/NOT FOR DISSEMINATION OR DISTRIBUTION IN
(All financial figures in US Dollars unless otherwise stated)
Highlights
- Didipio's Financial or Technical Assistance Agreement ("FTAA") renewed, restart of operations to commence in the near-term.
- Total Recordable Injury Frequency Rate ("TRIFR") of 3.7 per million hours worked compared to 3.9 per million hours worked at the end of the first quarter.
- First half of 2021 consolidated gold production of 177,039 ounces at All-In Sustaining Costs ("AISC") of
$1,227 per ounce on gold sales of 178,781 ounces. - Consolidated second quarter gold production of 93,848 ounces at AISC of
$1,226 per ounce on gold sales of 95,934 ounces. - First half revenue of
$331.5 million with adjusted Earnings before Interest, Depreciation and Amortisation ("EBITDA") of$161.9 million . - Second quarter revenue of
$182.6 million with adjusted EBITDA of$95.4 million and adjusted net profit of$36.9 million or$0.05 per share fully diluted. - Total immediate available liquidity of
$142.3 million , including$92.3 million of cash and$50 million in available undrawn credit facilities as at30 June 2021 . - Advanced organic growth projects, including the completion of 5,210 metres of underground development year-to-date ("YTD") at Martha Underground ("MUG") and successful replacement of the SAG mill with the recommencement of processing late June.
Paul Benson appointed Chairman of the Board, effectiveOctober 1, 2021 .- Revised full year 2021 guidance (excluding Didipio) to 350,000 to 370,000 gold ounces at AISC of
$1,200 to$1,250 per ounce; update to be provided in the near-term to include Didipio.
"Based on year-to-date performance we have refined our expectations for the full year. We currently expect consolidated production of 350,000 to 370,000 gold ounces at AISC of
"Renewal of the FTAA at Didipio was one of our key priorities this year, and I'm extremely proud to say we delivered. The staged restart of the asset is underway with the current focus on the rehire and training of our skilled Philippine workforce. We expect to restart processing well prior to year-end, initially sourcing mill feed from existing stockpiles at site. Our expectation is to also transport and sell approximately 18,500 gold ounces and 3,500 tonnes of copper in concentrate on site by early fourth quarter. The rehire and retraining of the workforce, as well as the ongoing risks associated with the COVID-19 pandemic, could impact the timeline associated with returning to full underground production of 1.6Mtpa, which could take up to 12 months."
Table 1 – Production and Cost Results Summary
Quarter ended | Haile | Didipio | Waihi | Macraes | Consolidated | ||
Q2 2021 | Q2 2020 | ||||||
Gold Produced | koz | 57.2 | - | 3.9 | 32.7 | 93.8 | 58.7 |
Gold Sales | koz | 59.3 | - | 3.4 | 33.2 | 95.9 | 61.9 |
Average Gold Price | US$/oz | 1,825 | - | 1,799 | 2,024 | 1,893 | 1,523 (1) |
Copper Produced | kt | - | - | - | - | - | - |
Copper Sales | kt | - | - | - | - | - | - |
Average Copper Price | US$/lb | - | - | - | - | - | - |
Material Mined | kt | 11,047 | - | 75 | 12,882 | 24,004 | 20,654 |
Waste Mined | kt | 10,266 | - | 12 | 11,625 | 21,904 | 18,635 |
Ore Mined | kt | 781 | - | 62 | 1,257 | 2,101 | 2,019 |
kt | 836 | - | 43 | 1,124 | 2,003 | 2,181 | |
g/t | 2.49 | - | 3.13 | 1.09 | 1.72 | 1.07 | |
Gold Recovery | % | 85.5 | - | 90.7 | 82.7 | 84.1 | 78.3 |
Cash Costs | US$/oz | 615 | - | 1,215 | 897 | 734 | 946 |
Site All-In Sustaining Costs(2) | US$/oz | 922 | - | 1,223 | 1,524 | 1,226 | 1,265 |
Year to date | Haile | Didipio | Waihi | Macraes | Consolidated | ||
YTD 2021 | YTD 2020 | ||||||
Gold Produced | koz | 101.6 | - | 8.3 | 67.2 | 177.0 | 139.4 |
Gold Sales | koz | 104.5 | - | 6.5 | 67.7 | 178.8 | 153.3 |
Average Gold Price | US$/oz | 1,812 | - | 1,761 | 1,901 | 1,843 | 1,515 (1) |
Copper Produced | kt | - | - | - | - | - | - |
Copper Sales | kt | - | - | - | - | - | - |
Average Copper Price | US$/lb | - | - | - | - | - | - |
Material Mined | kt | 21,686 | - | 125 | 24,815 | 46,626 | 41,842 |
Waste Mined | kt | 19,887 | - | 17 | 21,829 | 41,733 | 37,475 |
Ore Mined | kt | 1,799 | - | 108 | 2,986 | 4,893 | 4,366 |
kt | 1,512 | - | 92 | 2,357 | 3,961 | 4,446 | |
g/t | 2.48 | - | 3.12 | 1.06 | 1.65 | 1.22 | |
Gold Recovery | % | 84.3 | - | 89.5 | 83.6 | 84.0 | 79.2 |
Cash Costs | US$/oz | 684 | - | 1,099 | 857 | 764 | 860 |
Site All-In Sustaining Costs(2) | US$/oz | 953 | - | 976 | 1,428 | 1,227 | 1,237 |
(1) | Realised gains and losses on gold hedging are included in the consolidated average gold price. Realised gains and losses on gold hedging are not included in the site average gold prices. |
(2) | Site AISC are exclusive of Corporate general and administrative expenses and have been restated in prior periods accordingly; Consolidated AISC is inclusive of Corporate general and administrative expenses. |
Table 2 – Financial Summary
Quarter ended | Q2 | Q1 | Q2 30 Jun 2020 | YTD | YTD |
Revenue | 182.6 | 148.9 | 95.8 | 331.5 | 234.0 |
Cost of sales, excluding depreciation and amortization | (71.3) | (66.7) | (61.8) | (138.0) | (135.8) |
General and administration – indirect taxes (2) | - | (0.1) | (0.9) | (0.1) | (2.1) |
General and administration – idle capacity charges (1) | (5.5) | (4.5) | (7.9) | (10.0) | (15.1) |
General and administration – other | (12.7) | (12.6) | (12.6) | (25.3) | (24.9) |
Foreign currency exchange gain/(loss) | (1.0) | (3.4) | (4.3) | (4.4) | (5.5) |
Other income/(expense) | (2.2) | 0.4 | 4.1 | (1.8) | 4.2 |
EBITDA (excluding gain/(loss) on undesignated hedges and impairment charge) | 89.9 | 62.0 | 12.4 | 151.9 | 54.8 |
Depreciation and amortization | (40.0) | (36.3) | (39.4) | (76.3) | (89.5) |
Net interest expense and finance costs | (2.6) | (2.7) | (3.1) | (5.3) | (5.9) |
Earnings/(loss) before income tax (excluding gain/(loss) on undesignated hedges and impairment charge) | 47.3 | 23.0 | (30.1) | 70.3 | (40.6) |
Income tax expense on earnings | (15.8) | (5.7) | (1.5) | (21.5) | (1.7) |
Earnings/(loss) after income tax and before gain/(loss) on undesignated hedges and impairment charge | 31.4 | 17.3 | (31.5) | 48.7 | (42.3) |
Write off exploration/property expenditure / investment (3) | - | (1.3) | (6.8) | (1.3) | (6.8) |
Gain/(loss) on fair value of undesignated hedges | - | - | 9.6 | - | (11.6) |
Tax (expense) / benefit on gain/loss on undesignated hedges | - | - | (2.7) | - | 3.3 |
Net Profit/(loss) | 31.4 | 16.0 | (31.4) | 47.4 | (57.4) |
Basic earnings/(loss) per share | |||||
Diluted earnings/(loss) per share |
(1) | The Company did not record any revenue or cost of sales from the Didipio mine during the fifteen months ended |
(2) | Represents production-based taxes in |
(3) | Represents write-off of projects due to formal withdrawal from the Highland, Spring Peak and Bravada joint venture activities. |
Table 3 – Cash Flow Summary
Quarter ended | Q2 | Q1 | Q2 | YTD | YTD |
Cash flows from Operating Activities | 35.8 | 47.6 | 16.7 | 83.4 | 137.3 |
Cash flows used in Investing Activities | (80.9) | (71.9) | (50.9) | (152.8) | (84.7) |
Cash flows from / (used) in Financing Activities | (5.4) | (6.7) | 3.5 | (12.1) | 48.3 |
Operations
In the first half of the year, the Company produced 177,039 ounces of gold, a 27% increase over the same period in 2020 due to record production at Haile in the second quarter, resumption of campaign processing at Waihi, and limited impacts from COVID-19. Second quarter gold production of 93,848 ounces of gold reflects record production at Haile of 57,240 ounces.
Consolidated AISC of
Haile delivered a record second quarter of 57,240 gold ounces resulting in 101,581 gold ounces produced in the first half of the year. AISC and cash costs improved significantly, benefitting from higher gold sales and lower overall cash costs from productivity improvements. AISC and cash costs for the second quarter were
Unit mining and milling cost decreased quarter-on-quarter, and increased 9% and 36%, respectively, YTD over the prior year period. Second quarter decreases reflect lower maintenance activities on the mining fleet and higher mill feed following milling disruptions from the first quarter; YTD increases are attributable to higher maintenance costs and an unplanned mill disruption from blocked crusher chutes in the first quarter that have since been resolved. The decrease in site G&A quarter-on-quarter reflects the increase mill feed and lower costs during the period.
Confirmed COVID-19 cases at site increased from 111 at the end of the first quarter to 120 by the end of the second quarter, a decrease in positive cases from 48 in the first quarter to nine in the second quarter. Looking ahead, the Company expects to transition to ore mining of lower grades at Ledbetter Phase 1 and commence stripping of Ledbetter Phase 2, resulting in materially lower production and higher AISC in the second half of this year. The Company has refined its full year production guidance for Haile to 160,000 to 170,000 gold ounces at site AISC of
Waihi,
Waihi produced 3,939 gold ounces in the second quarter and 8,276 gold ounces YTD. Second quarter activities at Waihi primarily focussed on the development of Martha Underground and replacement of the semi-autogenous grinding ("SAG") mill. Approximately 2,665 metres of underground development were completed during the second quarter and 5,210 metres YTD. Sustained milling recommenced in late June following the successful replacement of Waihi's SAG mill.
AISC and cash costs for the second quarter were
Unit mining costs were relatively unchanged quarter-on-quarter with mining of narrow vein ore at Correnso and early production from Martha Underground in both quarters. YTD mining costs reflect early production from Martha Underground relative to the prior year. Processing cost and site G&A increases in the second quarter reflect the planned shutdown for replacement of the SAG mill and resultant lower mill feed. Lower site G&A YTD over the prior year reflects normal operations relative to 2020 which included impacts from COVID-19-related shutdowns.
Full year 2021 production guidance at Waihi remains unchanged while cost guidance has improved. The Company expects to produce 35,000 to 45,000 ounces at lower gold cash cost of
Macraes,
Macraes produced 32,669 gold ounces in the second quarter and 67,182 gold ounces in the first half of 2021. Lower than expected production in the second quarter reflects geotechnical impacts at the Coronation North open pit that slowed mining rates reducing access to higher grade ore zones, as well as a delayed re-start from the planned shut during the quarter to address out-of-scope maintenance requirements.
Second quarter AISC and cash costs were
Unit mining costs were 6% and 28% higher quarter-on-quarter and YTD over the prior year period, respectively, as a result of reduced trucking productivity from inclement weather which saturated haul roads, flooded active open pit mining areas, and rendered the underground inaccessible for a two-week period in the first quarter. Mining efforts were subsequently re-directed to increased waste mining and pre-stripping at Deepdell North open pit through the first half. Processing unit costs also increased over comparable periods, reflecting the one-off mill motor outage in the first quarter and extended mill shutdown during the second quarter.
Due to the lower-than-expected production in the first half, the Company expects Macraes full year production to be in the lower end of the guidance range of 155,000 to 165,000 gold ounces at cash costs of
Didipio Philippines
There was no production from Didipio in the second quarter and first half due to the suspension of operations. The Company expensed
Subsequent to second quarter end, the Government of
The Company expects to progressively ramp-up to full underground mining rates of 1.6 Mtpa within the next twelve months, depending on workforce rehiring and recruitment efforts. Ore from the underground will incrementally and steadily offset mill feed from stockpiled ore of which there is currently 19 million tonnes.
Since
Financial
In the first half of the year, the Company generated
First half adjusted EBITDA (excluding Didipio carrying costs) of
Adjusted net profit was
Operating cash flows YTD were
First half investing cash flows of
As at
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About
Our global exploration, development, and operating experience has created a significant pipeline of organic growth opportunities and a portfolio of established operating assets including
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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, achievement of guidance, execution of business strategy, future growth, future production, estimated costs, results of operations, business prospects and opportunities of
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