(All financial figures in US Dollars unless otherwise stated)
(BRISBANE) OceanaGold Corporation (TSX: OGC) (ASX: OGC) (the “Company”) is pleased to announce the completion of the Haile Gold Mine (“Haile”) National Instrument 43-101 Technical Report (“Technical Report”). The Haile Technical Report will be filed on SEDAR and with the Australian Securities Exchange within 45 days.
Note that all Haile Technical Report forecasts are based on Mineral Reserves only. The results of the Technical Report are not to be used as formal guidance. The Company expects to provide formal annual guidance for production, costs and capital based on Board approved budgets in the first quarter of 2021.
Key Highlights
• Life of mine extended to 2033 based on Mineral Reserves only
• Reserve Gold Price Case (“Reserve Case”) pre-tax net present value (“NPV”) (5% discount rate) of approximately US$930 million, after-tax of US$892 million at a flat gold price of $1,500/oz
• Market Consensus Gold Pricing Case (“Market Pricing Case”) pre-tax NPV5% of approximately US$1.1 billion, after-tax of US$1.05 billion
• Reserve Case life of mine pre-tax undiscounted free cash flows of approximately $1.3 billion, after-tax of $1.2 billion
• Market Pricing Case life of mine pre-tax undiscounted free cash flows of approximately $1.5 billion, after-tax of $1.4 billion
• Increased Proven & Probable Gold Reserves by 60,000 ounces, Measured & Indicated Resources by 120,000 ounces and Inferred Resources by 40,000 ounces, all net of mine depletion as at June 30, 2020
• Approximate life of mine cash costs of $590 per ounce and All-In Sustaining Costs (“AISC”) of $800 per ounce
• Horseshoe Underground optimal mine sequence confirmed as bottom-up with development expected to commence in 2021 and first production targeted for late 2022
• Average annual life of mine gold production of 180,000 - 200,000 ounces, increasing to approximately 250,000 ounces when on combined open pit and underground mill feed between 2023 and 2027
• Underground exploration targets advancing including Horseshoe, Snakeshoe and Palomino with new drill targets at Aquarius and Pisces (both not included in the Technical Report)
Michael Holmes, President and CEO of OceanaGold said, “We are pleased with the results of the updated Haile Technical Report which demonstrate long-term value and significant organic growth opportunity for the operation. The Reserve Case estimates the pre-tax NPV at $930 million while the pre-tax NPV using market consensus gold prices is estimated at $1.1 billion. These results, coupled with the significant underground exploration upside, makes the Haile Gold Mine a top-tier asset in a great jurisdiction.”
“Haile has been a commercial operation for approximately three years. Despite numerous challenges during this time, we have successfully increased the process plant capacity by approximately 75% from nameplate, have significantly increased mining rates while reducing unit costs, upskilled the local workforce and attracted experienced operations managers who have improved the safety culture and operational productivity. We continue to adapt to the extreme weather patterns 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.”
“We evaluated the Horseshoe Underground mine sequence and confirmed a bottom-up approach as the optimal mine sequence. We plan to commence development of the Horseshoe Underground in late 2021 with first production targeted for late in 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 we have intersected significant zones of mineralisation (Snakeshoe) 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 ounces a year at first quartile costs when both open pit and underground ore is fed through the mill.”
Updated Mineral Reserves and Resources
As at June 30, 2020, the Company increased Haile Proven and Probable Mineral Reserves from December 31, 2019 by 60,000 ounces of gold, net of mine depletion.
Table 1 – Proven & Probable Mineral Gold Reserves (June 30, 2020)
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