Oceanagold reports second quarter 2022 financial results

Highlights

• Second quarter gold production of 112,296 ounces and first half gold production of 246,331 ounces, a 39% increase over the first half of 2021.
• Second quarter consolidated All-in Sustaining Costs (“AISC”) of $1,430 per ounce and first half consolidated AISC of $1,243 per ounce.
• Second quarter revenue of $229 million, EBITDA of $75 million and net profit after tax of $19 million, leading to record first half revenue of $515 million, EBITDA of $233 million and net profit after tax of $98 million.
• Fully diluted adjusted earnings per share of $0.05 for the second quarter and $0.16 for the first half.
• Free cash flow of $9 million for the second quarter and $72 million for the first half.
• Net debt reduced to $156 million as at June 30, 2022, at a leverage ratio of 0.38 times.
• Repaid $50 million of the Company’s revolving credit facility, reducing drawn debt to $200 million.
• Waihi North Project consent application, including Wharekirauponga Underground Mine, lodged in June.
• Though the Supplemental Environmental Impact Statement (“SEIS”) Final Record of Decision (“ROD”) has yet to be issued, the Company is confident that it and the subsequent operating permits will be issued imminently.
• Full year consolidated guidance has been updated as follows:
  • Gold production guidance of 445,000 to 495,000 ounces of gold is reaffirmed.
  • Copper production guidance is increased to 12,000 to 14,000 tonnes.
  • Full year AISC guidance is increased 7.5% to $1,375 to $1,475 per ounce, reflecting cost inflation impacts and lower expected copper by-product credits due to a lower expected copper price.
  • Capital expenditures expected to be $30 million lower, to between $305 and $365 million.

Gerard Bond, President and CEO of OceanaGold, said “The Company delivered a solid second quarter reflecting operational performance in line with expectations across our portfolio. Together with strong prices we achieved record revenue in the first half of 2022 and strong free cashflow, allowing us to repay $50 million of drawn bank debt and strengthen the balance sheet which will enable continued investment in high value opportunities throughout our business.” 

“In the second quarter Haile continued to deliver to plan. Mining transitioned to the Haile pit and the operation continued to make good progress on productivity and efficiency initiatives. Though the SEIS is yet to be published, which means the Record of Decision and receipt of subsequent operating permits is yet to occur, we have been advised that it is in the final stages of editing and is very close to being published.”

“At Didipio, the team continue to do an exceptional job, with the second quarter being the first quarter where full underground mining rates were sustained. This is a great achievement so soon after recommencing operations.”

“While challenges persisted at Waihi, we saw an improvement in mining rates and reconciliation as mining commenced on areas better defined by the accelerated grade control drill program, and it is expected that performance will continue to improve over the coming quarters.”

“The strong first half performances from Haile and Didipio have led us to re-affirm our full-year consolidated production guidance of 445,000 to 495,000 ounces while increasing full-year copper production guidance. Reflecting material inflation-driven increases in key input costs across our business, most notably diesel costs, materials and consumables, combined with the decline in copper prices, we are increasing our full-year consolidated AISC guidance by approximately 7.5%, with AISC now expected in the range of $1,375 to $1,475 per ounce. Partially offsetting this increase in AISC is an expectation that total capital expenditures in 2022 will be $30 million lower, with sustaining capital and growth capital being between $20 million and $10 million lower than original guidance.”  

“In conjunction with today’s second quarter results, we announced that we have applied and received approval to delist from the ASX. While this decision was not easy given the Company’s historical ties to the ASX, we believe that consolidating the shares into one liquid market in which almost all of the shares are held will benefit shareholders.”

“I was pleased to announce earlier this week the considerable strengthening of our Executive Leadership Team, most of whom will be based in our Brisbane office. Having regard to the location of our shareholder base, our operations and opportunities, I will be relocating to Vancouver, Canada in the coming months and in due course this is where our corporate headquarters will be going forward,” said Mr. Bond.       

Further information is attached

(All financial figures in US Dollars unless otherwise stated)