OceanaGold sees increased gold production in 2017 on Haile mine development

Tuesday 13th December 2016

OceanaGold Corp, which is set to quit its NZX listing at the end of the year, expects increased gold production at a cheaper cash cost in 2017 as its Haile gold mine in the US comes on stream, providing higher margins.

The Melbourne-based company, which has gold mining operations in Otago and Waihi, forecasts gold production of between 550,000 ounces and 610,000 ounces in 2017, up from the projected 385,000-to-425,000 ounces in the current year, it said in a statement. That increase is driven by a forecast 150,000-to-170,000 ounces of gold produced from Haile, though its Waihi and Macraes operations are also tipped to deliver an increased yield.

At the same time, all-in-sustaining cash costs (AISC) are projected to be US$600-to-US$650 per ounce, a reduction on the US$700-to-US$750/ounce forecast for 2016.

"The increase in production year-on-year is a result of incremental production from the Haile gold mine which is nearing completion of construction and the commencement of wet commissioning," the company said in a statement. "In addition to the increase in gold production guidance, the company is pleased to report decreased AISC guidance which reflects lower costs expected from Didipio (in the Philippines) and the inclusion of high margin ounces from Haile."

Lat month OceanaGold said it would leave the NZX at the end of the year to try and cut costs, keeping its listings on the ASX and Toronto stock exchange.

The miner has been expanding its operations with the development of the Haile mine and exploration of existing mines in New Zealand and the Philippines to extend the lives of those operations.

Its Didipio mine in the Philippines was one of a number of operations in the country facing suspension after a government audit of the site, and the company has been talking with the Department of Environment and Natural Resource about the issue. At the same time, OceanaGold was last month awarded the nation's Presidential Mineral Industry Environmental Award, its second year in a row where it was recognised for its efforts in responsible mining.

The company lowered its guidance for copper production at the Didipio mine in 2017 to between 15,000 tonnes and 17,000 tonnes from a range of 19,000-to-21,000 tonnes in 2016.

The NZX-listed shares last traded at $3.90, and have gained 39 percent so far this year.

BusinessDesk.co.nz

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