The Haile mine, in South Caroline, which has faced numerous challenges in its three years of operation, has long-term value and offers significant organic growth opportunities, says OceanaGold president and CEO Michael Holmes.
In an updated technical report, based on mineral reserves, the life-of-mine yearly production is estimated to be 180 000 oz to 200 000 oz, increasing to about 250 000 oz between 2023 and 2027, from a combination of opencut and underground mining.
The study has extended Haile’s mine life to 2033.
The reserve gold price case of $1 500/oz calculates an aftertax net present value (NPV), at a 5% discount, of about $892-million and at market consensus gold prices, a NPV of $1.05-billion.
“These results [from the updated Haile technical report], coupled with the significant underground exploration upside, makes the Haile Gold Mine a top-tier asset in a great jurisdiction,” said Holmes this week.
He pointed out that, in the three years of commercial production, OceanaGold had managed to increase the process plant capacity by about 75% from nameplate, had increased mining rates, while reducing unit costs and upskilling local workforce.
“We continue to adapt to the extreme weather pattern of the last few years in the Carolinas that have at times hampered mining productivity. Through our experience of operating Haile over the past few years, we have updated its mine plan to deliver over the long term.”
OceanaGold has also evaluated the Horseshoe underground mine sequence and has confirmed it as a bottom-up development that would start in 2021, with first production targeted for late 2022.
Gold mineralisation below the current reserve open pit design represents significant underground growth opportunity for the company with further drilling being planned to convert inferred resources (Horseshoe, Palomino), define new resources where significant zones of mineralisation (Snakeshoe) were intersected and test new underground targets Pisces and Aquarius.
Underground ore feed is an important part of Haile’s future operation. Its importance is illustrated in the updated technical report with average annual gold production of 250 000 oz/y at first quartile costs when both openpit and underground ore is fed through the mill,” said Holmes.
The approximate life-of-mine cash costs are estimated at $590/oz and the all-in sustaining costs at $800/oz.