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OceanaGold achieves record yearly production

18th January 2018

By: Mia Breytenbach

Creamer Media Deputy Editor: Features

     

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JOHANNESBURG (miningweekly.com) – Dual-listed gold miner OceanaGold has ended 2017 on a high note, with the company on Thursday reporting record full year and fourth-quarter gold production of 574 606 oz, and 166 211 oz, respectively.

The record quarterly production led to OceanaGold achieving its yearly guidance for the sixth consecutive year. The company was aiming to produce between 550 000 oz and 600 000 oz of gold, and between 18 000 t and 19 000 t of copper.

Gold production for the year was 38% higher than in 2016, and as a result of new production from the Haile gold mine, in the US and record yearly production from Didipio gold mine in the Philippines.

The fourth-quarter gold production was 22% higher than the previous quarter and a result of increased production at Didipio, in the Philippines, Macraes, in New Zealand and Haile in the US.

Full-year copper production was 18 351 t, including 3 687 t in the fourth quarter.

The company recorded sales of 555 632 oz of gold and 18 091 t of copper, including sales of 168 586 oz of gold and 4 842 t of copper in the fourth quarter.

Consolidated unaudited all-in sustaining costs of $617/oz sold was within the guidance range of $600/oz to $650/oz, while the consolidated cash costs were $349/oz sold.
The Haile gold mine produced 118 466 oz of gold in 2017, 50 134 oz of which was produced in the fourth quarter. The quarter-on-quarter 60% increase in production was mainly attributed to higher mill feed and improved recoveries.

OceanaGold president and CEO Mick Wilkes said that the Haile operation’s recoveries were above 80% and mill availability at about 90% in the first full quarter of commercial operations.

“The process plant is operating at nameplate capacity and we expect to commence permitting of the expansion in the second quarter,” he noted.

Production at Haile is expected to be stronger in 2018 than in 2017.

Didipio achieved record yearly gold production and exceeded the top end of its 2017 gold production guidance range with 176 790 oz produced, including 39 256 oz produced in the fourth quarter.

Production at Didipio this year is expected to be lower, as mill feed will predominantly be sourced from lower-grade stockpiles as the underground operations ramp up.

Wilkes added, however, that although production at Didipio would be lower in 2018, the ramp-up of the underground was progressing well and that the company expected a return to stronger production in 2019 and beyond.

In New Zealand, Waihi produced 119 084 oz of gold, including 31 761 oz of gold produced in the fourth quarter. The quarter-on-quarter decrease in production was previously forecast and a result of lower head grade. Production at Waihi in 2018 is expected to be lower than in 2017 as a result of mine sequencing where lower grades from the underground will be processed.

At Macraes, the operation produced 160 266 oz of gold, including 45 060 oz of gold produced in the fourth quarter. The quarter-on-quarter increase was attributed to a higher head grade, yet production was lower than guided as a result of delays in accessing higher grade ore from Coronation North.

Production at Macraes for this year is expected to be higher as the operation is now into higher grade ore at Coronation North, which will be the main source of feed for the year.

Wilkes reported that OceanaGold expected to start the permitting process in the first quarter of this year for mine life extensions at Waihi.

The miner further increased its cash balance from $61-million as at September 30, to $73-million and reduced net debt to $176-million following a debt facility repayment of about $73-million.

Wilkes noted that OceanaGold increased its balance sheet as its drawn credit facilities reduced to $200-million following a repayment of about $73-million from cash flows in the fourth quarter.

“We look ahead to 2018 where we have many catalysts across our business and we will continue to advance our exploration programme to create organic value for our shareholders. As always, we continue to employ strict discipline and an approach to investment of any nature that focuses on margin and returns,” he stated.

The company will release its complete 2017 audited financial and operational results on February 22.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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