OceanaGold Reports Second Quarter 2017 Results
/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)
MELBOURNE, July 27, 2017 /CNW/ - OceanaGold Corporation (TSX/ASX: OGC) (the "Company") is pleased to release its financial and operational results for the quarter ended 30 June 2017. 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
Key Highlights
- Consolidated production of 272,352 ounces of gold and 10,277 tonnes of copper in the first half of 2017, including 124,396 ounces of gold and 4,322 tonnes of copper in the second quarter.
- Consolidated year-to-date All-In Sustaining Costs of $599 per ounce on sales of 228,214 ounces of gold (excluding Haile) and 9,976 tonnes of copper.
- Consolidated second quarter All-In Sustaining Costs of $681 per ounce on sales of 114,192 ounces of gold (excluding Haile) and 5,828 tonnes of copper.
- First half revenue of $333.5 million with EBITDA of $186.4 million and a net profit of $61.4 million.
- Second quarter revenue of $171.7 million with an EBITDA of $84.7 million and a net profit of $25.4 million.
- Completed the Haile Optimisation Study which demonstrated significant value enhancement through increased production and cash flows over a longer mine life and a 70% increase in total reserves.
- Immediate liquidity of $126.8 million including $81.6 million in cash, excluding $71.6 million of marketable securities held in strategic investments.
- Continued encouraging exploration results.
Mick Wilkes, President and CEO of OceanaGold said, "The first half of the year yielded strong financial and operating results from our diversified portfolio of assets. The Didipio operation continued its strong performance delivering strong cash flows and high-margin ounces to offset weaker production from Haile where production is improving as we rectify the commissioning issues previously flagged."
He added, "Although commissioning of the Haile process plant has taken longer than expected, it is still a top-tier asset as reflected by the results of the optimisation study. Over the next 18 years or more we expect the Haile Gold Mine to deliver significant cash flows and remain excited about the long term exploration potential of the district. We plan to be operating there for a very long time."
| Table 1 – Production and Cost Results Summary |
|||||||
| Didipio |
Waihi |
Macraes |
Haile (2) |
Consolidated |
|||
| Second Quarter 2017 Results |
Q2 2017 |
Q1 2017 |
|||||
| Gold Produced |
ounces |
42,899 |
25,559 |
39,778 |
16,160 |
124,396 |
147,956 |
| Copper Produced |
tonnes |
4,322 |
- |
- |
- |
4,322 |
5,955 |
| Gold Sales |
ounces |
47,185 |
24,743 |
42,264 |
15,558 |
129,750 (3) |
126,225 (3) |
| Copper Sales |
tonnes |
5,828 |
- |
- |
- |
5,828 |
4,148 |
| All-In Sustaining Costs (1) |
$ per ounce |
147 |
913 |
1,140 |
- |
681 |
521 |
| YTD June 30 2017 |
YTD Jun 30 |
YTD Jun 30 |
|||||
| Gold Produced |
ounces |
105,647 |
51,419 |
78,328 |
36,958 |
272,352 |
225,339 |
| Copper Produced |
tonnes |
10,277 |
- |
- |
- |
10,277 |
12,244 |
| Gold Sales |
ounces |
98,652 |
51,500 |
78,062 |
27,761 |
255,975 (3) |
233,293 |
| Copper Sales |
tonnes |
9,976 |
- |
- |
- |
9,976 |
10,858 |
| All-In Sustaining Costs (1) |
$ per ounce |
15 |
876 |
1,154 |
- |
599 |
722 |
| Notes: |
|
| 1. |
In this second quarter 2017 MD&A, all revenue and costs reported do not include the Haile operations as these have been capitalised as commercial production is yet to be declared. |
| 2. |
Haile gold mine commenced selling gold in February 2017. Revenue from the sale of gold is treated as pre-production income. |
| 3. |
Consolidated 2017 gold sales include gold sales from Haile. |
| Table 2 – Consolidated Financial Summary* |
|||||
| $'000 |
Q2 |
Q1 |
Q2 |
YTD |
YTD |
| Revenue |
171,650 |
161,800 |
169,763 |
333,450 |
330,814 |
| Cost of sales, excluding depreciation and |
(73,767) |
(56,834) |
(79,642) |
(130,601) |
(151,531) |
| General & administration – other |
(14,513) |
(8,950) |
(15,565) |
(23,463) |
(27,933) |
| Foreign currency exchange gain/(loss) |
647 |
(221) |
2,543 |
426 |
3,268 |
| Gain on sale of available-for-sale assets |
- |
5,314 |
- |
5,314 |
- |
| Other income/(expense) |
728 |
562 |
187 |
1,290 |
541 |
| Earnings before interest, tax, |
84,745 |
101,671 |
77,286 |
186,416 |
155,159 |
| Depreciation and amortisation |
(51,171) |
(36,403) |
(28,015) |
(87,574) |
(61,784) |
| Net interest expense and finance costs |
(4,292) |
(4,557) |
(2,536) |
(8,848) |
(4,724) |
| Earnings before income tax and |
29,282 |
60,711 |
46,735 |
89,994 |
88,651 |
| Tax (expense) / benefit on earnings |
(4,538) |
(1,318) |
(5,599) |
(5,857) |
(10,806) |
| Earnings/(loss) after income tax and |
24,744 |
59,393 |
41,136 |
84,137 |
77,845 |
| Impairment charge |
- |
(17,654) |
- |
(17,654) |
- |
| Gain/(loss) on fair value of undesignated |
1,075 |
(7,874) |
(1,828) |
(6,799) |
(20,132) |
| Tax (expense)/benefit on gain/loss on |
(301) |
2,205 |
511 |
1,904 |
5,637 |
| Share of profit/(loss) from equity accounted |
(161) |
(65) |
(164) |
(226) |
(164) |
| Net Profit |
25,357 |
36,005 |
39,655 |
61,362 |
63,186 |
| Basic earnings per share |
$0.04 |
$0.06 |
$0.07 |
$0.10 |
$0.10 |
| CASH FLOWS |
|||||
| Cash flows from Operating Activities |
88,391 |
52,343 |
91,486 |
140,734 |
123,159 |
| Cash flows used in Investing Activities |
(71,696) |
(65,910) |
(122,496) |
(137,606) |
(226,236) |
| Cash flows (used in) / from Financing |
(6,635) |
10,545 |
12,827 |
3,910 |
14,860 |
| Note: |
On a consolidated basis, during the first half of 2017 the Company achieved production of 272,352 ounces of gold and 10,277 tonnes of copper, including 124,396 ounces of gold and 4,322 tonnes of copper in the second quarter. The quarter-on-quarter decrease in consolidated gold production was expected and previously forecast and due primarily to lower production from the Didipio operation. In the second quarter. the Didipio head grade decreased following the cessation of open pit mining resulting in a higher proportion of lower grade stockpiled ore processed. Decreased production was also due to lower production from Haile where issues related to the commissioning of the Carbon-in-Leach ("CIL") circuit along with load imbalances in the milling circuit led to lower throughputs and recoveries.
On a consolidated basis, and excluding Haile gold sales, during the first half of 2017, the Company recorded an AISC of $599 per ounce on sales of 228,214 ounces of gold and 9,976 tonnes of copper. During the second quarter, on a consolidated basis and excluding Haile gold sales, the Company recorded an AISC of $681 per ounce on sales of 114,192 ounces of gold and 5,828 tonnes of copper.
During the first half, the Company achieved revenue of $333.5 million including second quarter revenue of $171.7 million.
EBITDA in the first half of 2017 was $186.4 million including second quarter EBITDA of $84.7 million, which was lower quarter-on-quarter due to increased operating and general and administrative ("G&A") costs, partially offset by higher revenue.
For the first half of 2017, the Company achieved a net profit of $61.4 million and a second quarter net profit of $25.4 million. The quarter-on-quarter decrease in net profit was a result of lower EBITDA, higher depreciation and amortisation costs and tax expense, which were partially offset by a gain on the fair value of undesignated hedges.
Operating cash flow for the first half of the year was $140.7 million including $88.4 million in the second quarter. The increase in operating cash flow from the first quarter was primarily due to higher revenues and favorable working capital movements at Didipio following the reduction of gold-copper concentrate inventories and decrease in trade debtors.
At the end of the second quarter of 2017, the Company had immediate available liquidity of $126.8 million which included a cash balance of $81.6 million, excluding $71.6 million in marketable securities from strategic investments. During the quarter, the Company increased its revolving credit facilities to $330 million of which $284.8 million was drawn.
Second Quarter 2017 Results Webcast
The Company will host a conference call / webcast to discuss the results at 7:30 am on Friday 28 July 2017 (Melbourne, Australian Eastern Standard Time) / 5:30 pm on Thursday 27 July 2017 (Toronto, Eastern Daylight Time).
Webcast Participants
To register, please copy and paste the link below into your browser:
http://event.on24.com/r.htm?e=1462822&s=1&k=3BC20600AC3044BA5401F93244445492
Teleconference Participants (required for those who wish to ask questions)
Local (toll free) dial in numbers are:
Australia: 1 800 076 068
New Zealand: 0 800 453 421
Canada & North America: 1 888 390 0605
All other countries (toll): + 1 416 764 8609
Playback of Webcast
If you are unable to attend the call, a recording will be available for viewing on the Company's website.
About OceanaGold
OceanaGold Corporation is a mid-tier, high-margin, multinational gold producer with assets located in the Philippines, New Zealand and the United States. The Company's assets encompass its flagship operation, the Didipio Gold-Copper Mine located on the island of Luzon in the Philippines. On the North Island of New Zealand, the Company operates the high-grade Waihi Gold Mine while on the South Island of New Zealand, the Company operates the largest gold mine in the country at the Macraes Goldfield which is made up of a series of open pit mines and the Frasers underground mine. In the United States, the Company is currently commissioning the Haile Gold Mine, a top-tier asset located in South Carolina. OceanaGold also has a significant pipeline of organic growth and exploration opportunities in the Americas and Asia-Pacific regions.
OceanaGold has operated sustainably over the past 27 years with a proven track-record for environmental management and community and social engagement. The Company has a strong social license to operate and works collaboratively with its valued stakeholders to identify and invest in social programs that are designed to build capacity and not dependency.
In 2017, the Company expects to produce 550,000 to 600,000 ounces of gold and 18,000 to 19,000 tonnes of copper with sector leading All-In Sustaining Costs that range from $600 to $650 per ounce sold.
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, 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 accuracy of mineral reserve and resource estimates and related assumptions, inherent operating risks, sovereign risks, risk of suspension 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
Investor Relations: Sam Pazuki, Tel: +1 416 915 3123; Jeffrey Sansom, Tel: +61 3 9656 5300; [email protected] | www.oceanagold.com | Twitter: @OceanaGold
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