Open Briefing(R). OceanaGold. CEO on Didipio Financials, Financing & Timetable


    VANCOUVER, June 25 /CNW/ -

    Date of lodgement: 25-Jun-2008

    Record of interview:

    OceanaGold Corporation ("OceanaGold" - TSX, ASX and NZX codes "OGC")
recently announced it has undertaken a number of initiatives to control
expenditures at its Didipio project in the Philippines until supplemental
financing is completed. A number of high expenditure contracts will be delayed
or temporarily suspended. Do the project financials remain robust? On what
price assumptions?

    CEO Steve Orr

    Didipio still has a robust rate of return and we are committed to
developing the project. Based on a gold price of US$800 per ounce and a copper
price of US$3.50 per pound, Didipio's rate of return is 22%. In addition, the
Company currently has US$95 million in cash to ensure that the primary
value-adding initiatives at the project continue while we complete our
supplemental financing.

    Can you reiterate your capital cost estimates? How confident are you on
that number?

    CEO Steve Orr

    The capital cost for Didipio remains at US$320 million, which was the
revised figure we announced in May 2008. This is a conservative forecast that
incorporates increases for commodity and labour inflation and includes the
project scope changes such as the power generation plant. In addition, we have
now accounted for all taxes and foreign exchange increases since the USD has
declined against almost every other global currency. These changes increased
the capital costs to US$287 million and the project contingency has been
tripled to US$33 million for the total US$320 million.

    What additional funding is required on top of your current cash? What is
your funding strategy? What support or interest are you getting for these
funding options?

    CEO Steve Orr

    We need about US$185 million in additional cash and are considering a
number of options to secure this funding. Alternatives include conventional
and hybrid debt facilities, a placement to current shareholders and JV/merger
    There has been significant interest in these options from various
financial institutions and other gold companies.

    Are there penalties involved in suspending major cost items such as
contractor work?

    CEO Steve Orr

    There are costs associated with suspending contractor work and we are
currently in discussions with the affected parties to minimize those costs
while maintaining activities that add project value.
    During this period of reduced activity, we are evaluating options to
improve project development efficiency, and thereby reduce costs, through
consolidation of activities under fewer contractors. We are also restructuring
our community and Provincial Government engagement program.

    What revisions have you made to the project development timetable? When
do you expect project completion?

    CEO Steve Orr

    There may be a delay to the project commissioning date as a result of
this partial suspension. It really depends upon how long it takes for us to
complete one or more of the financing options and secure funds. It is safe to
assume that each month of partial project suspension will add at least the
same amount of delay to the project commissioning date.

    Given the possible delay to commissioning of the project, what support
for the project are you receiving from the Philippine National Government?

    CEO Steve Orr

    The Philippine National Government has been very supportive of OceanaGold
and the development of Didipio. Didipio is termed as a priority resource
development project by Lito Atienza, Secretary of the Philippine Department of
Environment and Natural Resources.

    You've made a decision to conserve cash until financing is completed. To
what extent will that impact capital development and exploration programs at
your New Zealand operations? What EBITDA are you currently generating from
your New Zealand operations and what do you expect in the future?

    CEO Steve Orr

    Our expenditure management is focused on the Didipio project. No
activities have been curtailed at our operations in New Zealand. We are still
conducting the planned development for ongoing production at the Macraes and
Reefton Goldfields mines. In addition, exploration has been maintained at
Macraes in New Zealand and at the Didipio Valley in the Philippines.
    We generated US$22 million EBITDA in the March quarter 2008 from our New
Zealand operations, but higher fuel and electricity costs in the June quarter
will reduce our margin. Operationally however, we have achieved improvements
this quarter in ounce production from the Frasers Underground and in
recoveries at the process plant.

    Does Didipio remain central to OceanaGold's longer term growth strategy?

    CEO Steve Orr

    Didipio is still an important part of OceanaGold's growth strategy. This
is a long life and world-class deposit with robust cash flows. We believe it
will be the first of a number of deposits that we mine in this prospective
mineral district.

    Thank you Steve.

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For further information:

For further information: about OceanaGold, please visit or contact Darren Klinck, Vice President, Corporate and
Investor Relations, OceanaGold Corporation, telephone + 61 3 9656 5300

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