/NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES AND NOT FOR
DISTRIBUTION TO US NEWSWIRE SERVICES/
MELBOURNE, Australia, July 16, 2012 /CNW/ - OceanaGold Corporation (ASX: OGC, TSX: OGC, NZX: OGC) (the "Company") is pleased to provide a progress report on the Didipio
Project as well as the corporate re-financing initiatives previously
discussed by the Company.
Received credit approvals from a group of large, multi-national banks
for a US$220 million credit facility to be used if necessary, for
repayment of convertible bonds maturing in December 2012 & December
2013 and for general working capital purposes.
Didipio Project in Luzon Philippines is fully financed and on track for
commissioning in Q4 2012. Total project capital is now estimated at
US$220 million, from US$185 million announced in June 2011.
Construction is over 70% complete.
Recruitment for Didipio permanent operations team and operations
readiness plans are well advanced.
Corporate Re-Financing Initiative
Subject to final documentation, OceanaGold will enter into agreements
with a group of multi-national mining banks to provide a US$220 million
credit facility. The arrangement has received credit approval from each
of the Banks' credit committees. This three year facility will provide
additional liquidity should it be required for:
Repayment of the A$57.8 million convertible bonds maturing December 2012
Repayment of the A$110 million convertible bonds maturing December 2013
US$50 million working capital facility
Further details of the facility will be provided upon completion of
documentation in the coming weeks.
Mick Wilkes, Managing Director & CEO commented, "I am very pleased with
the strong support we've received from this group of large,
first-class, multi-national banks to restructure and strengthen the
balance sheet. It's a vote of confidence in OceanaGold and allows us to
focus on successfully commissioning Didipio and generating strong cash
flows from our operations in 2013. We remain committed to creating a
mid-tier, low cost, international gold mining company and we look
forward to working with our new financial partners to further grow the
Didipio Project Construction Progress
Construction activities at the Didipio Project have progressed well over
the past two months. The project is currently at peak construction with
more than 1600 workers at site with 98% of these being Filipino
All design for the process plant and infrastructure is complete. Project
procurement is on schedule with the majority of the major process
components already installed or in storage on site. Key outstanding
deliveries are the seven remaining power generators and the high and
low voltage electrical switch rooms. All of the power equipment is
expected at site over the next 4-6 weeks.
Construction of the accommodation village and administration buildings
is complete. Concrete installation is 95% complete and steel erection
at the process plant is 65% complete. Mill shells and mill ends,
flotation tanks and thickeners are installed ready for mechanical and
piping installation. All remaining major contracts including
mechanical, piping and electrical installation have been awarded and
the contractors have commenced work on site.
The Tailings Storage Facility (TSF) is now 50% complete and progressing
well. Importantly the critical activity of bringing the embankment
foundations for the TSF up out of the ground has been completed prior
to the onset of rain. TSF construction can now continue unabated
through wet weather. Mining of waste rock from two starter pits
continues to ramp up and that has been a key contributor to the solid
progress made on the TSF construction which will continue over the next
few months and is designed to have ample capacity for start-up.
Mining of the Didipio orebody has commenced on schedule this month in
readiness for commissioning in the fourth quarter and to build ore
stockpiles for production in 2013.
In advance of commissioning later this year, the Didipio operations team
is being recruited with approximately 60% of the required positions
already filled. Operations readiness plans are well advanced and most
spares and supply items are catalogued and ordered.
Didipio Project Capital Cost Update
As reported earlier this year, the Company has experienced some cost
pressure related to construction activities at the Didipio Project.
Total Didipio Project capital cost is now expected to be US$220
million, which represents a 19% increase on the US$185 million reported
at project commencement in June 2011. The main contributors to the
increased capital cost are associated with increases in engineering
design and procurement services, TSF and infrastructure construction,
and site support costs. Working capital requirements on start-up are
expected to be an additional US$27 million.
As at 30 June, US$161 million of the total Project capital cost had been
spent, with a further US$24 million committed in contracts. Cash on
hand as at 30 June was US$73 million. The Project is currently in peak
construction and on track for commissioning in the fourth quarter 2012
and remains fully financed through to commercial production.
Mick Wilkes, Managing Director & CEO commented, "Didipio Project is
going extremely well. We remain on track to achieve our goal set out
in June last year to commence commissioning in Q4 this year. Excellent
progress has been made over the past few months with construction of
the processing plant and the TSF. Mining is ramping up to full capacity
and ore mining has commenced on schedule. We are also making good
progress with our commissioning and operations readiness plans. The
increased capital cost for the project is consistent with industry cost
pressures today, particularly for engineering design services. We also
made the very deliberate decision to engage with high quality
contractors in the Philippines which cost more money to ensure the
Project was built to a high standard and on time. With the current cash
position, cashflows from New Zealand operations in 2012 and the credit
facility, the Company is well positioned to meet its medium term growth
To view recent construction progress at Didipio, please visit our
website at: http://www.oceanagold.com/investors-and-media/images-and-videos/
Full Company Release
To view the full company release, including images please refer to the
company's website www.oceanagold.com
OceanaGold Corporation is a significant Asia Pacific gold producer with
projects located on the South Island of New Zealand and in the
Philippines. The Company's assets encompass New Zealand's largest gold
mining operation at the Macraes goldfield in Otago which is made up of
the Macraes Open Pit and the Frasers Underground mines. Additionally on
the west coast of the South Island, the Company operates the Reefton
Open Pit mine. OceanaGold produces approximately 230,000 - 250,000
ounces of gold per annum from the New Zealand operations. The Company
also owns the Didipio Project in northern Luzon, Philippines which is
in construction and expected to commission in Q4 2012. Currently,
Didipio is expected to produce 100,000 ounces of gold and 14,000 tonnes
of copper per year over an estimated 16 year mine life.
OceanaGold is listed on the Toronto, Australian and New Zealand stock
exchanges under the symbol OGC.
Statements in this release may be forward-looking statements or
forward-looking information within the meaning of applicable securities
laws. 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 such as production forecasts are
subject to a variety of risks and uncertainties which could cause
actual events or results to differ materially from those reflected in
the forward-looking statements. They include, among others, 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 such forward-looking statements and, subject to applicable
securities laws, the Company undertakes no obligation to update such
statements. Such forward-looking statements 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. Accordingly, readers should not place undue
reliance on forward-looking statements.
SOURCE OceanaGold Corporation
For further information:
Investor Relations - Melbourne
Nova Young or Darren Klinck
Tel: +61(3) 9656 5300
Investor Relations - Toronto
Tel: +1 416 915 3123