Things are getting better for OceanaGold Philippines, Inc. after their application for FTAA renewal was finally approved last year for the Didipio gold and copper mine. Last 14 July 2022, the Philippine Government finally granted OGPI another 25 years to operate. The company's operations had been halted for nearly two years due to a dispute between the mining firm and the provincial government. [1]
From the company's media release on their website, OPGI said that the new Financial or Technical Assistance Agreement (FTAA) applies retroactively from June 19, 2019. When they started operations again in November of 2021, they produced 14,863 ounces of gold and 2,323 tonnes of copper. This surpassed the company’s 2021 guidance range of 7,000 to 12,000 ounces of gold and 1,000 tonnes of copper.
Last 11 February 2022, Philippine Mining Club's 14th Webinar presented OceanaGold's David Way as keynote speaker. Way is the General Manager for New Zealand and Philippines of OceanaGold Corporation. His presentation is titled “Mining gold for a better future -- delivering on our commitments”. The virtual event was well attended with more than 200 attendees.
Upon the renewal of their FTAA contract last year, the company expressed their gratitude to the Philippine Government and that their top priority is to rehire and train its workforce in the Philippines.
During the PMC webinar, the General Manager said, "The Philippine Government has always been our partner in every stage of our operation. We keep them informed with the activities and seek their wisdom, especially in our commitment to mine safely, responsibly, and conscientiously."
Moreover, he said, "Our success is dependent on the strength of the workforce and on the relationship we have with our stakeholders. The Philippine Government has always been our partner in every stage of our operation. We keep them informed with the activities and seek their wisdom, especially in our commitment to mine safely, responsibly, and conscientiously."
"Through our transformative engagements with the Government, our valued regulators, Indigenous Peoples groups, and our host and neighboring communities, we listen to their advice, and respond to their support. We commit to being a responsible Corporate Citizen of the Philippines."
The current FTAA of OGPI covers 8,314.42 hectares. Direct community beneficiaries include: 1 host community, 10 neighboring communities, 17,000+ residents (as of 2015 census), 2 host municipalities, and 2 host provinces (Nueva Vizcaya and Quirino). [2]
Didipio Mine Workforce is composed of 1,145 employee (as of Dec. 31, 2021) wherein 99% is composed of Filipino workforce. The 25% of the Company's workforce at Didipio are women who are in professional level roles.
The FTAA was renewed on substantially the same terms and conditions and includes the following modifications:
> The equivalent of an additional 1.5% of gross revenue to be allocated to community development
> Reclassification of Net Smelter Return to be an allowable deduction and shared 60% / 40% rather than wholly included in government share
> Listing of the least 10% of the common shares in OceanaGold Philippines Inc. (OGPI), the Company's Philippine operating subsidiary and holder of the FTAA, on the Philippine Stock Exchange within the next three years
> OGPI shall offer for purchase by the Philippine Central Bank not less than 25% of its annual gold doré production at fair market price and mutually agreed upon terms
> Transfer of OGPI's principal office to a host province within the next two years
The additional 1.5% allocated to community development will take the form of increased contributions to communities in the region and provincial development project. While the existing fund of Social Development and Management Program will continue to be provided for the host and neighbouring communities, 1.0% of the additional 1.5% will be allocated to community development for additional communities and 0.5% to the host Provinces of Nueva Vizcaya and Quirino.
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OceanaGold reaches out to more communities
Under Section 13.3 of the renewed FTAA, the contractor company shall assist in the development of communities outside Didipio and adjacent barangays.
The new fund was named Community Development Fund (CDF) to distinguish itself from the Social Development Management Plan (SDMP) allocation which is mandated by the Philippine Mining Act of 1995.
Didipio as the host community and 10 neighboring villages are already covered by the SDMP which is funded by 1.5% of the company’s actual operating cost of the preceding year.
The Didipio Operations of OceanaGold has assigned its External Affairs and Communications Department to manage the implementation of the CDF. The department is now undertaking extensive research in preparation for the community consultations to craft the operational guidelines to manage the new fund.
The new FTAA provided the allocation for the CDF which amounts to one percent (1%) of the gross mining revenues of the preceding calendar year.
As Didipio returns to its optimum production, the amount allocated for the CDF will gradually increase and will be peak in 2024 and gradually slide down as production slows down towards the end of mine life.
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During his presentation at the Philippine Mining Club webinar, Way also discussed the main features of their mining operations, namely:
Processing Plant - use of cleaner production technology
Tailings Storage Facility - Downstream construction method, the safest method of tailings dam construction. Of note, their tailings meet the criteria for non-hazardous discharge.
Paste Backfill Plant – This is the country's mining milestone - the first automated paste plant infrastructure built in the Philippines.
His presentation further emphasised on how OGPI assures the safety of their employees in the underground mine. For example, OGPI uses Self Rescuers (by Draeger/MSA), a portable device, breathing apparatus to be used in case of gas outburst/fire, smoke, fumes and air is irrespirable. This apparatus provides oxygen for 15 to 25 minutes used during an emergency. The underground mine safety plan also includes a Refuge Chamber with a maximum capacity of 112 personnel. [2]
Way also mentioned that their mine site uses the first Rhino 100 in the Philippines. This equipment is the world's fastest raise borer that can drill 500 m a month.
On a final note, the General Manager’s report includes the 2021 Highlights:
“Delivering on our commitments - remains a key focus”
1) Improved Profitability - Cash balance increased to $133 million with total immediate available liquidity increasing to $163 million.
2) Didipio Restart - Didipio exceeded full year production guidance with 14,863 ounces of gold and 2,323 tonnes of copper produced over only two months; ramp-up to full production tracking ahead of schedule.
3) Haile Operations - Haile exceeded full year production guidance with an annual record of 189,975 ounces of gold produced.
4) Guidance Maintained - Consolidated full year gold production increased 20% year-on-year with 362,807 ounces produced.
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Reference:
[1] Atienza, K. and Ochave, R. (16 July 2021). "OceanaGold plans to reopen Didipio mine 'as soon as possible'". BusinessWorld Online. Retrieved from - https://www.bworldonline.com/oceanagold-plans-to-reopen-didipio-mine-as-soon-as-possible/
[2] Magdaong, Jason (24 Nov. 2021) “Working Safe Underground --Managing Safety Hazards with Management System, Protocols, and Use of Technological Solutions in Didipio Underground Mine". Presentation during the PMSEA Webinar.
