Comet Resources' flagship Barraba copper project encompasses 2,375 hectares across project license EL8492 near the town of Barraba, 550 kilometers north of Sydney. Comet Resources finalized the acquisition of the Barraba copper project in April 2020. Under the updated terms of the acquisition, Comet Resources is expected to pay AU$150,000 in cash for the project, in addition to AU$200,000 in shares at $0.01 per share. Following the closing of the agreement, the company announced it had successfully closed a private placement of AU$650,000 at $0.01 per share.
The Barraba copper project sits along the Peel Fault line and encompasses the historic Gulf Creek and Murchison copper mines. The project area is known to contain volcanogenic massive sulfide-style mineralization, with historical workings at the Gulf Creek mine producing high-grade copper and zinc briefly during the turn of the 19th century.
In October 2020, Comet Resources gained access to officially begin exploring the Barraba copper project. The agreement finalised a significant portion of freehold land in the EL8492 region of the project, while accessible land includes the historical, high grade Murchison Copper Mine.
The Murchison Copper Mine is a volcanogenic massive sulphide deposit that has produced previously copper at 3 percent average grade from surface with historical assays returning grades of over 5 percent copper.
In addition to its flagship Barraba project, Comet Resources has also committed to a binding Heads of Agreement for the acquisition of the high-grade Santa Teresa gold project in Baja California, Mexico. The Santa Teresa project is located in the El Alamo district, which is home to historical production of between 100,000 and 200,000 ounces of gold. The property comprises two mineral claims totaling 202 hectares, with minimal exploration conducted on the property. Santa Teresa hosts a non-JORC2 inferred mineral resource estimate of 64,000 ounces of gold grading at 8.7 g/t gold which was reported at a 4 g/t cutoff.
Comet Resources is also developing the Springdale graphite project in Western Australia, which is located 30 kilometers east of Hopetoun. According to the Fraser Institute, Western Australia ranks as the second most attractive jurisdiction for mining investment.
In April 2020 Comet Resources completed the acquisition of the Barraba copper project, a new copper exploration property in New South Wales, Australia. The exploration license covers 2,375 hectares near the town of Barraba, approximately 550 kilometers north of Sydney. The property sits along the Peel Fault line and encompasses the historic Gulf Creek and Murchison copper mines. Historical workings at Gulf Creek produced high-grade copper and zinc at the turn of the 19th century, including grades between 2-6 percent copper to a depth of 150 meters.
Under the terms of the finalized acquisition, Comet Resources has a conditional right to acquire an 80 percent interest for consideration of AU$150,000 cash, AU$200,000 in shares and a commitment to complete a minimum drilling and exploration program within 18 months of the date of settlement. The minimum exploration commitment entails AU$600,000 spent with a minimum of 1,250 meters of RC or diamond drilling. Comet also has the option to purchase the remaining 20 percent interest in the first 36 months for $2.5 million. The company was also required to raise a minimum of AU$500,00 to fund future exploration, a condition that was satisfied by the recent AU$650,000 placement.
In October 2020, the company was granted access to begin exploring the Barbarra Copper project, with the initial exploration program having begun in November at the Murchison Copper mine region and a few IP anomalies north of the Gulf Creek Mine.
The Murchison Copper Mine is a volcanogenic sulphide deposit that has a history of producing copper at 3 percent average grade from the surface, while historical assays have returned grades of more than 5 percent copper.
Comet Resources believes that the acquisition of the Barraba property has the potential to serve the global electric vehicle revolution, which is projected to rely on copper for electrical infrastructure. According to the CRU Group, the copper market could see a deficit in the long term, partially due to the growing demand caused by electric vehicles. "Certainly by the mid-2020s, and even slightly before, you're starting to see some sizable deficits in the market," said CRU Principal Analyst Robert Edwards.
The Barraba copper project is seen as a complement to the company's existing graphite project, as both elements can be found in electric vehicles and their related infrastructure. "It is an exciting opportunity for Comet to be able to acquire the Barraba Project as it is in a prospective location and hosts a number of drill-ready targets. We will be working hard to be in a position to test the project's prospectivity as soon as possible after completion," said Matthew O'Kane, managing director of Comet Resources.
In June 2020 Comet Resources announced a binding heads of agreement (HOA) with El Alamo Resources Limited for the proposed acquisition of the Santa Teresa gold project located in Baja California, Mexico. Immediately following the signing of the agreement, Comet Resources announced a concurrent non-binding term sheet with Raptor Capital International Limited for gold streaming and royalty financing in order to fund activities at Santa Teresa for up to US$20 million, with an initial minimum investment of US$6 million.
The Santa Teresa project is located in the El Alamo district, which is home to historical production of between 100,000 and 200,000 ounces of gold. The property comprises two mineral claims totaling 202 hectares.
The Santa Teresa gold project hosts an existing non-JORC2 inferred mineral resource estimate of 64,000 ounces of gold grading 8.7 g/t gold which was reported at a 4 g/t cut-off. Individual assays were capped at 20 g/t. Comet Resources believes the under-explored nature of the property indicates potential moving forward, with 32 modern drill holes returning a number of high-grade intersections, including:
In October 2020, Comet Resources released its initial JORC compliant inferred mineral resource estimate for the Santa Teresa Gold Project, which noted 88.6koz at 7.47g/t gold. This information will be used for the company's drilling program at the project.
Limited historical exploration has also been conducted on the property, including trenching and various prospecting visits conducted by Dakota Mining Corporation, which defined 12 gold-bearing quartz vein lodes over a strike length of 500 meters. Moving forward, Comet Resources intends to focus its work at Santa Teresa on assessing its near-term production potential. The company has also proposed to acquire additional licenses within the El Alamo district, which may be financed by stream financing provided by Raptor.
Comet Resources' wholly-owned Springdale graphite project is situated on freehold land in Western Australia, with access to nearby infrastructure including grid power, piped gas and sealed roads that lead to the port at Esperance only 150 kilometers away. The Springdale project is made up of tenements (E74/562 and E74/612) within the southern margin of the Yilgarn Craton, which constitutes part of the Albany-Fraser Orogen.
Comet Resources first conducted a first pass aircore drilling program on the property in February 2016, which confirmed the presence of graphite in the Western zone. In September 2017 a detailed aeromagnetic survey was conducted in order to delineate 26 kilometers of stratigraphy deemed to be prospective for graphite mineralization. Less than 20 percent of the identified stratigraphy has been drill tested.
Exploration work on the project revealed the Northern zone as a high-priority drill target. Comet Resources completed RC Drilling on the property between December 2017 and February 2018 and successfully identified high-grade graphite mineralization in the Northern zone. Follow-up metallurgical test work conducted in April 2017 proved that the graphene on the property can be produced by electrical exfoliation.
In December 2018 Comet Resources released a maiden inferred resource of 15Mt at 6.0 percent TGC including a high-grade component of 2.6mt at 17.5 percent TGC, which incorporated the Northern, Eastern and Western zones. The company has since discovered two new high-grade zones of graphite mineralization outside the existing resource. High-grade intersections at Springdale returned 3.23 meters at 51.02 percent TGC from 35.27 meters within 42.5 meters at 17.02 percent TGC from 20 meters. Results of a 2019 drilling program have confirmed that electromagnetic surveys could be used to target shallow, high-grade mineralization.
In 2019 the company conducted a diamond drilling program and aerial electromagnetic survey in September and October of 2019, with results pending. The company intends to conduct metallurgical test work using this material, with results expected in the first quarter of 2020. Comet Resources has engaged a specialist metallurgical team with significant graphite-specific experience to conduct the analytical and metallurgical test work for Springdale.
Select drill chips have been taken from the property to assess flake size. Flakes found on the property have reached up to 500 µm in size.
Matthew O'Kane, Managing Director
Matthew O'Kane has over 25 years of finance experience in the mining, commodities and automotive sectors. Matthew has held senior executive roles across a range of private and public companies in Australia, USA and Asia. He also spent nine years in Asia, gaining a wealth of experience and contacts in the region over a wide range of commodities from producing companies to exploration and development plays, as well as commodities trading.
Matthew has experience in internal and external financial reporting, forecasting and analysis, long-range planning, internal control and corporate governance, and productive negotiations. Matthew O'Kane has a Bachelor of Economics and Finance, and an MBA, from the Royal Melbourne Institute of Technology.
Alex Molyneux, Non-executive Director
Mr. Molyneux is an experienced metals and mining industry executive and financier. He is currently CEO of Galena Mining Limited (ASX: G1A), which just over two weeks ago announced a $90 million project equity investment from Toho Zinc of Japan, for a 40% ownership interest it's Abra Base Metals Project. Prior to Galena, Mr Molyneux completed three-years as CEO of Paladin Energy Ltd. (ASX: PDN), one of the world's largest uranium companies, where he completed a US$700M successful recapitalization including raising US$115m in new capital and a re-listing of the company on the ASX. Prior to Paladin Energy, Mr Molyneux spent approximately five-years with Ivanhoe Mines Group and Ivanhoe Energy in various leadership capacities.
Mr. Molyneux is well known for his breadth of experience in the mining industry and serves on a number of public company boards, including: Galena Mining Limited. (ASX: G1A), Argosy Minerals Ltd. (ASX: AGY), Metalla Royalty & Streaming Ltd. (TSX-V: MTA), Tempus Resources Ltd. (ASX: TMR) and Azarga Metals Corp. (TSX-V: AZR). Prior to his mining industry executive and director roles, Mr Molyneux was Managing Director, Head of Metals and Mining Investment Banking, Asia Pacific for Citigroup. As a specialist resources investment banker, he spent approximately 10-years providing investment banking services to natural resources companies. Mr Molyneux holds a Bachelor Degree in Economics from Monash University.
Hamish Halliday, Non-Executive Chairman
Mr. Halliday founded Adamus Resources Limited and grew that Company to a multi-million ounce emerging gold producer. Mr Halliday also co-founded Gryphon Minerals Limited and Venture Minerals Ltd, both highly successful junior explorers.
Mr. Halliday is a Director of Blackstone Minerals Ltd, Alicanto Minerals Ltd and Venture Minerals Ltd. He resigned from Renaissance Minerals Limited on 26 September 2016.
David Prentice, Non-executive Director
Mr. Prentice is a senior resources executive with 25 plus years domestic and international experience. David started his career working in commercial and business development roles within the resources sector working for some of Australia's most successful gold and nickel exploration and mining companies. During the last 12 years, David has gained international oil and gas exploration and production sector experience (with a specific focus on the Mid-Continent region of the United States) working in both executive and non-executive director roles with Australian publicly traded companies. David is the Managing Director of Brookside Energy Limited, Chairman of Lustrum Minerals Limited and a non-executive director of Black Mesa Production, LLC and Comet Resources Limited.
Once the bulk sample of Springdale graphite concentrate is produced it will be forwarded to a specialist lab in Germany where they will assess, among other properties, the performance of the graphite during purification, micronisation and spheronisation. These are the key steps for the processing of natural graphite products for EV battery anode specification markets. Comet’s German lab partners will simulate these to test Springdale’s product suitability to meet industry standards in all of these areas.
Comet Managing Director, Matthew O’Kane, commented, “The results of this ongoing test work will determine the suitability of the natural flake graphite from Springdale for use in the manufacture of battery anodes for electric vehicles. Earlier tests have demonstrated the graphite from Springdale is quite a rare product due to its very small flake size, which could make it ideally suited for anode production. This next stage of specialised testing will hopefully confirm this.”
Further test work on the bulk sample of float concentrate in Germany is designed to assess the ability of the concentrate obtained by flotation to be converted into highly valuable, readily saleable products.
Three different processes are to be tested:
These test work streams are designed to confirm the suitability of Springdale graphite as a precursor material for these high value-added products. We look forward to receiving the results from these work streams and will provide updates as soon as the information is available.
This announcement has been authorised by the Board of Comet Resources Limited
For further information please contact:
MATTHEW O’KANE
Managing Director
(08) 6489 1600
comet@cometres.com.au
cometres.com.au
Suite 9, 330 Churchill Avenue Subiaco WA 6008
PO Box 866 Subiaco WA 6904
About Comet Resources
Santa Teresa Gold Project (Mexico)
The Santa Teresa Gold Project is comprised of two mineral claims totalling 202 hectares located in the gold rich El Alamo district, approximately 100 km southeast of Ensenada, Baja California, Mexico; and 250 km southeast of San Diego, California, USA. The Project is prospective for high grade gold. In addition to the two claims of the Project, two additional claims totalling a further 378 hectares in the surrounding El Alamo district are being acquired from EARL.
Barraba Copper Project (NSW)
The 2,375ha exploration license that covers the project area, EL8492, is located near the town of Barraba, approximately 550km north of Sydney. It sits along the Peel Fault line and encompasses the historic Gulf Creek and Murchison copper mines. The region is known to host volcanogenic massive sulphide (VMS) style mineralisation containing copper, zinc, lead and precious metals. Historical workings at Gulf Creek produced high-grade copper and zinc for a short period around the turn of the 19th century, and this area will form a key part of the initial exploration focus.
Springdale Graphite Project (WA)
The 100% owned Springdale graphite project is located approximately 30 kilometres east of Hopetoun in south Western Australia. The project is situated on free hold land with good access to infrastructure, being within 150 kilometres of the port at Esperance via sealed roads. The tenements lie within the deformed southern margin of the Yilgarn Craton and constitute part of the Albany-Fraser Orogen. Comet owns 100% of the three tenement’s (E74/562 and E74/612) that make up the Springdale project, with a total land holding of approximately 198 square kilometres.
Forward-Looking Statement
This announcement includes forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning Comet Resources Limited’s planned exploration programs, corporate activities and any, and all, statements that are not historical facts. When used in this document, words such as “could,” “plan,” “estimate,” “expect,” “intend,” “may”, “potential,” “should” and similar expressions are forward-looking statements. Comet Resources Limited believes that its forward-looking statements are reasonable; however, forward looking statements involve risks and uncertainties and no assurance can be given that actual future results will be consistent with these forward-looking statements. All figures presented in this document are unaudited and this document does not contain any forecasts of profitability or loss.
No New Information
To the extent that this announcement contains references to prior exploration results and Mineral Resource estimates, which have been cross referenced to previous market announcements made by the Company, unless explicitly stated, no new information is contained. The Company confirms that it is not aware of any new information or data that materially affects the information included in the relevant market announcements and, in the case of estimates of Mineral Resources that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed.
/NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES AND NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES./
(All financial figures in US Dollars unless otherwise stated)
OceanaGold Corporation (TSX: OGC) (ASX: OGC) (the “Company”) reported its financial and operational results for the quarter ended June 30, 2021 . Details of the consolidated financial statements and the Management Discussion and Analysis (“MD&A”) are available on the Company’s website at www.oceanagold.com .
Highlights
Michael Holmes , President and CEO of OceanaGold said, “I am very pleased with the operational and financial performance of the business in the second quarter 2021. Haile delivered a record quarter of gold production and is well on-track to deliver on the full year production guidance. Waihi plant upgrades were completed, and we commenced continuous milling late in the second quarter which is a tremendous outcome as we continue to ramp-up underground operations.”
“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 $1,200 to $1,250 per gold ounce sold at cash costs of $825 to $875 per ounce sold. Strong first half performance at Haile has put us firmly on track to deliver ahead of 160,000 gold ounces for the full year at moderately higher AISC, largely driven by an increased proportion of mining costs capitalised as pre-strip plus higher than expected mining costs incurred. On the other hand, a softer first half at Macraes is driving production to the lower end of guidance of 155,000 to 165,000 gold ounces for the full year at consequently higher AISC. Waihi is firmly on-track and production guidance remains unchanged but at improved costs. We expect to provide updated consolidated guidance in-line with the staged restart of Didipio over the coming weeks.”
“Renewal of the FTAA at Didipio was one of our key priorities this year, and I’m extremely proud to say we delivered. The staged restart of the asset is underway with the current focus on the rehire and training of our skilled Philippine workforce. We expect to restart processing well prior to year-end, initially sourcing mill feed from existing stockpiles at site. Our expectation is to also transport and sell approximately 18,500 gold ounces and 3,500 tonnes of copper in concentrate on site by early fourth quarter. The rehire and retraining of the workforce, as well as the ongoing risks associated with the COVID-19 pandemic, could impact the timeline associated with returning to full underground production of 1.6Mtpa, which could take up to 12 months.”
Table 1 – Production and Cost Results Summary
|
Quarter ended 30 Jun 2021 |
Haile |
Didipio |
Waihi |
Macraes |
Consolidated |
||
|
Q2 2021 |
Q2 2020 |
||||||
|
Gold Produced |
koz |
57.2 |
– |
3.9 |
32.7 |
93.8 |
58.7 |
|
Gold Sales |
koz |
59.3 |
– |
3.4 |
33.2 |
95.9 |
61.9 |
|
Average Gold Price |
US$/oz |
1,825 |
– |
1,799 |
2,024 |
1,893 |
1,523 (1) |
|
Copper Produced |
kt |
– |
– |
– |
– |
– |
– |
|
Copper Sales |
kt |
– |
– |
– |
– |
– |
– |
|
Average Copper Price |
US$/lb |
– |
– |
– |
– |
– |
– |
|
Material Mined |
kt |
11,047 |
– |
75 |
12,882 |
24,004 |
20,654 |
|
Waste Mined |
kt |
10,266 |
– |
12 |
11,625 |
21,904 |
18,635 |
|
Ore Mined |
kt |
781 |
– |
62 |
1,257 |
2,101 |
2,019 |
|
Mill Feed |
kt |
836 |
– |
43 |
1,124 |
2,003 |
2,181 |
|
Mill Feed Grade |
g/t |
2.49 |
– |
3.13 |
1.09 |
1.72 |
1.07 |
|
Gold Recovery |
% |
85.5 |
– |
90.7 |
82.7 |
84.1 |
78.3 |
|
Cash Costs |
US$/oz |
615 |
– |
1,215 |
897 |
734 |
946 |
|
Site All-In Sustaining Costs (2) |
US$/oz |
922 |
– |
1,223 |
1,524 |
1,226 |
1,265 |
|
Year to date 30 Jun 2021 |
Haile |
Didipio |
Waihi |
Macraes |
Consolidated |
||
|
YTD 2021 |
YTD 2020 |
||||||
|
Gold Produced |
koz |
101.6 |
– |
8.3 |
67.2 |
177.0 |
139.4 |
|
Gold Sales |
koz |
104.5 |
– |
6.5 |
67.7 |
178.8 |
153.3 |
|
Average Gold Price |
US$/oz |
1,812 |
– |
1,761 |
1,901 |
1,843 |
1,515 (1) |
|
Copper Produced |
kt |
– |
– |
– |
– |
– |
– |
|
Copper Sales |
kt |
– |
– |
– |
– |
– |
– |
|
Average Copper Price |
US$/lb |
– |
– |
– |
– |
– |
– |
|
Material Mined |
kt |
21,686 |
– |
125 |
24,815 |
46,626 |
41,842 |
|
Waste Mined |
kt |
19,887 |
– |
17 |
21,829 |
41,733 |
37,475 |
|
Ore Mined |
kt |
1,799 |
– |
108 |
2,986 |
4,893 |
4,366 |
|
Mill Feed |
kt |
1,512 |
– |
92 |
2,357 |
3,961 |
4,446 |
|
Mill Feed Grade |
g/t |
2.48 |
– |
3.12 |
1.06 |
1.65 |
1.22 |
|
Gold Recovery |
% |
84.3 |
– |
89.5 |
83.6 |
84.0 |
79.2 |
|
Cash Costs |
US$/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 30 Jun 2021 |
Q2 30 Jun 2021 |
Q1 31 Mar 2021 |
Q2 30 Jun 2020 |
YTD 30 Jun 2021 |
YTD 30 Jun 2020 |
|
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 |
$0.04 |
$0.02 |
$(0.05) |
$0.07 |
$(0.09) |
|
Diluted earnings/(loss) per share |
$0.04 |
$0.02 |
$(0.05) |
$0.07 |
$(0.09) |
|
(1) |
The Company did not record any revenue or cost of sales from the Didipio mine during the fifteen months ended 30 June 2021. In addition, General and Administration – idle capacity charges reflect the non-production costs related to maintaining Didipio while not operational. |
|
(2) |
Represents production-based taxes in the Philippines specifically excise tax, local business and property taxes. |
|
(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 30 Jun 2021 |
Q2 30 Jun 2021 |
Q1 31 Mar 2021 |
Q2 30 Jun 2020 |
YTD 30 Jun 2021 |
YTD 30 Jun 2020 |
|
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 $1,227 per ounce sold YTD and $1,226 per ounce sold in the second quarter were relatively flat over the prior year and previous quarter. Cash costs for the first half of the year of $734 per gold ounce and $764 per ounce in the second quarter, decreased 22% and 11%, respectively. The improvement in cash costs primarily reflects lower operating costs at Haile from productivity improvements made year-over-year.
Haile, USA
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 $922 and $615 per ounce, a decrease of 7% and 22%, respectively, quarter-on-quarter. YTD AISC and cash costs were $953 per ounce and $684 per ounce, respectively, down approximately 36% over the prior year period.
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 $1,100 to $1,150 per ounce sold, including cash costs of $850 to $900 per ounce sold. The higher AISC and cash costs reflect higher mining costs incurred plus incremental sustaining capital expenditures related to open pit pre-stripping.
Waihi, New Zealand
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 $1,223 and $1,215 per ounce sold, respectively, and increased quarter-on-quarter with higher operating costs associated with limited early production, partly offset by moderately higher gold sales. YTD AISC and cash costs were $1,099 per ounce and $976 per ounce, respectively, increases over the prior year period with the ramp-up of production at Martha Underground as expected.
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 $900 to $950 per ounce and site AISC of $1,300 to $1,350 per ounce sold. The Company anticipates ramp-up of production over the course of the second half with the highest quarter of production for the year expected in the fourth quarter.
Macraes, New Zealand
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 $1,524 and $897 per ounces sold, respectively. YTD AISC and cash costs were $1,428 and $857 per ounce sold, respectively. Cash costs increased approximately 10% quarter-on-quarter and YTD over the prior year period, reflecting the lower ounces, a net drawdown in inventory and additional contractor costs to fill workforce vacancies. Similar increases in AISC also reflect the higher sustaining capital spend related to increased pre-stripping at Deepdell North and waste movements in the quarter and first half.
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 $800 to $850 per ounce and increased site AISC to $1,200 to $1,250 per ounce sold over the full year, primarily driven by increased sustaining capital spend related to pre-stripping at Deepdell North and additional underground development. Production is still expected to increase in the third quarter and be higher overall in the fourth quarter of 2021.
Didipio Philippines
There was no production from Didipio in the second quarter and first half due to the suspension of operations. The Company expensed $5.5 million in the second quarter and $10.0 million YTD of holding costs as part of consolidated Corporate General and Administration, which relates to maintaining Didipio in a state of operational standby.
Subsequent to second quarter end, the Government of the Philippines renewed the Didipio FTAA for a further 25 years. The Company’s primary focus is the safe and responsible start-up of operations, which includes recruitment and training of the workforce and the transport of approximately 15,000 tonnes of copper-gold concentrate produced prior to the shutdown of operations.
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 March 2020 , 72 positive COVID-19 cases have been managed at Didipio, 63 of which occurred in the second quarter of 2021. The Company experienced a significant increase in COVID-19-positive cases early in the second quarter, consistent with the spread of COVID-19 in the local and surrounding communities. The site continues to follow strict health and safety protocols to prevent the ongoing transmission of the virus at site.
Financial
In the first half of the year, the Company generated $331.5 million in revenue, a 42% increase from the prior year period due to record production at Haile, improved average gold price and early production at Waihi with the development of Martha Underground. Quarter-on-quarter revenue increased 23% with record production from Haile, partly offset by lower sales from Macraes where production was impacted by geotechnical issues that rendered higher grade ore zones of the open pit inaccessible.
First half adjusted EBITDA (excluding Didipio carrying costs) of $161.9 million nearly tripled year-on-year, reflecting improved revenues on higher gold prices and record production at Haile at improved cash costs, as compared to the first half of 2020 which included impacts related to COVID-19 shutdowns. Quarter-on-quarter adjusted EBITDA of $95.4 million increased 43%, benefitting from record production at Haile at improved operating costs, partly offset by lower sales from Macraes.
Adjusted net profit was $36.9 million or $0.05 per share on a fully diluted basis in the second quarter and $58.7 million or $0.08 per share on a fully diluted basis YTD. The quarter-on-quarter and year-over-year increases were mainly a function of the higher revenue from increased sales volumes. The increases were partly offset by income tax expense of $15.8 million in the second quarter and $21.5 million YTD due to the operational profits in the USA and New Zealand . Additionally, there were no potential tax benefits recognised associated with the costs incurred to maintain Didipio in a state of operational readiness.
Operating cash flows YTD were $83.4 million , a decrease year-over-year given the $79.0 million received from the gold presale in the first quarter of 2020. Excluding working capital adjustments, fully-diluted cash flow per share was $0.22 YTD and $0.13 for the second quarter.
First half investing cash flows of $152.8 million were significantly higher than the prior year period, primarily due to higher growth capital expenditures at Haile related to the expansion of waste storage facilities, increased pre-stripping at Macraes and the ongoing development of Martha Underground at Waihi.
As at June 30, 2021 , the Company’s cash balance stood at $92.3 million , and net debt increased quarter-on-quarter to $224.8 million , mainly reflecting the lower cash balance. The Company’s total debt facilities stood at $250 million of which $50 million remains undrawn as at 30 June 2021 .
Conference Call
The Company will also host a conference call / webcast to discuss the results at 7:30 am on Friday July 30, 2021 ( Melbourne , Australian Eastern Standard Time) / 5:30 pm on Thursday July 29, 2021 ( Toronto , Eastern Daylight Time).
Webcast Participants
To register, please copy and paste the link below into your browser:
https://produceredition.webcasts.com/starthere.jsp?ei=1479464&tp_key=b7a29eb104
Teleconference Participants
Local (toll free) dial in numbers are:
Canada & North America : 1 888 390 0546
Australia : 1 800 076 068
New Zealand : 0 800 453 421
United Kingdom : 0 800 652 2435
Switzerland : 0 800 312 635
All other countries (toll): + 1 416 764 8688
Playback of Webcast
If you are unable to attend the call, a recording will be available for viewing on the Company’s website.
Authorised for release to market by OceanaGold Corporate Company Secretary, Liang Tang .
www.oceanagold.com | Twitter: @OceanaGold
About OceanaGold
OceanaGold is a multinational gold producer committed to the highest standards of technical, environmental and social performance. For 30 years, we have been contributing to excellence in our industry by delivering sustainable environmental and social outcomes for our communities, and strong returns for our shareholders.
Our global exploration, development, and operating experience has created a significant pipeline of organic growth opportunities and a portfolio of established operating assets including Didipio Mine in the Philippines ; Macraes and Waihi operations in New Zealand ; and Haile Gold Mine in the United States of America .
Cautionary Statement for Public Release
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 OceanaGold Corporation and its related subsidiaries. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects” or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “estimates” or “intends”, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those expressed in the forward-looking statements and information. They include, among others, the outbreak of an infectious disease, the accuracy of mineral reserve and resource estimates and related assumptions, inherent operating risks and those risk factors identified in the Company’s most recent Annual Information Form prepared and filed with securities regulators which is available on SEDAR at www.sedar.com under the Company’s name. There are no assurances the Company can fulfil forward-looking statements and information. Such forward-looking statements and information are only predictions based on current information available to management as of the date that such predictions are made; actual events or results may differ materially as a result of risks facing the Company, some of which are beyond the Company’s control. Although the Company believes that any forward-looking statements and information contained in this press release is based on reasonable assumptions, readers cannot be assured that actual outcomes or results will be consistent with such statements. Accordingly, readers should not place undue reliance on forward-looking statements and information. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements and information, whether as a result of new information, events or otherwise, except as required by applicable securities laws. The information contained in this release is not investment or financial product advice.
SOURCE OceanaGold Corporation
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(All financial figures in US Dollars unless otherwise stated)
OceanaGold Corporation (TSX: OGC) (ASX: OGC) (the “Company”) reported its financial and operational results for the quarter ended June 30, 2021 . Details of the consolidated financial statements and the Management Discussion and Analysis (“MD&A”) are available on the Company’s website at www.oceanagold.com .
Highlights
Michael Holmes , President and CEO of OceanaGold said, “I am very pleased with the operational and financial performance of the business in the second quarter 2021. Haile delivered a record quarter of gold production and is well on-track to deliver on the full year production guidance. Waihi plant upgrades were completed, and we commenced continuous milling late in the second quarter which is a tremendous outcome as we continue to ramp-up underground operations.”
“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 $1,200 to $1,250 per gold ounce sold at cash costs of $825 to $875 per ounce sold. Strong first half performance at Haile has put us firmly on track to deliver ahead of 160,000 gold ounces for the full year at moderately higher AISC, largely driven by an increased proportion of mining costs capitalised as pre-strip plus higher than expected mining costs incurred. On the other hand, a softer first half at Macraes is driving production to the lower end of guidance of 155,000 to 165,000 gold ounces for the full year at consequently higher AISC. Waihi is firmly on-track and production guidance remains unchanged but at improved costs. We expect to provide updated consolidated guidance in-line with the staged restart of Didipio over the coming weeks.”
“Renewal of the FTAA at Didipio was one of our key priorities this year, and I’m extremely proud to say we delivered. The staged restart of the asset is underway with the current focus on the rehire and training of our skilled Philippine workforce. We expect to restart processing well prior to year-end, initially sourcing mill feed from existing stockpiles at site. Our expectation is to also transport and sell approximately 18,500 gold ounces and 3,500 tonnes of copper in concentrate on site by early fourth quarter. The rehire and retraining of the workforce, as well as the ongoing risks associated with the COVID-19 pandemic, could impact the timeline associated with returning to full underground production of 1.6Mtpa, which could take up to 12 months.”
Table 1 – Production and Cost Results Summary
|
Quarter ended 30 Jun 2021 |
Haile |
Didipio |
Waihi |
Macraes |
Consolidated |
||
|
Q2 2021 |
Q2 2020 |
||||||
|
Gold Produced |
koz |
57.2 |
– |
3.9 |
32.7 |
93.8 |
58.7 |
|
Gold Sales |
koz |
59.3 |
– |
3.4 |
33.2 |
95.9 |
61.9 |
|
Average Gold Price |
US$/oz |
1,825 |
– |
1,799 |
2,024 |
1,893 |
1,523 (1) |
|
Copper Produced |
kt |
– |
– |
– |
– |
– |
– |
|
Copper Sales |
kt |
– |
– |
– |
– |
– |
– |
|
Average Copper Price |
US$/lb |
– |
– |
– |
– |
– |
– |
|
Material Mined |
kt |
11,047 |
– |
75 |
12,882 |
24,004 |
20,654 |
|
Waste Mined |
kt |
10,266 |
– |
12 |
11,625 |
21,904 |
18,635 |
|
Ore Mined |
kt |
781 |
– |
62 |
1,257 |
2,101 |
2,019 |
|
Mill Feed |
kt |
836 |
– |
43 |
1,124 |
2,003 |
2,181 |
|
Mill Feed Grade |
g/t |
2.49 |
– |
3.13 |
1.09 |
1.72 |
1.07 |
|
Gold Recovery |
% |
85.5 |
– |
90.7 |
82.7 |
84.1 |
78.3 |
|
Cash Costs |
US$/oz |
615 |
– |
1,215 |
897 |
734 |
946 |
|
Site All-In Sustaining Costs (2) |
US$/oz |
922 |
– |
1,223 |
1,524 |
1,226 |
1,265 |
|
Year to date 30 Jun 2021 |
Haile |
Didipio |
Waihi |
Macraes |
Consolidated |
||
|
YTD 2021 |
YTD 2020 |
||||||
|
Gold Produced |
koz |
101.6 |
– |
8.3 |
67.2 |
177.0 |
139.4 |
|
Gold Sales |
koz |
104.5 |
– |
6.5 |
67.7 |
178.8 |
153.3 |
|
Average Gold Price |
US$/oz |
1,812 |
– |
1,761 |
1,901 |
1,843 |
1,515 (1) |
|
Copper Produced |
kt |
– |
– |
– |
– |
– |
– |
|
Copper Sales |
kt |
– |
– |
– |
– |
– |
– |
|
Average Copper Price |
US$/lb |
– |
– |
– |
– |
– |
– |
|
Material Mined |
kt |
21,686 |
– |
125 |
24,815 |
46,626 |
41,842 |
|
Waste Mined |
kt |
19,887 |
– |
17 |
21,829 |
41,733 |
37,475 |
|
Ore Mined |
kt |
1,799 |
– |
108 |
2,986 |
4,893 |
4,366 |
|
Mill Feed |
kt |
1,512 |
– |
92 |
2,357 |
3,961 |
4,446 |
|
Mill Feed Grade |
g/t |
2.48 |
– |
3.12 |
1.06 |
1.65 |
1.22 |
|
Gold Recovery |
% |
84.3 |
– |
89.5 |
83.6 |
84.0 |
79.2 |
|
Cash Costs |
US$/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 30 Jun 2021 |
Q2 30 Jun 2021 |
Q1 31 Mar 2021 |
Q2 30 Jun 2020 |
YTD 30 Jun 2021 |
YTD 30 Jun 2020 |
|
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 |
$0.04 |
$0.02 |
$(0.05) |
$0.07 |
$(0.09) |
|
Diluted earnings/(loss) per share |
$0.04 |
$0.02 |
$(0.05) |
$0.07 |
$(0.09) |
|
(1) |
The Company did not record any revenue or cost of sales from the Didipio mine during the fifteen months ended 30 June 2021. In addition, General and Administration – idle capacity charges reflect the non-production costs related to maintaining Didipio while not operational. |
|
(2) |
Represents production-based taxes in the Philippines specifically excise tax, local business and property taxes. |
|
(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 30 Jun 2021 |
Q2 30 Jun 2021 |
Q1 31 Mar 2021 |
Q2 30 Jun 2020 |
YTD 30 Jun 2021 |
YTD 30 Jun 2020 |
|
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 $1,227 per ounce sold YTD and $1,226 per ounce sold in the second quarter were relatively flat over the prior year and previous quarter. Cash costs for the first half of the year of $734 per gold ounce and $764 per ounce in the second quarter, decreased 22% and 11%, respectively. The improvement in cash costs primarily reflects lower operating costs at Haile from productivity improvements made year-over-year.
Haile, USA
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 $922 and $615 per ounce, a decrease of 7% and 22%, respectively, quarter-on-quarter. YTD AISC and cash costs were $953 per ounce and $684 per ounce, respectively, down approximately 36% over the prior year period.
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 $1,100 to $1,150 per ounce sold, including cash costs of $850 to $900 per ounce sold. The higher AISC and cash costs reflect higher mining costs incurred plus incremental sustaining capital expenditures related to open pit pre-stripping.
Waihi, New Zealand
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 $1,223 and $1,215 per ounce sold, respectively, and increased quarter-on-quarter with higher operating costs associated with limited early production, partly offset by moderately higher gold sales. YTD AISC and cash costs were $1,099 per ounce and $976 per ounce, respectively, increases over the prior year period with the ramp-up of production at Martha Underground as expected.
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 $900 to $950 per ounce and site AISC of $1,300 to $1,350 per ounce sold. The Company anticipates ramp-up of production over the course of the second half with the highest quarter of production for the year expected in the fourth quarter.
Macraes, New Zealand
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 $1,524 and $897 per ounces sold, respectively. YTD AISC and cash costs were $1,428 and $857 per ounce sold, respectively. Cash costs increased approximately 10% quarter-on-quarter and YTD over the prior year period, reflecting the lower ounces, a net drawdown in inventory and additional contractor costs to fill workforce vacancies. Similar increases in AISC also reflect the higher sustaining capital spend related to increased pre-stripping at Deepdell North and waste movements in the quarter and first half.
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 $800 to $850 per ounce and increased site AISC to $1,200 to $1,250 per ounce sold over the full year, primarily driven by increased sustaining capital spend related to pre-stripping at Deepdell North and additional underground development. Production is still expected to increase in the third quarter and be higher overall in the fourth quarter of 2021.
Didipio Philippines
There was no production from Didipio in the second quarter and first half due to the suspension of operations. The Company expensed $5.5 million in the second quarter and $10.0 million YTD of holding costs as part of consolidated Corporate General and Administration, which relates to maintaining Didipio in a state of operational standby.
Subsequent to second quarter end, the Government of the Philippines renewed the Didipio FTAA for a further 25 years. The Company’s primary focus is the safe and responsible start-up of operations, which includes recruitment and training of the workforce and the transport of approximately 15,000 tonnes of copper-gold concentrate produced prior to the shutdown of operations.
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 March 2020 , 72 positive COVID-19 cases have been managed at Didipio, 63 of which occurred in the second quarter of 2021. The Company experienced a significant increase in COVID-19-positive cases early in the second quarter, consistent with the spread of COVID-19 in the local and surrounding communities. The site continues to follow strict health and safety protocols to prevent the ongoing transmission of the virus at site.
Financial
In the first half of the year, the Company generated $331.5 million in revenue, a 42% increase from the prior year period due to record production at Haile, improved average gold price and early production at Waihi with the development of Martha Underground. Quarter-on-quarter revenue increased 23% with record production from Haile, partly offset by lower sales from Macraes where production was impacted by geotechnical issues that rendered higher grade ore zones of the open pit inaccessible.
First half adjusted EBITDA (excluding Didipio carrying costs) of $161.9 million nearly tripled year-on-year, reflecting improved revenues on higher gold prices and record production at Haile at improved cash costs, as compared to the first half of 2020 which included impacts related to COVID-19 shutdowns. Quarter-on-quarter adjusted EBITDA of $95.4 million increased 43%, benefitting from record production at Haile at improved operating costs, partly offset by lower sales from Macraes.
Adjusted net profit was $36.9 million or $0.05 per share on a fully diluted basis in the second quarter and $58.7 million or $0.08 per share on a fully diluted basis YTD. The quarter-on-quarter and year-over-year increases were mainly a function of the higher revenue from increased sales volumes. The increases were partly offset by income tax expense of $15.8 million in the second quarter and $21.5 million YTD due to the operational profits in the USA and New Zealand . Additionally, there were no potential tax benefits recognised associated with the costs incurred to maintain Didipio in a state of operational readiness.
Operating cash flows YTD were $83.4 million , a decrease year-over-year given the $79.0 million received from the gold presale in the first quarter of 2020. Excluding working capital adjustments, fully-diluted cash flow per share was $0.22 YTD and $0.13 for the second quarter.
First half investing cash flows of $152.8 million were significantly higher than the prior year period, primarily due to higher growth capital expenditures at Haile related to the expansion of waste storage facilities, increased pre-stripping at Macraes and the ongoing development of Martha Underground at Waihi.
As at June 30, 2021 , the Company’s cash balance stood at $92.3 million , and net debt increased quarter-on-quarter to $224.8 million , mainly reflecting the lower cash balance. The Company’s total debt facilities stood at $250 million of which $50 million remains undrawn as at 30 June 2021 .
Conference Call
The Company will also host a conference call / webcast to discuss the results at 7:30 am on Friday July 30, 2021 ( Melbourne , Australian Eastern Standard Time) / 5:30 pm on Thursday July 29, 2021 ( Toronto , Eastern Daylight Time).
Webcast Participants
To register, please copy and paste the link below into your browser:
https://produceredition.webcasts.com/starthere.jsp?ei=1479464&tp_key=b7a29eb104
Teleconference Participants
Local (toll free) dial in numbers are:
Canada & North America : 1 888 390 0546
Australia : 1 800 076 068
New Zealand : 0 800 453 421
United Kingdom : 0 800 652 2435
Switzerland : 0 800 312 635
All other countries (toll): + 1 416 764 8688
Playback of Webcast
If you are unable to attend the call, a recording will be available for viewing on the Company’s website.
Authorised for release to market by OceanaGold Corporate Company Secretary, Liang Tang .
www.oceanagold.com | Twitter: @OceanaGold
About OceanaGold
OceanaGold is a multinational gold producer committed to the highest standards of technical, environmental and social performance. For 30 years, we have been contributing to excellence in our industry by delivering sustainable environmental and social outcomes for our communities, and strong returns for our shareholders.
Our global exploration, development, and operating experience has created a significant pipeline of organic growth opportunities and a portfolio of established operating assets including Didipio Mine in the Philippines ; Macraes and Waihi operations in New Zealand ; and Haile Gold Mine in the United States of America .
Cautionary Statement for Public Release
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 OceanaGold Corporation and its related subsidiaries. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects” or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “estimates” or “intends”, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those expressed in the forward-looking statements and information. They include, among others, the outbreak of an infectious disease, the accuracy of mineral reserve and resource estimates and related assumptions, inherent operating risks and those risk factors identified in the Company’s most recent Annual Information Form prepared and filed with securities regulators which is available on SEDAR at www.sedar.com under the Company’s name. There are no assurances the Company can fulfil forward-looking statements and information. Such forward-looking statements and information are only predictions based on current information available to management as of the date that such predictions are made; actual events or results may differ materially as a result of risks facing the Company, some of which are beyond the Company’s control. Although the Company believes that any forward-looking statements and information contained in this press release is based on reasonable assumptions, readers cannot be assured that actual outcomes or results will be consistent with such statements. Accordingly, readers should not place undue reliance on forward-looking statements and information. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements and information, whether as a result of new information, events or otherwise, except as required by applicable securities laws. The information contained in this release is not investment or financial product advice.
SOURCE OceanaGold Corporation
View original content to download multimedia: http://www.newswire.ca/en/releases/archive/July2021/29/c5302.html
News Provided by Canada Newswire via QuoteMedia
Rio Tinto Chief Executive Jakob Stausholm said “Government stimulus in response to ongoing COVID-19 pressures has driven strong demand for our products at a time of constrained supply resulting in a significant spike in most prices. We focused on safely running our world-class assets and supplying products to our customers. This enabled us, despite operational challenges, to deliver record financial results with free cash flow of $10.2 billion and underlying earnings of $12.2 billion, after taxes and government royalties of $7.3 billion. We are further strengthening the portfolio with our commitment to fund the high-quality Jadar lithium project, which signals our large-scale entry into the fast-growing battery materials market. We will pay an interim dividend of 561 US cents per share, representing 75% of underlying earnings.
“We are making progress on our four priorities, identifying opportunities for operational improvement, advancing our ESG agenda, taking important investment decisions and stepping up our external engagement. We are making real and lasting changes to the way we engage, interact and operate and are committed to ensuring that we have strong and positive relationships wherever we do business. We have identified what we need to do to make Rio Tinto a better company for the long term, with the right teams in place to unleash our full potential.”
|
Six months ended 30 June |
2021 |
2020 |
Change |
||
|
Net cash generated from operating activities (US$ millions) |
13,661 |
5,628 |
143% |
||
|
Capital expenditure 1 (US$ millions) |
3,336 |
2,693 |
24% |
||
|
Free cash flow 2 (US$ millions) |
10,181 |
2,809 |
262% |
||
|
Consolidated sales revenue (US$ millions) |
33,083 |
19,362 |
71% |
||
|
Underlying EBITDA 2 (US$ millions) |
21,037 |
9,640 |
118% |
||
|
Underlying earnings 2 (US$ millions) |
12,166 |
4,750 |
156% |
||
|
Net earnings (US$ millions) |
12,313 |
3,316 |
271% |
||
|
Underlying earnings 2 per share (US cents) |
751.9 |
293.7 |
156% |
||
|
Ordinary dividend per share (US cents) |
376.0 |
155.0 |
143% |
||
|
Special dividend per share (US cents) |
185.0 |
0.0 |
n/a |
||
|
Total dividend per share (US cents) |
561.0 |
155.0 |
262% |
||
|
Underlying return on capital employed (ROCE) 2 |
50% |
21% |
|
||
|
|
At 30 June |
At 31 December |
|
||
|
Net cash/(debt) 2 (US$ millions) |
3,140 |
(664) |
|
||
|
Our financial results are prepared in accordance with International Financial Reporting Standards (IFRS) and are unaudited. |
|||||
The H1 2021 interim results release is available here
This announcement is authorised for release to the market by Steve Allen, Rio Tinto’s Group Company Secretary.
riotinto.com
View source version on businesswire.com: https://www.businesswire.com/news/home/20210727006252/en/
Please direct all enquiries to
media.enquiries@riotinto.com
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Rio Tinto plc
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Rio Tinto Limited
Level 7, 360 Collins Street
Melbourne 3000
Australia
T +61 3 9283 3333
Registered in Australia
ABN 96 004 458 404
Category: General
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