013 at Didipio and
operating costs and net revenue received prior to this date were
capitalised.
|
Table 4 – Didipio Mine Operating Statistics
|
Q2
Jun 30
2014
|
Q1
Mar 31
2014
|
Q2
Jun 30
2013
|
Half
Year
Jun
2014
|
Half
Year
Jun
2013*
|
Gold Produced
(ounces)
|
14,786
|
30,480
|
13,676
|
45,266
|
20,553
|
Copper Produced
(tonnes)
|
4,706
|
6,479
|
5,710
|
11,185
|
9,373
|
|
|
|
|
|
|
Total Ore Mined
(tonnes)
|
1,404,959
|
1,674,096
|
1,729,314
|
3,079,055
|
3,566,395
|
Ore Mined Grade Gold
(grams/tonne)
|
0.47
|
0.83
|
0.55
|
0.67
|
0.52
|
Ore Mined Grade
Copper (%)
|
0.48
|
0.61
|
0.64
|
0.55
|
0.64
|
|
|
|
|
|
|
Total Waste Mined
(tonnes) including pre-strip
|
4,675,419
|
4,444,876
|
4,342,999
|
9,120,295
|
7,093,041
|
|
|
|
|
|
|
Mill Feed (dry milled
tonnes)
|
640,617
|
750,626
|
727,550
|
1,391,243
|
1,176,253
|
Mill Feed Grade Gold
(grams/tonne)
|
0.80
|
1.40
|
0.75
|
1.12
|
0.69
|
Mill Feed Grade
Copper (%)
|
0.79
|
0.90
|
0.91
|
0.85
|
0.91
|
|
|
|
|
|
|
Recovery Gold
(%)
|
89.4
|
90.2
|
77.5
|
89.8
|
77.8
|
Recovery Copper
(%)
|
93.3
|
95.4
|
87.3
|
94.4
|
87.7
|
* Note:
operating statistics at Didipio before April 1, 2013 were
pre-commercial production
|
Table 5 – Key Financial Statistics for New Zealand
Operations
|
Q2
Jun 30
2014
|
Q1
Mar 31
2014
|
Q2
Jun 30
2013
|
Half
Year
Jun
2014
|
Half
Year
Jun
2013
|
Gold Sales
(ounces)
|
54,548
|
57,786
|
59,620
|
112,334
|
118,205
|
Average Price
Received ($ per ounce)
|
1,321
|
1,307
|
1,422
|
1,293
|
1,526
|
Cash Operating Cost
($ per ounce)
|
1,114
|
584
|
918
|
843
|
804
|
Cash Operating
Margin ($ per ounce)
|
207
|
723
|
504
|
450
|
722
|
Table 6 – Combined Operating Statistics for New Zealand
|
Q2
Jun 30
2014
|
Q1
Mar 31
2014
|
Q2
Jun 30
2013
|
Half
Year
Jun
2014
|
Half
Year
Jun
2013
|
Gold Produced
(ounces)
|
46,045
|
56,088
|
54,677
|
102,133
|
115,263
|
|
|
|
|
|
|
Total Ore Mined
(tonnes)
|
602,092
|
1,753,796
|
1,789,769
|
2,355,888
|
3,775,099
|
|
|
|
|
|
|
Ore Mined Grade
(grams/tonne)
|
1.35
|
1.25
|
1.06
|
1.28
|
1.19
|
|
|
|
|
|
|
Total Waste Mined
(tonnes) including pre-strip
|
4,766,500
|
7,665,243
|
13,818,227
|
12,431,743
|
30,208,125
|
|
|
|
|
|
|
Mill Feed (dry milled
tonnes)
|
1,773,665
|
1,693,711
|
1,831,729
|
3,467,376
|
3,630,345
|
|
|
|
|
|
|
Mill Feed Grade
(grams/tonne)
|
0.98
|
1.23
|
1.12
|
1.10
|
1.20
|
|
|
|
|
|
|
Recovery
(%)
|
82.5
|
82.2
|
82.1
|
82.4
|
81.1
|
Table 7 – Macraes Goldfield Operating Statistics
|
Q2
Jun 30
2014
|
Q1
Mar 31
2014
|
Q2
Jun 30
2013
|
Half
Year
Jun
2014
|
Half
Year
Jun
2013
|
Gold Produced
(ounces)
|
35,641
|
40,668
|
40,063
|
76,309
|
88,202
|
|
|
|
|
|
|
Total Ore Mined
(tonnes)
|
397,419
|
1,303,632
|
1,414,405
|
1,701,051
|
3,057,837
|
|
|
|
|
|
|
Ore Mined Grade
(grams/tonne)
|
1.46
|
1.21
|
0.96
|
1.27
|
1.13
|
|
|
|
|
|
|
Total Waste Mined
(tonnes) including pre-strip
|
740,603
|
2,934,955
|
9,432,040
|
3,675,558
|
21,825,450
|
|
|
|
|
|
|
Mill Feed (dry milled
tonnes)
|
1,401,993
|
1,275,748
|
1,442,860
|
2,677,741
|
2,905,269
|
|
|
|
|
|
|
Mill Feed Grade
(grams/tonne)
|
0.96
|
1.19
|
1.04
|
1.07
|
1.16
|
|
|
|
|
|
|
Recovery
(%)
|
82.8
|
82.9
|
81.8
|
82.8
|
81.0
|
Table 8 – Reefton Mine Operating Statistics
|
Q2
Jun 30
2014
|
Q1
Mar 31
2014
|
Q2
Jun 30
2013
|
Half
Year
Jun
2014
|
Half
Year
Jun
2013
|
Gold Produced
(ounces)
|
10,404
|
15,420
|
14,614
|
25,824
|
27,061
|
|
|
|
|
|
|
Total Ore Mined
(tonnes)
|
204,673
|
450,164
|
375,364
|
654,837
|
717,262
|
|
|
|
|
|
|
Ore Mined Grade
(grams/tonne)
|
1.14
|
1.38
|
1.45
|
1.30
|
1.46
|
|
|
|
|
|
|
Total Waste Mined
(tonnes) including pre-strip
|
4,025,897
|
4,730,288
|
4,386,187
|
8,756,185
|
8,382,675
|
|
|
|
|
|
|
Mill Feed (dry milled
tonnes)
|
371,672
|
417,963
|
388,869
|
789,635
|
725,076
|
|
|
|
|
|
|
Mill Feed Grade
(grams/tonne)
|
1.07
|
1.38
|
1.41
|
1.23
|
1.38
|
|
|
|
|
|
|
Recovery
(%)
|
81.4
|
80.2
|
83.1
|
80.8
|
81.2
|
PRODUCTION
In the first half of 2014, the Company produced 147,399 ounces
of gold and 11,185 tonnes of copper. First half 2014 cash costs net
of by-product credits were $435 per
ounce on 166,344 ounces of gold sold and 12,925 tonnes of copper
sold. The Company's AISC net of by-product credits were
$779 per ounces sold in the first
half of 2014.
In the second quarter, the Company produced 60,831 ounces of
gold and 4,706 tonnes of copper. As previously guided, the Company
expected a decrease in production from the previous quarter on
account of mine sequencing whereby lower grades were mined and
processed across all operations as well as a lower mill feed at
Didipio due to planned maintenance of the process plant. Production
also decreased from the previous quarter on account of lower mill
feed at Reefton due to restricted access of the open pit.
The total Company cash costs net of by-product credits for the
second quarter were $778 per ounce on
sales of 72,294 ounces of gold and 5,173 tonnes of copper.
Didipio Mine (Philippines)
The Didipio operation recorded one lost time injury ("LTI")
during the quarter when a contractor was injured while performing a
standard duty. Following this injury, the Company reinforced the
importance of following standard operating procedures and provided
additional training to its workforce. Prior to this LTI, the
Didipio operation achieved approximately 10.4 million man hours
worked without an LTI.
In the second quarter, Didipio produced 14,786 ounces of gold
and 4,706 tonnes of copper. The decrease in production was expected
due to mine sequencing whereby the operations mined a lower grade
zone of the ore body and processed lower grade ore. Additionally,
mill feed was lower than in the previous quarter due to a shutdown
of the process plant for planned maintenance and debottlenecking
activities.
In the second quarter, the mining operation was focused on
mining low grade ore from Stage 3 of the open pit while
pre-stripping of Stage 4 and providing competent waste rock to the
TSF lift.
The total material mined in the second quarter was 6.1 million
tonnes similar to the previous quarter. The total ore mined in the
quarter was 1.4 million tonnes, most of which was delivered to
stockpiles. As at the end of the quarter, 9.1 million tonnes of ore
had been stockpiled for future processing.
Total mill feed in the second quarter was 640,617 tonnes, lower
than the previous quarter as expected. During the quarter, the
process plant was shut down for a period of six days at the end of
May for planned maintenance, which included relining the SAG mill
and modifying the ball mill. Additionally, the Company installed a
third stage tailings delivery pump, began the installation of a new
tailings delivery line and poured the foundation for a pebble
crusher as part of the debottlenecking activities to increase the
throughput rate to 3.5 Mtpa by the end of 2014.
Mill feed grade for the second quarter was 0.80 g/t for gold and
0.79% for copper, both slightly lower than in the previous quarter
on account of lower grade ore mined. Gold recovery was 89.4% while
copper recovery was 93.3% both slightly lower than previous quarter
on account of lower grades processed but partly offset by better
floatation recoveries.
In the second quarter, the Company made four shipments of
concentrate totalling 23,804 dry metric tonnes to smelters in
Asia and shipped over 4,000 ounces
in Dore bars to the mint in Perth,
Australia.
Looking ahead to the second half of 2014, the mining operations
at Didipio will advance Stage 3 of the open pit into a higher grade
zone of the ore body and will continue with the Stage 4 cutback.
The operation will process higher grade ore and mill feed is
expected to be higher as throughput rates steadily increase to the
planned 3.5 Mtpa rate by the end of the year. The Didipio
optimisation study is on schedule for completion by the end of the
third quarter while the connection to power grid continues to
advance well.
With the strong production results to start the first half of
2014, Didipio is well on track to achieve its 2014 guidance.
Macraes Goldfield (New
Zealand)
There were no LTIs during the second quarter at the Macraes
operation (open pit and underground).
Gold production from the Macraes Goldfield for the quarter was
35,641 ounces, which was lower than the previous quarter as
expected and on account of processing a higher proportion of low
grade stockpile ore, which resulted in a lower head grade.
Total material mined from the open pit was 1.1 million tonnes
for the quarter, 73% lower than in the previous quarter due to the
stoppage of mining operations after the pit wall failure early in
the second quarter. This event also displaced part of the access
road to the underground portal and as a result, the underground
operations were suspended for eight days whilst a new access road
was reinstated. Mining of the underground resumed immediately after
the road was reinstated.
Open pit mining re-commenced late in the second quarter with
earthworks that included the construction of a new haul road to
access the southern end of the pit. Mining of ore from the open pit
recommenced subsequent to the quarter end.
At the Frasers Underground, mining was undertaken in both panels
1 and 2 in the quarter. Total ore mined for the quarter was
205,915 tonnes, lower than the previous quarter due to the stoppage
of operations following the pit wall slump. The decrease was partly
offset by increased equipment productivity.
Mill feed was 1.40 million tonnes compared to 1.28 million
tonnes in the previous quarter, an increase due to better plant
availability. In the first quarter, throughput rates had been
reduced to 65% of normal operating rates as a result of a burnout
of a motor in one of the mills. These repairs were completed at the
end of the first quarter and throughput rates returned to normal
levels.
Mill feed grade for the quarter was 0.96 g/t, which was lower
than the previous quarter as expected on account of processing a
higher proportion of low grade stockpile ore.
The process plant recovery was 82.8% in the quarter, similar to
the previous quarter on account of better Carbon-in-Leach ("CIL") recoveries and changes
made to increase the gold electro-winning efficiency but partly
offset by the lower head grade.
In the second half of the year at Macraes, production in the
third and fourth quarters is expected to be similar to the second
quarter. The operation will continue to mine at a reduced rate and
process a higher proportion of low grade stockpile ore to
supplement the mill feed. Prior to the end of the quarter, the
operation developed a new plan which involves bringing forward
mining of the Coronation pit.
Reefton Mine (New
Zealand)
In the second quarter of 2014, no LTIs were recorded at the
Reefton operation.
Gold production at Reefton was 10,404 ounces, a decrease from
the previous quarter due primarily to lower grades mined and
processed and less ore available for processing.
Total material mined from the open pit was 4.2 million tonnes, a
decrease of 18% from the previous quarter while total ore mined was
204,673 tonnes, a 54% decrease from the previous quarter. During
the quarter, geotechnical instability of one of the pit walls
affected access in the open pit resulting in less material
including less ore mined and available for processing.
Mill feed for the quarter was 371,672 tonnes, down 11% from the
previous quarter. The reduced ore availability resulted in a
process plant shutdown for a period of twelve days. During this
time, opportune maintenance activities were completed.
The mill feed grade in the second quarter was 1.07 g/t versus
1.38 g/t in the previous quarter. The decrease was on account of
lower grade ore mined due to restricted access to the high grade
section of the pit.
Gold recovery for the quarter was 81.4%, slightly better than
the previous quarter on account of improved ore characteristics and
better CIL recoveries.
Looking ahead at Reefton, the final cutback of the current mine
plan is scheduled to be completed in the third quarter. With the
redesign of the open pit to improve access, ore mined and processed
will be reduced during the third quarter resulting in lower
production for the third quarter and full year. The mine plan has
been revised and as a result the Company expects a slight increase
in the life of mine production at Reefton and the operation will
remain cash flow positive including rehabilitation costs under its
revised mine plan.
EXPLORATION
Exploration expenditure for the second quarter totalled
$0.9 million.
Exploration activities for the second quarter were focused
mainly on near mine site drilling at Didipio and preparation for a
geophysical survey of the near mine area.
Philippines
Exploration expenditure in the
Philippines for the second quarter was $0.7 million.
During the quarter, exploration drilling continued at the San
Pedro and Luminag near mine prospects (see Figure 1). At San Pedro,
the drilling is within an area of extensive alluvial mining where
some limonitic veinlets are exposed. During the quarter, three
additional holes were drilled at San Pedro for an aggregated 1,150
metres. At Luminag, one hole for 402 metres was drilled during the
quarter.
The drilling intersected a broad zone of low grade gold-copper
mineralisation along the contact zone of monzonite and diorite
intrusions, characterised by breccia zones with pyrite-chalcopyrite
veinlets. Mineralised intercepts are shown in Figure 1 below.
Also in the quarter, the Company began preparations for a
geophysical survey of the Didipio area, which is scheduled to take
place in the third quarter. The proposed survey will scan depths
greater than 500 metres to locate deep-seated mineralisation. The
results of the survey will give greater clarity of the low-grade
mineralised intersections from the recent drilling and will allow
the Company to determine where additional drill testing is
required.
Figure 1: Drill hole location and summary of
intersected mineralised zones, Q2 2014
(Au eq = Au g/t + %Cu
X 1.67)
To see Figure 1, please click here:
http://files.newswire.ca/435/Figure1Oceana.pdf
Project Development
At Didipio, debottlenecking activities of the process plant to
achieve the planned 3.5 Mtpa throughput rate included the
installation of a third stage tailings delivery pump and a new
tailings delivery line, construction of the pebble crusher
foundation and replacement of drive motors. The work is advancing
well and on schedule for completion by the end of 2014.
During the quarter, the Company completed the construction of
the water treatment plant at Didipio and commissioning is expected
to be completed in the third quarter. Construction of Stage 3 of
the TSF lift including the flow through drainage was completed
ahead of schedule and under budget. The Company expects to complete
the construction of the Didipio TSF to its ultimate life of mine
capacity over the next five years.
The Didipio power grid connection project continues to advance
well. By connecting to the power grid, the Company expects to
significantly reduce its power costs at the operation starting in
2016.
The Didipio optimisation study, which includes the timing and
design of the underground development, continues to advance well
and is on schedule for completion by the end of the third quarter
of 2014.
In New Zealand, the
Round Hill study at Macraes and
the Blackwater study near Reefton are both on schedule for
completion in the third quarter of 2014.
Sustainability
In the second quarter, the Company invested approximately
$0.5 million on community initiatives
and programs within Didipio and neighbouring communities. Most of
this investment was on infrastructure projects such as construction
of farm to market access roads, bridges, classrooms and school
facilities, water systems, sports facilities and a health
centre.
The Company continued to support local educators through salary
subsidisation while the Company's scholarship program increased to
114 university scholars. During the quarter, nearly 800 residents
from five local communities benefitted from four Company medical
missions.
For the quarter, the Didipio Community Development Corporation
("DiCorp"), the fastest growing enterprise in the province of
Nueva Vizcaya generated gross
revenues of $1.2 million from mine
services provided to the Didipio Mine.
Seedling production at the Company's primary tree nursery
resulted in the sowing of more than 36,000 seeds of various forest
and fruit bearing trees in the quarter. Surveying of a new tree
plantation in the municipality of Kasibu is near completion. The
new plantation will provide new employment opportunities and a new
source of income for local farmers.
In support and recognition of the environment, the Company was
an active participant during the month of June. On June 25, 2014, OceanaGold sponsored and
participated in the Philippines
Arbor Day by leading tree
planting activities at the mine site and planting over 1,200
tree seedlings including 300 narra (Philippines' National Tree) seedlings on
school grounds and throughout the host communities.
FINANCIAL SUMMARY
STATEMENT OF
OPERATIONS
|
Q2
Jun 30
2014
$000
|
Q1
Mar 31
2014
$000
|
Q2
Jun 30
2013
$000
|
Half
Year
Jun
2014
$000
|
Half
Year
Jun
2013
$000
|
Sales
|
127,480
|
170,355
|
131,213
|
297,835
|
226,852
|
Cost of sales,
excluding depreciation and amortisation
|
(88,543)
|
(63,183)
|
(80,437)
|
(151,726)
|
(120,312)
|
General &
Administration
|
(9,431)
|
(8,315)
|
(6,764)
|
(17,746)
|
(12,926)
|
Foreign Currency
Exchange Gain/(Loss)
|
116
|
2,916
|
(1,528)
|
3,032
|
(1,947)
|
Other
income/(expense)
|
(20)
|
(743)
|
11
|
(763)
|
(2,097)
|
Earnings before
interest, tax, depreciation & amortisation (EBITDA) (excluding
gain/(loss) on undesignated hedges and impairment
charge)
|
29,602
|
101,030
|
42,495
|
130,632
|
89,570
|
Depreciation and
amortisation
|
(31,433)
|
(33,366)
|
(39,824)
|
(64,799)
|
(69,371)
|
Net interest expense
and finance costs
|
(2,844)
|
(2,430)
|
(6,322)
|
(5,274)
|
(12,698)
|
Earnings/(loss)
before income tax and gain/(loss) on undesignated hedges and
impairment charge
|
(4,675)
|
65,234
|
(3,651)
|
60,559
|
7,501
|
Tax (expense)/
benefit on earnings/loss
|
5,668
|
(5,365)
|
1,004
|
303
|
(3,659)
|
Earnings/(loss)
after income tax and before gain/(loss) on undesignated hedges and
impairment charge
|
993
|
59,869
|
(2,647)
|
60,862
|
3,842
|
Impairment
charge
|
-
|
-
|
(85,500)
|
-
|
(85,500)
|
Gain/(loss) on fair
value undesignated hedges
|
(4,328)
|
(1,283)
|
(8,977)
|
(5,611)
|
(8,164)
|
Tax (expense)/benefit
on gain/loss on undesignated hedges and impairment
|
1,212
|
359
|
26,633
|
1,571
|
26,389
|
Net
Profit/(loss)
|
(2,123)
|
58,945
|
(70,491)
|
56,822
|
(63,433)
|
Basic earnings per
share
|
$(0.01)
|
$0.20
|
$(0.24)
|
$0.19
|
$(0.22)
|
Diluted earnings per
share
|
$(0.01)
|
$0.19
|
$(0.24)
|
$0.19
|
$(0.22)
|
CASH
FLOWS
|
|
|
|
|
|
Cash flows from
Operating Activities
|
52,730
|
73,288
|
9,864
|
126,018
|
31,305
|
Cash flows used in
Investing Activities
|
(31,091)
|
(24,147)
|
(25,218)
|
(55,238)
|
(90,200)
|
Cash flows used in
Financing Activities
|
(12,603)
|
(25,198)
|
(4,459)
|
(37,801)
|
(30,169)
|
BALANCE
SHEET
|
As at
Jun 30
2014
$000
|
As at
Dec 31
2013
$000
|
Cash and cash
equivalents
|
46,207
|
24,788
|
Other Current
Assets
|
116,850
|
126,400
|
Non-Current
Assets
|
773,216
|
745,638
|
Total
Assets
|
936,273
|
896,826
|
Current
Liabilities
|
81,467
|
129,478
|
Non-Current
Liabilities
|
189,934
|
175,618
|
Total
Liabilities
|
271,401
|
305,096
|
Total
Shareholders' Equity
|
664,872
|
591,730
|
RESULTS OF OPERATIONS
Net Earnings
In the second quarter, the Company reported a quarterly net loss
of $2.1 million versus a net profit
of $58.9 million in the previous
quarter. The Company reported quarterly EBITDA (excluding gain/loss
on undesignated hedges and impairment charge) of $29.6 million in the second quarter compared to
$101.0 million in the first quarter.
The decrease from the previous quarter was attributed to lower
overall sales, lower average gold price and copper price received
in the Philippines, a stronger
New Zealand dollar and higher cost
of sales in New Zealand as a
result of a drawdown of ore inventories and gold-in-circuit
Sales Revenue
Philippines
Second quarter concentrate sales revenue net of concentrate
treatment, refining and selling costs in Philippines was $51.0
million of which copper revenue was $35.8 million while gold bullion revenue was
$4.4 million. In the second quarter,
the average gold price received at Didipio was $1,294 per ounce compared to $1,317 per ounce in the previous quarter and the
average copper price received was $6,924 per tonne compared to $6,939 per tonne in the previous quarter. In the
second quarter 17,746 ounces of gold and 5,173 tonnes of copper
were sold. The quarter on quarter decrease in sales was expected
and due primarily to lower production at Didipio. Silver sales for
the quarter were 42,550 ounces compared with 117,955 ounces in the
previous quarter.
During the quarter, the Company shipped 23,804 dry metric tonnes
of concentrate to smelters in Asia.
New Zealand
In New Zealand, second quarter
revenue was $72.1 million which was
slightly lower than the previous quarter on account of lower sales
but partly offset by a slightly higher average gold price received.
The average gold price received in New
Zealand in the second quarter was $1,321 per ounce compared to $1,307 per ounce received in the previous
quarter. Gold sales in the second quarter were 54,548 ounces
compared to 57,786 ounces in the previous quarter.
Operating Costs and Margins per Ounce
Philippines
Operating cash costs at Didipio were negative ($254) per ounce sold, net of by-product credits
for the second quarter compared to negative ($490) per ounce sold in the previous quarter. On
a co-product basis, the operating cash costs were $702 per ounce of gold sold compared to
$483 per ounce in previous quarter.
The increase in cash costs can be attributed to a decrease in
sales.
New Zealand
Operating cash costs in New
Zealand were $1,114 per ounce
sold for the second quarter compared to $584 per ounce in the previous quarter. The
increase from the previous quarter was due to slightly lower sales,
a stronger New Zealand dollar and
higher cost of sales in New
Zealand as a result of a drawdown of ore inventories and
gold-in-circuit.
The average cash margin in New
Zealand was $207 per ounce
sold for the second quarter versus $723 per ounce in the first quarter. The decrease
was a result of higher costs of sales and lower ounces sold, offset
partly by a slightly higher average gold price received.
Depreciation and Amortisation
Depreciation and amortisation charges include amortisation of
mine development, deferred pre- stripping costs and depreciation on
equipment.
Depreciation and amortisation charges are mostly calculated on a
unit of production basis and totalled $31.4
million for the second quarter compared to $33.4 million in the previous quarter. The
decrease reflects the lower production from the Philippines and New Zealand in the quarter, offset partly by a
stronger New Zealand dollar.
Net Interest Expense and Finance Costs
The net interest expense and finance costs of $2.8 million for the quarter were in line with
the previous quarter.
Undesignated Hedges Gains/Losses
Unrealised gains and losses calculated as a fair value
adjustment of the Company's undesignated hedges are brought to
account at the end of each reporting period and reflect changes in
the spot gold price. These valuation adjustments for the quarter
ending June 30, 2014, reflect a loss
of $4.3 million compared to a loss of
$1.3 million in the previous
quarter.
Details of the derivative instruments held by the Company at
year end are summarised below under "Derivative Assets/
Liabilities".
DISCUSSION OF CASH FLOWS
Operating Activities
Cash inflows from operating activities were $52.7 million for the second quarter compared to
$73.3 million in the previous
quarter. The decrease was due primarily to lower overall sales.
Investing Activities
Cash used for investing activities totalled $31.1 million in the second quarter compared to
$24.1 million in the previous
quarter.
Investing activities included expenditures in capitalised mining
and on sustaining and expansionary capital.
Financing Activities
Financing net outflows for the second quarter were $12.6 million compared to a net outflow of
$25.2 million in the previous
quarter. This reflects a net repayment of borrowings of
$10.0 million during the quarter, in
addition to repayment of finance leases.
DISCUSSION OF FINANCIAL POSITION AND LIQUIDITY
Company's funding and capital requirements
For the quarter ended June 30,
2014, the Company recorded a net loss of $2.1 million. As at the end of the quarter, the
cash funds held were $46.2 million
and net current assets were $81.6
million at quarter end. The Company repaid $10.0 million of core debt prior to the end of
the quarter.
Prior to quarter end, the Company announced the refinancing of
its corporate debt whereby the existing facilities which included
the undrawn revolving credit facility and the drawn $117.8 million term facility were consolidated
into a $200 million revolving credit
facility. The new revolving credit facility consists of competitive
financial terms and standard corporate debt covenants and matures
on June 30, 2017.
As at the end of the second quarter, the Company has immediate
available liquidity of $128.4 million
including $46.2 million in cash.
Commitments
The Company's capital commitments as at June 30, 2014 are as follows:
|
Jun 30
2014
$000
|
Within 1
year
|
10,016
|
This includes mainly contracts supporting the operations of the
Didipio Mine.
Financial Position
Current Assets
Current assets were $163.1 million
as at June 30, 2014 compared to
$151.2 million as December 31, 2013. The variance in the current
assets was due mainly to an increase in cash generated from
operations offset partly by a decrease in inventories mainly in
New Zealand.
Non-Current Assets
Non-current assets were $773.2
million as at the June 30,
2014 compared to $745.6
million as at December 31,
2013. The variance is due to increases in inventories mainly
in Philippines, input tax credits
paid and capitalised mining costs but partly offset by depreciation
and amortisation.
Current Liabilities
Current liabilities were $81.5
million as at June 30, 2014
compared to $129.5 million as at
December 31, 2013. This decrease was
attributed mainly to the repayment of $30
million in debt in the first half of 2014 and the
reclassification of the drawn amount of the revolving credit
facility from current to non-current following the refinancing.
Non-Current Liabilities
Non-current liabilities were $189.9
million as at June 30, 2014
compared to $175.6 million as at
December 31, 2013. The increase was
due mainly to a reclassification of the credit facility from
current liabilities to non-current liabilities following the
refinancing. The increase in non-current liabilities from the end
of 2013 was partly offset by a slight decrease in deferred tax
liabilities.
Derivative Assets / Liabilities
In 2013, the Company entered into a gold bullion zero cost
collar agreement to purchase gold put options at an exercise price
of NZ$1,600 per ounce, which were financed by an equal number of
gold call options sold at an exercise price of NZ$1,787 per ounce
for 115,650 ounces of production at Reefton for the period from
July 2013 to June 2015. As at the end of the second quarter of
2014, the balance of gold production under this agreement was
53,730 ounces.
Early in the first quarter, the Company entered into another
gold bullion zero cost collar agreement to purchase gold put
options at an exercise price of NZ$1,500 per ounce, which were
financed by an equal number of gold call options sold at an
exercise price of NZ$1,600 per ounce for 208,000 ounces of
production from Macraes over a two-year period ending November 2015. As at the end of the second
quarter of 2014, the balance of gold production under this
agreement was 154,502 ounces.
The above hedges are undesignated and do not qualify for hedge
accounting.
A summary of the Company's marked to market derivatives is as
per below:
|
Jun 30
2014
$000
|
Dec 31
2013
$000
|
Current
Assets
|
Gold put/call
options
|
5,501
|
7,501
|
|
|
|
Non-Current
Assets
|
Gold put/call
options
|
-
|
2,619
|
Total
Assets
|
5,501
|
10,120
|
|
|
|
Non-Current
Liabilities
|
Gold put/call
options
|
486
|
-
|
Total
Liabilities
|
486
|
-
|
Shareholders' Equity
A summary of the movement in shareholders' equity is set out
below:
|
Period
Ended
Jun 30
2014
$000
|
Total equity at
beginning of the quarter
|
662,949
|
Profit/(loss) after
income tax
|
(2,123)
|
Movement in other
comprehensive income
|
2,083
|
Movement in
contributed surplus
|
(167)
|
Issue of shares/
(Equity raising costs)
|
2,130
|
Total equity at
end of financial period
|
664,872
|
Shareholder's equity has increased by $1.9 million to $664.9
million at June 30, 2014,
mainly as a result of employees exercising shares and currency
translation differences reflected in "Other Comprehensive Income"
that arise from the translation of entities with a functional
currency other than USD, offset partly by a net loss after tax for
the period of $2.1 million.
Capital Resources
As at June 30, 2014, the share and
securities summary was:
Shares
outstanding
|
301,345,184
|
Options and share
rights outstanding
|
9,504,287
|
As at July 30, 2014, there was no
change in shares and securities:
Shares
outstanding
|
301,345,184
|
Options and share
rights outstanding
|
9,504,287
|
As at December 31, 2013, the share
and securities summary was:
Shares
outstanding
|
300,350,127
|
Options and share
rights outstanding
|
9,846,182
|
CRITICAL ACCOUNTING ESTIMATES AND ACCOUNTING POLICIES
The preparation of financial statements in conformity with IFRS
requires management to make estimates and assumptions that affect
the amounts reported in the consolidated financial statements and
related notes.
Exploration and Evaluation Expenditure
Exploration and evaluation expenditure is stated at cost and is
accumulated in respect of each identifiable area of interest.
Such costs are only carried forward to the extent that they are
expected to be recouped through the successful development of the
area of interest (or alternatively by its sale), or where
activities in the area have not yet reached a stage which permits a
reasonable assessment of the existence or otherwise of economically
recoverable resources, and active work is continuing.
Accumulated costs in relation to an abandoned area are written
off to the Statement of Operations in the period in which the
decision to abandon the area is made.
A regular review is undertaken of each area of interest to
determine the appropriateness of continuing to carry forward costs
in relation to that area of interest.
Mining Properties in Production or Under Development
Expenditure relating to mining properties in production and
development are accumulated and brought to account at cost less
accumulated amortisation in respect of each identifiable area of
interest. Amortisation of capitalised costs, including the
estimated future capital costs over the life of the area of
interest, is provided on the production output basis, proportional
to the depletion of the mineral resource of each area of interest
expected to be ultimately economically recoverable.
Costs associated with the removal of overburden and other mine
waste materials that are incurred in the production phase of mining
operations are included in the costs of inventory in the period in
which they are incurred, except when the charges represent getting
better access to a component of the mineral property.
Charges are capitalised when the stripping activity provides
better access to components of the ore body and reserves that will
be produced in future periods that would not have been accessible
without the stripping activity. When charges are deferred in
relation to such activity, the charges are amortised over the
reserve in the betterment accessed by the stripping activity using
the units of production method.
A regular review is undertaken of each area of interest to
determine the appropriateness of continuing to carry forward costs
in relation to that area of interest. Should the carrying
value of expenditure not yet amortised exceed its estimated
recoverable amount, the excess is written off to the Statement of
Comprehensive Income.
Asset Retirement Obligations
OceanaGold recognises the present value of future asset
retirement obligations as a liability in the period in which it
incurs a legal obligation associated with the retirement of
long-lived assets that results from the acquisition, construction,
development and/or normal use of the assets. OceanaGold
concurrently recognises a corresponding increase in the carrying
amount of the related long-lived asset that is depreciated over the
life of the asset.
The key assumptions on which the present value of the
asset retirement obligations are based
include the estimated risk-adjusted future cash flows, the
timing of those cash flows and the risk-free rate or rates on which
the estimated cash flows have been discounted. Subsequent to the
initial measurement, the liability is accreted over time through
periodic charges to earnings. The amount of the liability is
subject to re-measurement at each reporting period if there has
been a change to the key assumptions.
Asset Impairment Evaluations
The carrying values of exploration, evaluation, mining
properties in production or under development and plant and
equipment are reviewed for impairment when events or changes in
circumstances indicate the carrying value may not be
recoverable. If any such indication exists and where the
carrying value exceeds the discounted future cash flows from these
assets, the assets are written down to the fair value of the
estimated future cash flows based on OceanaGold's weighted
average cost of capital.
Non-current assets are tested for impairment when events or
changes in circumstances suggest that the carrying amount may not
be fully recoverable.
Derivative Financial Instruments/Hedge Accounting
The consolidated entity has used derivative financial
instruments to manage commodity price and foreign currency
exposures from time to time. Derivative financial instruments are
initially recognised in the balance sheet at fair value and are
subsequently re- measured at their fair values at each reporting
date.
The fair value of gold hedging instruments is calculated by
discounting the future value of the hedge contract at the
appropriate prevailing quoted market rates at the reporting date.
The fair value of forward exchange contracts is calculated by
reference to the current forward exchange rate for contracts with
similar maturity profiles.
Stock Option Pricing Model
Stock options granted to employees or external parties are
measured by reference to the fair value at grant date and are
recognised as an expense in equal instalments over the vesting
period and credited to the contributed surplus account. The expense
is determined using an option pricing model that takes into account
the exercise price, the term of the option, the impact of dilution,
the non-tradable nature of the option, the current price and
expected volatility of the underlying share, the expected dividend
yield and the risk free interest rate for the term of the
option.
Income Tax
The Group follows the liability method of income tax allocation.
Under this method, future tax assets and liabilities are determined
based on differences between the financial reporting and tax bases
of assets and liabilities and are measured using the substantially
enacted tax rates and laws that will be in effect when the
differences are expected to reverse. Deferred tax assets including
tax losses are recognised to the extent that it is probable that
the Company will generate sufficient future taxable income.
Utilisation of the tax losses also depends on the ability of the
entities to satisfy certain tests at the time the losses are
recouped.
Foreign Currency Translation
The consolidated financial statements are expressed in
United States dollars ("USD") and
have been translated to USD using the current rate method described
below. The controlled entities of OceanaGold have either Australian
dollars ("AUD"), New Zealand
dollars ("NZD") or United States
dollars ("USD") as their functional currency. Foreign currency
transactions are translated into the functional currency using the
exchange rates prevailing at the dates of the transactions.
Generally, foreign exchange gains and losses resulting from the
settlement of foreign currency transactions and from the
translation at year-end exchange rates of monetary assets and
liabilities denominated in currencies other than an operation's
functional currency are recognised in the statement of income.
Significant areas where Management's judgement is applied
include ore reserve and resource determinations, exploration and
evaluation assets, mine development costs, plant and equipment
lives, contingent liabilities, current tax provisions and future
tax balances and asset retirement obligations. Actual results
may differ from those estimates.
RISKS AND UNCERTAINTIES
This document contains some forward looking statements that
involve risks, uncertainties and other factors that could cause
actual results, performance, prospects and opportunities to differ
materially from those expressed or implied by those forward looking
statements. Factors that could cause actual results or events to
differ materially from current expectations include, among other
things: volatility and sensitivity to market prices for gold;
replacement of reserves; possible variations of ore grade or
recovery rates; changes in project parameters; procurement of
required capital equipment and operating parts and supplies;
equipment failures; unexpected geological conditions; political
risks arising from operating in certain developing countries;
inability to enforce legal rights; defects in title; imprecision in
reserve estimates; success of future exploration and development
initiatives; operating performance of current operations; ability
to secure long term financing and capital, water management,
environmental and safety risks; seismic activity, weather and other
natural phenomena; failure to obtain necessary permits
and approvals from government authorities; changes in government
regulations and policies including tax and trade laws and policies;
ability to maintain and further improve labour relations; general
business, economic, competitive, political and social uncertainties
and other development and operating risks.
For further detail and discussion of risks and uncertainties
refer to the Annual Information Form available on the Company's
website.
CHANGES IN ACCOUNTING POLICIES INCLUDING INITIAL
ADOPTION
Adoption of new accounting policies
The accounting policies adopted during the period are consistent
with those of the previous financial year and corresponding
reporting period.
Accounting policies effective for future periods
The following accounting policies are effective for future
periods:
IFRS 9 – Financial instruments
This standard will replace IAS 39, Financial Instruments:
Recognition and Measurement. IFRS 9 has two classification
categories: amortized cost and fair value.
Classification of debt assets will be driven by the entity's
business model for managing the financial assets and the
contractual cash flow characteristics of the financial assets. A
'simple' debt instrument is measured at amortised cost if: a) the
objective of the business model is to hold the financial asset for
the collection of the contractual cash flows, and b) the
contractual cash flows under the instrument solely represent
payments of principal and interest.
All other financial assets, including investments in complex
debt instruments and equity investments must be measured at fair
value.
All fair value movements on financial assets must be recognised
in profit or loss except for equity investments that are not held
for trading (short-term profit taking), which may be recorded in
other comprehensive income (FVOCI). For financial liabilities that
are measured under the fair value option, entities will need to
recognise the part of the fair value change that is due to changes
in the entity's own credit risk in other comprehensive income
rather than profit or loss.
New hedging rules will also be included in the standard. These
will make testing for hedge effectiveness easier which means that
more hedges are likely to be eligible for hedge accounting. The new
rules will also allow more items to be hedged and relax the rules
on using purchased options and non-derivative financial instruments
as hedging instruments.
This standard is effective for years beginning on/after
January 1, 2015. The Group has
not assessed the impact of this new standard.
IFRS 2 – Share-based payment
The amendment clarifies the definition of a 'vesting condition'
and separately defines 'performance condition' and 'service
condition'.
This standard is effective for share-based payment transactions
for which the grant date is on or after 1
July 2014.
It has no material impact on the Group.
IFRS 3 – Business combinations
The standard is amended to clarify that an obligation to pay
contingent consideration which meets the definition of a financial
instrument is classified as a financial liability or as equity, on
the basis of the definitions in IAS 32, 'Financial instruments:
Presentation'. The standard is further amended to clarify that all
non-equity contingent consideration, both financial and
non-financial, is measured at fair value at each reporting date,
with changes in fair value recognised in profit and loss.
Consequential changes are also made to IFRS 9, IAS 37 and IAS
39.
The amendment is effective for business combinations where the
acquisition date is on or after 1 July
2014. The Group will apply the standard accordingly.
IAS 19 – Defined benefit plans and employee contributions
Amended to clarify the application of IAS 19 to plans that
require employees or third parties to contribute toward the cost of
benefits. This amendment does not affect accounting for voluntary
contributions.
The amendment is effective for years commencing on or after
1 July 2014. The Group does not
expect any material impact of this amendment.
IAS 16 – Property Plant and Equipment
The amendments distinguish bearer plants from other biological
assets as bearer plants are solely used to grow produce over their
productive lives. Bearer plants are seen as similar to an item of
machinery in a manufacturing process and therefore will be
classified as Property Plant and Equipment and accounted for under
IAS 16 instead of IAS41.
The standard is also amended to clarify that the use of a
revenue-based depreciation method is not appropriate.
Both of the amendments are effective for years beginning
on/after January 1, 2016. The Group
does not expect any material impact of this amendment.
IAS 38 – Intangible assets
This standard is amended to clarify that the use of a
revenue-based amortization method is not appropriate and the
presumption may only be rebutted in certain limited
circumstances.
The standard is effective for years beginning on/after
January 1, 2016. The Group does not
expect any material impact of this amendment.
IFRS 11 – Joint arrangements
The standard is amended to provide specific guidance on
accounting for the acquisition of an interest in a joint operation
that constitutes a business. The amendments are applicable to both
the acquisition of the initial interest in a joint operation and
the acquisition of additional interest in the same joint
operation.
This standard is effective for years beginning on/after
January 1, 2016. The Group will apply
the standard accordingly.
IFRS 15 – Revenue from contracts with customers
This is a new standard on revenue recognition, will supersede
IAS 18, Revenue, IAS 11, Construction Contracts related
interpretations.
This standard is effective for first interim periods within
years beginning on/after January 1,
2017. The Group has not assessed the impact of this new
standard.
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS
The following table sets forth unaudited information for each of
the eight quarters ended September 30,
2012 through to June 30,
2014. This information has been derived from our unaudited
consolidated financial statements which, in the opinion of
management, have been prepared on a basis consistent with the
audited consolidated financial statements and include all
adjustments, consisting only of normal recurring adjustments,
necessary for fair presentation of our financial position and
results of operations for those periods.
STATEMENT OF
OPERATIONS
|
Jun
30
2014
$000
|
Mar
31
2014
$000
|
Dec
31
2013
$000
|
Sep
30
2013
$000
|
Jun
30
2013
$000
|
Mar
31
2013
$000
|
Dec
31
2012
$000
|
Sep
30
2012
$000
|
Sales
Revenue
|
127,480
|
170,355
|
170,142
|
156,617
|
131,213
|
95,639
|
119,018
|
91,153
|
|
|
|
|
|
|
|
|
|
EBITDA (excluding
gain/(loss) on undesignated hedges and impairment
charge)
|
29,602
|
101,030
|
96,497
|
76,291
|
42,495
|
47,076
|
67,100
|
28,614
|
|
|
|
|
|
|
|
|
|
Earnings/(loss) after
income tax and before gain/(loss) on undesignated hedges (net of
tax and impairment charge)
|
993
|
59,869
|
45,810
|
43,125
|
(2,647)
|
6,490
|
23,120
|
328
|
|
|
|
|
|
|
|
|
|
Net
Profit/(Loss)
|
(2,123)
|
58,945
|
(28,159)
|
43,735
|
(70,491)
|
7,059
|
24,197
|
(397)
|
Net earnings/(loss)
per share
|
Basic
|
$(0.01)
|
$0.20
|
$(0.10)
|
$0.15
|
$(0.24)
|
$0.02
|
$0.09
|
$(0.00)
|
|
|
|
|
|
|
|
|
|
Diluted
|
$(0.01)
|
$0.19
|
$(0.10)
|
$0.14
|
$(0.24)
|
$0.02
|
$0.09
|
$(0.00)
|
The most significant factors causing variation in the results
are the volatility of the gold price and copper price, the
variability in the grade of ore mined from the Macraes, Reefton and
Didipio mines, the timing of waste stripping activities, movements
in inventories and large movements in foreign exchange rates
between the USD and the NZD.
NON-GAAP MEASURES
Throughout this document, we have provided measures prepared
according to IFRS ("GAAP") as well as some non-GAAP performance
measures. As non-GAAP performance measures do not have a
standardised meaning prescribed by GAAP, they are unlikely to be
comparable to similar measures presented by other companies.
We provide these non-GAAP measures as they are used by some
investors to evaluate OceanaGold's performance. Accordingly, such
non-GAAP measures are intended to provide additional information
and should not be considered in isolation, or a substitute for
measures of performance in accordance with GAAP.
Earnings before interest, tax, depreciation and amortisation
(EBITDA) is one such non-GAAP measure and a reconciliation of this
measure to net Profit / (Loss) is provided on page 13.
All-In Sustaining Costs per ounce sold is based on the World
Gold Council methodology and is a non-GAAP measure.
Cash costs per ounce sold is another such non-GAAP measures and
a reconciliation of these measures to cost of sales, is provided on
the next page.
Statement of
Operations
|
|
Q2
Jun 30
2014
|
Q1
Mar 31
2014
|
Q2
Jun 30
2013
|
Half
Year
Jun
2014
|
Half
Year
Jun
2013*
|
Cost of sales,
excluding depreciation and amortisation
|
$000
|
88,543
|
63,183
|
80,437
|
151,726
|
120,312
|
|
|
|
|
|
|
|
Selling costs and
sundry general and administration
|
$000
|
4,797
|
8,573
|
3,786
|
13,370
|
4,151
|
|
|
|
|
|
|
|
By-product
credits
|
$000
|
(37,095)
|
(55,768)
|
(35,988)
|
(92,863)
|
(35,988)
|
|
|
|
|
|
|
|
Total cash costs (net
of by-product credits)
|
$000
|
56,245
|
15,988
|
48,235
|
72,233
|
88,475
|
|
|
|
|
|
|
|
Gold sales from
operating mines
|
ounces
|
72,294
|
94,050
|
70,706
|
166,344
|
129,291
|
|
|
|
|
|
|
|
Cash operating
costs
|
$/ounce
|
778
|
170
|
682
|
435
|
684
|
* Note: Commercial
production was declared effective April 1, 2013 at the Didipio Mine
and costs net any revenue received prior to this date were
capitalised. Ounces sold reflect Didipio's contribution for
the period from April 1, 2013 to December 31, 2013
|
ADDITIONAL INFORMATION
Additional information referring to the Company, including the
Company's Annual Information Form, is available on SEDAR at
www.sedar.com and the Company's website at www.oceanagold.com.
DISCLOSURE CONTROLS AND PROCEDURES
The Chief Executive Officer and Chief Financial Officer
evaluated the effectiveness of the Company's disclosure controls
and procedures as at June 30,
2014. Based on that evaluation, the Chief Executive Officer
and the Chief Financial Officer concluded that the design and
operation of these disclosure controls and procedures were
effective as at June 30, 2014 to
provide reasonable assurance that material information relating to
the Company, including its consolidated subsidiaries, would be made
known to them by others within those entities.
INTERNAL CONTROL OVER FINANCIAL REPORTING
Management of OceanaGold, including the Chief Executive Officer
and Chief Financial Officer, have evaluated the effectiveness of
the design and operation of the Company's internal controls over
financial reporting and disclosure controls and procedures as of
June 30, 2014. Based on this
evaluation, the Chief Executive Officer and Chief Financial Officer
have concluded that they were effective at a reasonable assurance
level.
There were no significant changes in the Company's internal
controls, or in other factors that could significantly affect those
controls subsequent to the date the Chief Executive Officer and
Chief Financial Officer completed their evaluation, nor were there
any significant deficiencies or material weaknesses in the
Company's internal controls requiring corrective actions.
The Company's management, including the Chief Executive Officer
and the Chief Financial Officer, does not expect that its
disclosure controls and internal controls over financial reporting
will prevent all errors and fraud. A cost effective system of
internal controls, no matter how well conceived or operated, can
provide only reasonable not absolute, assurance that the objectives
of the internal controls over financial reporting are achieved.
NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES OR TO US PERSONS AND NOT FOR
DISTRIBUTION TO US NEWSWIRE SERVICE
SOURCE OceanaGold Corporation