Oceanagold Announces 2018 Guidance
Oceanagold Announces 2018 Guidance
1 February 2018
(All financial figures in US Dollars unless otherwise stated)
(MELBOURNE) OceanaGold Corporation (TSX/ASX: OGC) (the “Company”) is pleased to release its full year 2018 production and cost guidance. Additionally, the Company has provided details related to its capital cost program and expectations for the year.
Mick Wilkes, President and CEO said, “We expect
this year to be an exciting year for OceanaGold as we
advance our expansion plans at Haile and Waihi through
prudent capital investment and the commencement of the
permitting process in each jurisdiction. We will drive
operational enhancements at Didipio and Haile while
furthering our extensive exploration activities across our
business to create organic growth.”
“After a strong finish to 2017, the Haile Gold Mine is expected to increase gold production by 20% to 25% year-on-year with higher throughput rates. We also expect a solid year at Macraes with a 20% increase in production from higher grades at Coronation North.” He added, “After the strong performance from Didipio last year, we see 2018 as a year of transition for the asset through the steady ramp-up of mining rates from panel one in the underground and continued development of panel two. While at Waihi, our focus is to further advance and define our expansion plans for the operation which should deliver significant benefits to our communities and create value for our shareholders.”
In addition, the Company is pleased to provide its 2018 capital expenditure program, which includes capital investments for growth initiatives such as the Haile expansion, the Martha Project and development of the second panel at Didipio underground. Exploration expenditures are consistent with 2017 and reflect the Company’s extensive drilling programs.
At Haile, the Company will continue to identify bottlenecks and increase productivity to further improve throughput rates. As a result, the operation is expected to increase production by 20% to 25% from 2017 with source feed from both the Mill Zone and Snake Pits.
Growth capital for 2018 at Haile is expected to range between $40 million and $45 million as part of the recommendations outlined in the Optimisation Study which was completed in June 2017. Capital expenditures for 2018 at Haile include the procurement and installation of a pebble crusher, tower mill and Isa mill for additional fine grinding capacity, plus other infrastructure required to debottleneck the plant and incrementally increase plant throughput rates toward the optimised design of between 3.5 and 4.0 million tonnes per year, whilst enhancing gold recoveries.
Although plant recoveries have consistently averaged in the low 80% range since the commencement of commercial production, the grind size achieved has been only 19 microns. The installation of additional fine grinding capacity is designed to reduce the grind size to 13 microns, which the Company expects will potentially further increase recoveries and deliver additional value from the asset.
Permitting of the expanded Haile operation is expected to commence in the second quarter with the main components of the permitting being the development of an underground operation at Horseshoe, the expansion of the existing open pit designs and provision for additional waste and tailings facilities.
At Didipio, production in 2018 is expected to be lower than in 2017 mainly due to treating an increased proportion of lower-grade stockpile material while ramping up the higher-grade production from the newly developed underground mine. The Company expects an increased proportion of higher grade mill feed to come from the underground in 2019 and beyond, which will result in gold production of between 110,000 and 130,000 ounces.
Underground ore was delivered to the ROM pad early in 2018 while construction of the primary underground pump and paste-fill plant was completed with commissioning currently underway. Once commissioned, stoping from panel one of the underground will steadily ramp-up, delivering 500,000 to 600,000 tonnes of mill feed in 2018 and higher-grades in the second half of 2018. Construction of panel two has commenced and as construction continues mill feed will increase, whereby at the end of 2019, when construction is expected to be complete, the underground mining rate will increase to a steady-state of 1.6 million tonnes per annum.
The Company is also in the process of updating the mine plan at Didipio, which is expected to deliver enhanced value through a revised mine plan, mining higher grade ore from the breccia zone earlier in the mine life.
Waihi, the production decrease is a result of the mining
sequence whereby the operation will be mining lower grade
areas of the underground veins for much of the year.
The Company will continue to advance the Martha Project with permitting expected to commence in the second quarter. Drilling from the two underground drill drives will continue, with the goal of converting the targeted one million ounces to resources.
At Macraes, the increased production is mainly attributable to higher grades from Coronation North. This higher head grade is expected to deliver a 20% year-on-year increase in production. The higher production and improved margins at Macraes are expected to persist through 2019 and into 2020.
Exploration capital expenditures are similar to 2017 and support the Company’s extensive drilling program across its operational footprint and Greenfields targets such as WKP and in the Carolinas. Results from drilling over the past few years have delivered positive results with significant high-grade intercepts across each asset and potential extensions to the resource base.
Mr. Wilkes went on to say, “Our focus continues to be on delivering sustained and long-term value. We will invest judiciously seeking opportunities that have the potential to generate strong returns on invested capital, and maintain the same level of performance achieved over the past several years.”
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