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OceanaGold Signs Letter of Intent with Newmont Mining

OceanaGold Signs Letter of Intent with Newmont Mining to Acquire Waihi Gold Mine Operations in New Zealand

(MELBOURNE) OceanaGold Corporation (TSX/ASX/NZX: OGC) (“OceanaGold”) is pleased to announce that it has signed a non-binding Letter of Intent (“LOI”) with Newmont Mining Corporation (“Newmont”) to acquire Newmont’s Waihi Gold Mine (“Waihi”) in New Zealand for US$101 million in cash plus customary adjustments. Newmont will also retain a 1% Net Smelter Royalty for gold ounces mined from one specific exploration tenement capped at 300,000 ounces of production. The proposed transaction is subject to completion of comprehensive due diligence, execution of a definitive acquisition agreement, Board and regulatory approvals and other customary closing conditions.

Mick Wilkes, Managing Director and CEO commented, “We have long believed that Waihi represents a strong strategic fit within OceanaGold. We are excited about the prospect of acquiring it and welcoming its experienced workforce to our team. Waihi represents a unique opportunity for us to acquire a high-quality asset that has demonstrated the propensity to extend mine life for more than two decades in what is still a very prospective, high-quality goldfield.” He added, “This proposed acquisition is accretive to shareholders, grows our production profile and importantly will further reduce our industry leading All-In Sustaining Cost (AISC) profile.”

Proposed Transaction Highlights

• High-grade and low-cost operation expected to contribute meaningful gold production

• Substantial free cash flow generation anticipated to result in a rapid payback on investment

• Significant opportunities to extend mine life through exploration and development, as demonstrated by the performance over 27 years operating in this highly prospective goldfield

• Synergies with OceanaGold’s existing operations and extensive experience in New Zealand

• Highly prospective regional exploration potential

• Accretive to near-term earnings per share and cash flow per share

Mr. Wilkes went on to say, “We recently announced a mine life extension to the Frasers Underground Mine which combined with a weaker New Zealand dollar and lower fuel prices has enhanced the value of our Macraes operations. We are investing in exploration along strike and underground at Macraes and believe there is good potential to underpin 3 to 5 years of steady operations producing around 150,000 ounces of gold per annum while generating material free cash flow. This combined with the proposed Waihi transaction creates an attractive and profitable gold business in New Zealand that we believe will generate strong returns for years to come.”

Waihi Mine Operations Overview

• Location: Waihi, New Zealand (approximately 150 kilometers southeast of Auckland)

• History: Open pit mine since 1988, and underground operations since 2005

• Current operations: Correnso Underground Mine

• Processing: Conventional SAG mill, ball mill and CIP circuit, with plant capacity of up to 1.3 million tonnes per annum

• Reserves: 2 Mt grading 5.52 g/t containing approximately 360 koz gold

• Production: Expected to produce on average 100,000 ounces per annum through to 2018 from Correnso Underground Mine

• All-in-sustaining costs: Expected to be US$760-820 per ounce

• Geology: low-sulphidation epithermal gold and silver deposits hosted in quartz veins

• Employees: 340 person workforce

• Community: Long history of community engagement and support for community development

Information in relation to Waihi Mine Operations Overview is from Newmont’s 2014 Reserves and Resources Statement (dated February 19, 2015), Newmont’s 2014 Financial Results (dated February 19, 2015) and from Newmont.

Potential Transaction Overview

Pursuant to the LOI, Newmont has granted OceanaGold an exclusivity period until June 1, 2015 for OceanaGold to complete its due diligence review and for Newmont and OceanaGold to execute a definitive acquisition agreement.

The purchase price of US$101 million in cash plus customary adjustments will be paid on legal closing, which is subject to customary closing conditions, including Board and regulatory approvals. Under the proposed transaction, and subject to legal closing occurring, OceanaGold will have the economic benefit of the asset with effect from 1 July 2015 with expected formal closing early in the third quarter of 2015.

Financing

OceanaGold will fund the purchase price from cash and undrawn facilities. As at 31 March 2015, OceanaGold had cash of US$59.6 million and has drawn US$77.8 million from its revolving credit facility leaving US$97.2 million undrawn. In order to ensure a sufficient liquidity buffer going forward, OceanaGold has received highly confident letters from its relationship banks to increase its revolving credit facility to a total of US$225 million. Prior to the transaction closing, OceanaGold will finalise the negotiation of this amendment to its revolving credit facility.

Advisors

With respect to the proposed transaction, Citigroup Global Markets Australia Pty Limited is serving as financial advisor and Anderson Lloyd is serving as legal advisor to OceanaGold.


ENDS


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