(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./
VANCOUVER, BC, May 2, 2023
/CNW/ - OceanaGold Corporation (TSX: OGC) ("OceanaGold" or the
"Company") reported its financial and operational results for the
three months ended March 31, 2023. The consolidated financial
statements and the Management Discussion and Analysis ("MD&A")
are available at www.oceanagold.com.
Gerard Bond, President and CEO of
OceanaGold, said "OceanaGold safely and responsibly delivered in
line with guidance in the first quarter. The Company had a record
low injury rate as Didipio and Haile delivered strong quarterly
production outcomes. While our New
Zealand operations had a challenging first quarter as
expected, we anticipate stronger performance from them over the
remainder of the year.
Looking ahead, we remain focused on safely delivering on our
2023 guidance, maximizing free cash flow and progressing our
organic growth and exploration options. The Haile underground mine
was officially opened in the quarter, the decline has
advanced to the top of the orebody and we remain on track to
deliver first ore from underground in Q4 2023."
Highlights
- Achieved a company record low total recordable injury frequency
rate of 1.9 per million hours worked.
- On-track to meet full-year 2023 consolidated production, cost
and capital guidance.
- First quarter consolidated gold production of 118,124 ounces
and 3,511 tonnes of copper.
- First quarter All-In Sustaining Costs ("AISC") of $1,567 per ounce on gold sales of 112,082
ounces.
- First quarter revenue of $244
million, EBITDA of $100
million and NPAT of $39
million.
- Adjusted earnings of $0.06 per
share and operating cash flow of $0.14 per share.
- Free cash flow of $(16.4)
million, lower due to timing of gold sales and working
capital movements.
- Net debt of $191 million as at
March 31, 2023, at a leverage ratio
of 0.30 times.
- Haile expansion remains on track, with underground decline
advanced to the first production level.
- Macraes ball mill trunnion repair completed March 30, plant fully operational in April.
- Dividend reinstated, with a semi-annual dividend of
$0.01 paid April 28, 2023.
- Linda Broughton appointed as
non-executive director effective April 24,
2023.
- Marius van Niekerk appointed
Chief Financial Officer effective May 24,
2023.
Table 1 – Production and Cost Results Summary
Quarter ended
31 March 2023
|
|
Haile
|
Didipio
|
Waihi
|
Macraes
|
Consolidated
|
Q1
2023
|
Q4
2022
|
Q1
2022
|
Production, Sales
& Costs
|
|
|
|
|
|
|
|
|
Gold
Produced
|
koz
|
48.1
|
33.0
|
10.3
|
26.7
|
118.1
|
120.9
|
134.0
|
Gold Sales
|
koz
|
41.7
|
33.6
|
9.9
|
26.8
|
112.1
|
118.7
|
129.2
|
Average Gold
Price
|
US$/oz
|
1,903
|
1,958
|
1,910
|
1,898
|
1,919
|
1,769
|
1,915
|
Copper
Produced
|
kt
|
—
|
3.5
|
—
|
—
|
3.5
|
3.5
|
3.5
|
Copper Sales
|
kt
|
—
|
3.3
|
—
|
—
|
3.3
|
3.5
|
3.7
|
Average Copper
Price (2)
|
US$/lb
|
—
|
4.29
|
—
|
—
|
4.29
|
3.91
|
4.89
|
Cash Costs
|
US$/oz
|
658
|
574
|
1,366
|
1,349
|
861
|
880
|
630
|
Site AISC
(1)
|
US$/oz
|
1,537
|
585
|
2,168
|
2,171
|
1,567
|
1,602
|
1,084
|
Operating
Physicals
|
|
|
|
|
|
|
|
|
Material
Mined
|
kt
|
9,571
|
429
|
223
|
12,593
|
22,816
|
23,283
|
22,047
|
Waste Mined
|
kt
|
8,578
|
40
|
128
|
10,869
|
19,615
|
19,453
|
18,072
|
Ore Mined
|
kt
|
993
|
389
|
96
|
1,724
|
3,202
|
3,830
|
3,974
|
Mill Feed
|
kt
|
803
|
1,053
|
97
|
1,142
|
3,095
|
3,481
|
3,275
|
Mill Feed
Grade
|
g/t
|
2.23
|
1.09
|
3.52
|
0.89
|
1.39
|
1.28
|
1.50
|
Gold
Recovery
|
%
|
83.4
|
88.8
|
93.4
|
81.3
|
84.8
|
84.6
|
84.0
|
Capital
Expenditures
|
|
|
|
|
|
|
|
|
General
Operations
|
US$m
|
11.4
|
—
|
0.3
|
9.1
|
20.6
|
31.8
|
15.1
|
Pre-strip &
Capitalised Mining
|
US$m
|
23.5
|
0.2
|
6.9
|
11.3
|
42.0
|
37.9
|
30.8
|
Growth
|
US$m
|
11.6
|
1.4
|
1.3
|
0.7
|
15.0
|
17.2
|
17.0
|
Exploration
|
US$m
|
1.1
|
0.2
|
2.3
|
0.7
|
4.3
|
5.6
|
5.8
|
Total Capital
Expenditures
|
US$m
|
47.6
|
1.8
|
10.8
|
21.8
|
82.0
|
92.5
|
68.7
|
(1)
|
Site AISC are exclusive
of corporate general and administrative expenses but include share
based remuneration paid to eligible site employees, Consolidated
AISC is inclusive of corporate general and administrative expenses
which includes share based remuneration paid to eligible
non-operations corporate employees. Cash Costs and All-In
Sustaining Costs are reported on ounces sold and net of by-product
credit basis.
|
(2)
|
The Average Copper
Price Received calculated includes marked to market revaluations on
unfinalized shipments as well as final adjustments on prior period
shipments per accounting requirements.
|
Notes:
|
|
•
|
Consolidated capital
excludes rehabilitation and closure costs at Reefton and corporate
capital projects not related to a specific operating region; these
totalled $0.8 million and $0.3 million respectively in the first
quarter
|
•
|
Capital and exploration
expenditure by location excludes related regional greenfield
exploration where applicable.
|
Table 2 – Financial Summary
Quarter ended 31
March 2023
(US$m)
|
Q1
31 Mar
2023
|
Q4
31 Dec 2022
|
Q1
31 Mar 2022
|
Revenue
|
243.9
|
238.4
|
285.7
|
Cost of sales,
excluding depreciation and amortisation
|
(118.5)
|
(129.0)
|
(114.4)
|
General and
administration – indirect taxes (1)
|
(5.6)
|
(3.5)
|
(4.5)
|
General and
administration – other
|
(18.2)
|
(13.8)
|
(11.1)
|
Foreign currency
exchange gain/(loss)
|
(2.1)
|
16.3
|
1.9
|
Other
income/(expense)
|
0.5
|
0.9
|
0.4
|
EBITDA (excluding
impairment expense)
|
100.0
|
109.3
|
158.0
|
Depreciation and
amortisation
|
(45.1)
|
(52.5)
|
(55.3)
|
Net interest expense
and finance costs
|
(5.5)
|
(4.8)
|
(2.8)
|
Earnings before
income tax (excluding impairment expense)
|
49.4
|
52.0
|
99.9
|
Income tax
(expense)/benefit on earnings
|
(10.5)
|
(11.0)
|
(18.1)
|
Earnings after
income tax (excluding impairment expense)
|
38.9
|
41.0
|
81.8
|
Impairment of
exploration/property expenditure / investment (3)
|
—
|
—
|
(3.2)
|
Net Profit/(loss)
after Tax
|
38.9
|
41.0
|
78.6
|
Basic earnings/(loss)
per share
|
$0.06
|
$0.06
|
$0.11
|
Earnings/(loss) per
share - fully diluted
|
$0.05
|
$0.05
|
$0.11
|
1.
|
Represents
production-based taxes in the Philippines, specifically excise tax,
local business and property taxes.
|
2.
|
There was a write-off
of capitalised exploration projects in New Zealand as at 31 March
2022.
|
(3)
|
EBITDA, EBIT and
Earnings after income tax are non-GAAP measures. Refer to the
Accounting & Controls section of the MD&A report for an
explanation.
|
Table 3 - Cash flow Summary
Quarter ended 31
March 2023
(US$m)
|
Q1
31 Mar
2023
|
Q4
31 Dec 2022
|
Q1
31 Mar 2022
|
Cash flows from
Operating Activities
|
65.2
|
100.2
|
143.8
|
Cash flows used in
Investing Activities
|
(81.6)
|
(90.2)
|
(71.9)
|
Cash flows from /
(used) in Financing Activities
|
(6.6)
|
(57.3)
|
(8.7)
|
Free Cash
Flow
|
(16.4)
|
2.7
|
63.2
|
Note: Free Cash Flow
has been calculated as cash flows from operating activities, less
cash flow used in investing activities in 2023. In the prior
year, Free Cash Flow was calculated as cash flows from operating
activities, less cash flow used in investing activities less
finance lease principal payments which are reported as part of cash
flow used in financing activities in 2022.
|
Operations
The Company produced 118,124 ounces of gold and 3,511 tonnes of
copper in the first quarter of 2023. First quarter gold production
was 2% lower than the previous quarter and 12% lower than
corresponding period in 2022. The quarter-on-quarter reduction was
mainly driven by lower Macraes production, where mill throughput
was impacted due to the need to repair a crack in the feed end
trunnion in one of the two ball mills (ML-02) as reported in
February. A repair of the ML-02 trunnion was completed in late
March with a full feed end replacement targeted for installation in
early 2024. This was partially offset by higher quarter-on-quarter
production at both Haile and Didipio. Waihi was broadly flat
quarter-on-quarter.
On a consolidated basis, the Company recorded a first quarter
AISC of $1,567 per ounce on gold
sales of 112,082 ounces and copper sales of 3,254 tonnes. This was
a 2% reduction in AISC compared to the previous quarter and a 45%
increase compared to the corresponding period in 2022. The
quarter-on-quarter reduction was driven by higher by-product
credits and lower total sustaining capital investments, which more
than offset lower comparative gold sales. Current quarter gold
sales were negatively impacted by the timing of sales and gold in
transit at the end of the quarter. The increase in AISC compared to
the corresponding period in 2022 reflects lower gold sold plus
higher sustaining capital investments.
Haile produced 48,112 ounces of gold in the first quarter, a 16%
increase compared to the previous quarter. The quarter-on-quarter
increase was driven mainly by a higher average grades consistent
with the mine plan. Haile's first quarter AISC was $1,537 per ounce, an 12% reduction compared to
the previous quarter. The quarter-on-quarter reduction was mainly
due to the higher mined grade processed which resulted in lower
unit cash costs.
During the first quarter progress continued on the Haile
expansion following completion of the permitting process in Q4
2022. This includes expanded tailings storage, additional waste
containment facilities plus the Haile underground development. To
date, approximately 550 metres of the main underground decline has
been completed with the decline reaching the top of the ore body.
First ore from Haile underground remains on track for delivery to
the mill in the fourth quarter of 2023.
Didipio produced 33,034 ounces of gold and 3,511 tonnes of
copper in the first quarter, a 14% increase in gold production
compared to the previous quarter. Copper production was flat
quarter-on-quarter. The quarter-on-quarter increase in gold
production was driven by a combination of higher mill throughput
and a higher average mill feed grade. Didipio's first quarter AISC
was $585 per ounce on sales of 33,583
ounces of gold and 3,254 tonnes of copper. This AISC per
ounce was a 45% reduction on the previous quarter mainly due to
higher comparative gold sales and lower sustaining capital
investments.
Macraes produced 26,682 ounces of gold for the first quarter, a
33% reduction compared to the previous quarter. The lower
quarter-on-quarter production was mainly due to reduced mill feed
rates due to the crack in the Ball Mill ML-02 feed end trunnion as
reported in February. A repair was completed in late March.
Macraes first quarter AISC was $2,171
per ounce, a 58% increase compared to the previous quarter mainly
due to the lower volume of mill feed. The Company expects Macraes
to deliver a stronger operational results over the balance of 2023
following completion of the repair on Ball Mill ML-02.
Waihi produced 10,296 ounces of gold for the first quarter.
While this was broadly in-line with the previous quarter, as
previously reported Waihi experienced abnormally high rainfall in
the beginning of 2023 (over 850mm in January followed by over 250mm
in the first 2 weeks of February). This impacted productivity in
the underground mine, especially in the lower remnant mining areas
of Edward and Empire West. Waihi's first quarter AISC was
$2,168 per ounce, a 7% increase
compared to the previous quarter. The quarter-on-quarter increase
was mainly driven by sales timing, with slightly lower gold sales
in the current quarter whereas gold production was broadly
comparative across the periods.
Financial
First quarter consolidated revenue of $243.9 million was similar to the previous
quarter, with 6% lower quarter-on-quarter gold sales largely offset
by higher average metal prices. The lower gold sales mainly related
to Macraes, which was partially offset by higher gold sales from
Didipio. Compared to the corresponding period in 2022, revenue was
15% lower with the comparative quarter being one with record
quarterly revenue driven by record quarterly gold production at
Haile plus a materially higher average copper price.
First quarter consolidated EBITDA was $100.0 million, a 9% reduction relative to the
previous quarter. The quarter-on-quarter reduction was mainly due
to higher G&A costs and a non-cash unrealised foreign exchange
translation loss of $2.1 million in
the current period whereas the prior period has an unrealised
foreign exchange gain of $16.3
million (both mainly relate to movements in the New Zealand currency).
First quarter Net Profit After Tax was $38.9 million or $0.06 per share fully diluted compared with a Net
Profit After Tax of $41.0 million in
the previous quarter. First quarter Adjusted Net Profit After Tax,
excluding non-cash unrealised foreign exchange translation
gains/losses, was $40.1 million or
$0.06 per share fully diluted
compared with an Adjusted Net Profit After Tax of $29.9 million or $0.04 per share in the previous quarter.
First quarter cash flows from operating activities were
$65.2 million, which was 35% below
the previous quarter reflecting both a lower EBITDA and the impact
of working capital movements.
First quarter cash flows used in investing activities totalled
$81.6 million, which was 13% below
the prior quarter, due to lower quarter-on-quarter general
operations sustaining capital investments, mainly at Didipio,
and marginally lower growth capital and exploration expenditure.
Despite the lower first quarter spend, expected capital expenditure
plans for 2023 remain on track and in-line with full year
guidance.
First quarter cash flow per share, before working capital
movements, was $0.14 per share fully
diluted, a 17% increase on the previous quarter.
As at March 31, 2023, the Company's available revolving
credit facilities remained at $250 million, with $100 million undrawn and available. The Company
had immediately available liquidity of $158
million including $58 million
in cash. The Company's Free Cash Flow for the first quarter was
$(16.4) million, Free Cash Flow
during the quarter was negatively impacted by the timing of gold
sales and working capital movements, both of which are expected to
normalize across balance of the year.
The Company's net debt position, inclusive of equipment leases,
increased to $191.1 million from
$170.2 million in the previous
quarter. The Company's leverage ratio remained low at 0.30 times as
of March 31, 2023.
As at March 31, 2023, the Company's available revolving
credit facilities remained at $250 million, with $100 million undrawn and available. The Company
had immediately available liquidity of $158
million including $58 million
in cash.
Consolidated capital and exploration expenditure for the first
quarter of 2023 totalled $83.1
million, an 11% decrease quarter-on-quarter primarily
related to lower general operations sustaining capital
expenditures, mainly at Didipio, plus marginally lower growth
capital investments and exploration expenditure. This was partially
offset by an increase in capitalised pre-strip at Haile consistent
with the mine plan. Relative to the corresponding prior period in
2022, first quarter capital and exploration expenditure was 21%
higher, largely related to increased pre-stripping and capitalised
mining costs and general operations sustaining capital.
Exploration expenditure of $4.3
million for the first quarter was focused primarily on
conversion drilling at Martha Underground and Wharekirauponga
(Waihi), Golden Point (Macraes),
Palomino (Haile), and definition and concept validation drilling at
Didipio.
Conference Call
Senior management will host a conference call / webcast to
discuss the results on Wednesday, May 3,
2023, at 10:00 am Eastern
Time.
Webcast Details:
To register, please copy and paste the link into your browser:
https://app.webinar.net/El1ALg4nvxG
Conference Call Details:
Toll-free participant dial in North
America: +1 888-390-0546
Participant dial in North
America: +1 416-764-8688
All other countries: + 1 778-383-7413
To join the conference call without operator assistance, you may
register and enter your phone number at
https://emportal.ink/3G0Q301 to receive an instant
automated call back.
If you are unable to attend the call, a recording will be made
available on the Company's website.
About OceanaGold
OceanaGold is a multinational gold producer committed to the
highest standards of technical, environmental and social
performance. We are committed to excellence in our industry by
delivering sustainable environmental and social outcomes for our
communities, and strong returns for our shareholders. Our global
exploration, development, and operating experience has created a
strong pipeline of organic growth opportunities and a portfolio of
established operating assets including the Haile Gold Mine in
the United States of America,
Didipio Mine in the Philippines,
and the Macraes and Waihi operations in New Zealand.
www.oceanagold.com | Twitter: @OceanaGold
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 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