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copper|exploration|financial|gold|health|mining|project|safety|underground|maintenance|environmental|operations

OceanaGold sets production targets for 2020

11th February 2020

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Dual listed gold miner OceanaGold has set a production target of between 360 000 oz and 380 000 oz for the full 2020, with the Haile operation, in the US, expected to deliver an additional 25% of production.

“OceanaGold is highly committed to regaining its status as one of the best gold mining companies by focusing on what we do well and controlling what we can,” said CEO and president Mick Wilkes.

“This means operating our existing portfolio in the most optimal way while doing so to the highest environmental and health and safety standards that we have successfully operated to for the past 30 years.

“We have always been focused on enhancing profitability and delivering strong returns to shareholders and we remain disciplined in allocating capital.”

Wilkes told shareholders that the additional gold production at Haile for 2020 will offset the year-on-year decline in production at the Waihi project, in New Zealand, which is transitioning from the Correnso to the Martha underground.

“The Haile mine plan continues to evolve to further enhance openpit operations and increase mine productivity. As a result of these changes that we are currently implementing, the mine is expected to gain operational flexibility, which also allows us to revisit the Horseshoe underground mine plan.”

Haile is expected to produce between 180 000 oz and 190 000 oz of gold for the 2020 financial year, at all-in sustaining costs of between $650/oz and $700/oz.

Wilkes said that at Waihi, the development of the Martha underground operation was going to plan, with the project to be in production by the second quarter of 2021, as OceanaGold continued to advance the Waihi district study, which is scheduled for completion by the second quarter of this year.

“We are very excited about the work we are doing at Waihi as we set up the operation for at least a decade of production,” he added.

For 2020, Waihi is expected to produce between 11 000 oz and 12 000 oz of gold in the first quarter of 2020, with an additional 7 000 oz to 8 000 oz in the fourth quarter, as mining transitions from Correnso to the Martha underground.

Meanwhile, Wilkes noted that the Macraes operation remained stable, delivering consistently positive performance and free cash flows.

“We continue to advance our organic growth opportunities at Macraes, particularly the Golden Point underground study, which is expected to be completed in the second half of 2020.”

Macraes is expected to produce between 160 000 oz and 170 000 oz of gold in 2020, at a cost of between $725/oz and $775/oz.

Meanwhile, the Didipio operation, in the Philippines, remains in a state of operational readiness as OceanaGold awaits the renewal of its financial and technical assistance agreement, which is currently under review with the Office of the President.

Once operations have been resumed, trucking at Didipio would resume within a week, while the process plant would resume within a two-week period, and the underground mine within three weeks, before ramp-up would start over a four- to six-week period.

Once fully ramped up, the mine will produce some 10 000 oz of gold and 1 000 t of copper a month.

OceanaGold is currently spending between $8-million and $10-million a quarter on holding costs associated with maintaining the workforce at Didipio, and for care-and-maintenance costs for both the underground mine and the processing plant.

Wilkes said that should the renewal process be protracted beyond the current expectations, the Didipio operation could transition to full care and maintenance, with holding costs expected to reach A$3-million a quarter, and ramp-up to take up to 12 months to complete, depending on the time in which the renewal is granted.

OceanaGold has set aside between $220-million and $255-million for capital investment in 2020, which will include general operating capital and exploration.

Edited by Creamer Media Reporter

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