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OCEANAGOLD REPORTS FIRST QUARTER 2022 FINANCIAL RESULTS
by Philippine Resources - May 04, 2022
Photo credit: Bilyonaryo
OceanaGold Corporation reported its financial and operational results for the quarter ended March 31, 2022. Details of the consolidated financial statements and the Management Discussion and Analysis are available on the Company’s website.
Gerard Bond, President and CEO of OceanaGold, said “OceanaGold has started the year strongly with the first quarter safely delivering record quarterly revenue and EBITDA and significant Free Cash Flow. This strong Free Cash Flow generation allowed us to achieve a 29% reduction in net debt and reduce our leverage ratio to 0.40 times. Our stronger balance sheet puts us in a solid financial position from which we can invest in attractive growth projects to create value for our shareholders.”
“This quarter’s performance was underpinned by record quarterly gold production at our Haile operation in the United States and a very strong first quarter of full production at our Didipio operations in the Philippines. At Haile, we are continuing to see the benefits of operational and productivity improvements that began in mid2021. At Didipio, the operation achieved full underground mining rates at the end of the first quarter, ahead of schedule by nearly one quarter.”
“Though there is a lot to celebrate in the quarterly results, we also know that there is a lot of work ahead of us to fully optimise the potential of the business. At Waihi, poor grade reconciliation at Martha underground had an impact on its quarterly performance. A grade control drill programme is currently underway to deliver improved resource definition and allow for more optimal mine planning and stope sequencing, which we expect will improve the performance of this orebody and mining operation overall.”
“We also have a pipeline of organic growth projects that have the potential to create additional value for shareholders. Once we commence development of the underground mine at Haile, we believe we will begin to unlock the true upside potential of this orebody. Looking further ahead, Wharekirauponga (“WKP”) has the potential to be a significant, high-grade mine within our portfolio.”
“We remain focused on safely and responsibly delivering on our production guidance for 2022, maximising Free Cash Flow generation and progressing the attractive growth options in our portfolio.” said Mr Bond.
The Company produced 134,035 ounces of gold and 3,510 tonnes of copper in the first quarter of 2022, representing a 26% increase in gold production compared to the previous quarter and a 61% increase when compared to the first quarter of 2021. The stronger quarterly production was driven by record quarterly production at Haile and a solid quarter of production at Didipio, partially offset by decreased production at Waihi.
On a consolidated basis, the Company recorded an AISC of $1,084 per ounce on gold sales of 129,191 ounces and copper sales of 3,711 tonnes. AISC was 18% lower quarter-on-quarter with the benefits from a full quarter of operations at Didipio partially offset by increased sustaining capital investments. The Company’s AISC decreased 14% when compared to the first quarter of 2021, also due primarily to the inclusion of a full quarter of operations at Didipio.
Haile delivered 60,249 ounces of gold, representing a record quarter for production. This represents an increase of 42% quarter-on-quarter and was mainly driven by increased mill feed, higher head grade and better gold recoveries. Year-on-year, this represents a 36% increase in production, resulting from higher mill feed, grade, and recovery. The higher grades were driven by ore sourced from Ledbetter Phase 1. First quarter AISC at Haile was $1,070 and cash costs were $567 per ounce sold.
The Company expects the Supplemental Environmental Impact Statement (‘SEIS’) Final Record of Decision and receipt of subsequent operating permits to occur in the second quarter of 2022. The permits are necessary to allow underground mine development and expansion of the operating footprint to accommodate the construction of future PAG waste storage facilities and to allow increased water discharge rates. As previously guided, the ongoing delay in the receipt of the SEIS decision and associated permits continues to impact productivity at Haile, where mining rates are limited by additional material and water re-handling, reducing output and increasing costs. Upon receipt of the necessary permits, the Company expects an improvement in operational efficiencies and lower mining unit costs to be delivered progressively over a two-year period. An updated National Instrument (“NI”) 43-101 Technical Report for Haile was released 31 March 2022. The recently completed technical review assumed receipt of the necessary permits related to the SEIS by the end of the second quarter of 2022.
Didipio produced 29,446 ounces of gold and 3,510 tonnes of copper, reflecting a 98% increase in gold production and 51% increase in copper production quarter-on-quarter. This represents the first full quarter of operations since the restart of production in November 2021. The underground mine achieved full mining rates at the end of the first quarter, ahead of schedule. Didipio’s first quarter AISC and cash costs were $40 per ounce sold and $26 per ounce sold respectively. An updated NI 43-101 Technical Report for Didipio was released 31 March 2022.
Macraes produced 37,588 ounces of gold in the first quarter, a slight increase quarter-on-quarter and a 9% increase from the first quarter of 2021. Relative to the prior quarter, production increased on higher average head grade that was partially offset by lower mill feed and reduced gold recoveries. Macraes’ first quarter AISC and cash costs were $1,394 and $1,005 per ounce sold respectively.
Waihi produced 6,752 ounces of gold in the first quarter, 43% lower quarter-on-quarter and 56% higher than the first quarter of 2021. The quarter-on-quarter decrease in production was attributed to lower ore tonnes and grade mined from Martha Underground, where mining was in areas of the resource with low resource definition and under-reconciled to the resource model in both grade and tonnes of ore. The Company estimates the under reconciliation accounted for approximately half of the negative impact during the quarter, with poor ground conditions in parts of the orebody and reduced workforce availability due to COVID-19 isolations also contributing factors. Results from the accelerated grade control drill program continued to update the resource models currently being used for mine planning. Grade control drilling to support mining for the remainder of 2022 and 2023 is expected to be completed progressively across the second and third quarters of 2022. This program is expected to better inform the detailed mine planning and design process, optimise the stoping sequence, reduce ore loss and deliver improved performance.
Preparation for the lodgement of a consent application for the Waihi North Project, inclusive of WKP, continued to progress with environmental assessments nearing completion. The Company expects to lodge its formal consenting application, inclusive of stakeholder feedback, in the second quarter of 2022. The critical path for first production from the Waihi North Project remains the consenting process.
The Company reported record quarterly revenue of $285.7 million, reflecting a 37% increase quarter-on-quarter. The Company reported record quarterly EBITDA in the first quarter of $158 million, reflecting a 78% increase quarter-on-quarter on stronger gold sales volumes from Haile, Didipio and Macraes and higher average gold and copper prices received and lower unit costs, partially offset by lower sales at Waihi. First quarter 2022 EBITDA was 155% higher than the first quarter of 2021 related to resumption of operations at Didipio and increased gold prices.
First quarter 2022 adjusted earnings after tax were $81.8 million or $0.11 per share which compared to $29.3 million in the fourth quarter of 2021 and $17.3 million in the first quarter of 2021.
Cash flows from operating activities for the first quarter of $143.8 million exceeded the comparative quarters, driven by stronger EBITDA though partially offset by unfavourable working capital movements. Operating cash flow per share before working capital movements was $0.22 in the first quarter.
The Company generated $63.2 million in free cash flow during the first quarter. As at the end of the first quarter Net Debt including equipment leases was $168.4m, which was $69.5m or 29% lower than at the end of December 2021. The Company had immediately available liquidity of $224.7 million, including $194.7 million in cash.
Article courtesy of Oceanagold Corporation
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Abe Almirol - June 21, 2021
OceanaGold opens health facility for Covid-19 patients
OceanaGold Philippines, Inc. (OGPI) has opened an isolation facility for patients infected with Covid-19 at its host community in Didipio here. The facility is also open for patients from its neighboring villages. Inaugurated last June 15, the Didipio Family Health Center (DFHC) can accommodate up to 15 people with separate room allocations for confirmed cases, suspected cases, and close contacts individuals. The facility is complete with medicine for patients with respiratory problems. It is also equipped with oxygen and rapid antigen test kits. OGPI will also allocate one of its company nurses to take special regular duty at DFHC. Following the inauguration of the facility, the four barangay health workers of Barangay Didipio have already transferred to the newly refurbished DFHC facility. The initiative came following the surge of Covid-19 cases in Didipio and neighboring barangays soaring up to 147 cases since March. In his remarks during the facility inauguration, Mayor Romeo Tayaban emphasized the importance of an established isolation structure while noting the continuous rising of cases in the region. “Let’s make this DFHC useful for the next generation,” he said. The mining company allocated around P1.6 million for the procurement of equipment, medical supplies, and the much-needed repairs of the health facility. DFHC will be operated by the barangay LGU with the supervision of the municipal health office here. Village acting chair Henry Guay, in coordination with MHO and OGPI, is now working on the accreditation of the facility by DOH so that PhilHealth members could avail of their benefits when confined to the facility. Dr. Elizabeth Joaquin, municipal health officer of Kasibu, looks forward to the development of DFHC as a hospital in the future so it can cater more patients even from other areas of Kasibu. Engr. Edgar Rivera, officer-in-charge of OGPI, emphasized the importance of mutual cooperation amon the LGUs, community, and private sector in overcoming the challenges brought about by the Covid-19 pandemic. “As long as OGPI is here, we continue to work with our stakeholders to provide necessary support in the achievement of their goals,” he said. The Covid-19 infections continue to create havoc as more areas outside the National Capital Region become areas of concern. Cagayan Valley was placed under the more restrictive MECQ until the end of the month.
Philippine Resources - July 14, 2021
OceanaGold Announces Didipio FTAA Renewal
OceanaGold Corporation today advises that the Philippine Government has renewed the Didipio Mine Financial or Technical Assistance Agreement (“FTAA”) for an additional 25-year period, beginning June 19, 2019. The renewed FTAA reflects similar financial terms and conditions while providing additional benefits to the regional communities and provinces that host the operation. Michael Holmes, President and CEO of OceanaGold said, “we are pleased to confirm the renewal of the Didipio Mine’s FTAA and thank the Philippine Government for their endorsement and renewal. We have worked through the renewal process in partnership with the Government and regulatory agencies. We look forward to commencing restart activities and continuing to work in partnership with our regulators, communities, employees, and all stakeholders to contribute to the Philippines’ post-COVID-19 economic recovery.” The Company has maintained the mine and associated facilities in a state of operational stand-by. The Company’s first operational priority is the rehiring and training of its Philippine workforce, which will include a focus on safeguarding workers from the current risks associated with COVID-19. The Company expects to provide additional details on the restart and resumption of normal operations at Didipio, including the timeline and an update to Company’s 2021 guidance, in due course. The Company plans a staged restart of operations with milling to recommence as soon as possible utilising stockpiled ore of which the operation has approximately 19 million tonnes available. The Company aims to achieve full underground production capacity within twelve months. Once fully ramped-up, the Company expects Didipio to produce approximately 10,000 gold ounces and 1,000 tonnes of copper per month at first quartile All-in Sustaining Costs. Didipio is a major direct and indirect employer in the provinces of Quirino and Nueva Vizcaya and a significant contributor of socio-economic benefits for the local and national economies. The Didipio Gold and Copper Mine operates to the highest environmental and social standards and has been recognised as one of the most responsible in the country. Renewal Terms 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 at 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 projects. While the existing fund for 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.
Marcelle P. Villegas - September 30, 2019
OceanaGold: Philippine Court of Appeals Sets Hearing Date for Injunction
(Photo courtesy of Mr Jason Magdaong, OceanaGold Phils. Inc. - “Didipio Mine: The Renewal of the Philippines’ First FTAA”) According to OceanaGold Corporation (Melbourne), the Philippines Court of Appeals in Manila had set last 18 September 2019 as the hearing date for the company's application for a Writ of Preliminary Injunction. This is part of the company's appeal against the Nueva Vizcaya Provincial Court ruling of denying OceanaGold Phils. Inc.’s (OGPI) request to end the unlawful restraint of operations. The Provincial Local Government Units of Nueva Vizcaya (PLGU) has been impeding access to the mine site since 1 July 2019. This is in response to an unlawful directive from the Governor to 'restrain any operations of the company. OGPI points out that the regulatory authority over the Didipio Mine rests with the National Government. They also clarified that the Local Government Code of 1991 (Republic Act No. 7160) does not grant the power of authority to the Provincial Governor or any local government officer to restrain any aspect of the Didipio operation.  OGPI continues to work with the National Government to finalise the renewal of their Financial or Technical Assistance Agreement (FTAA) and remains open to the opportunity to engage with the Provincial government and work together in the best interest of the local stakeholders. The Company remains strongly committed to operating in accordance with the law and will always comply with its responsibility under its contract with the Philippine Government.  Mr Mick Wilkes, President and CEO of OceanaGold said, "The Company has successfully developed and operated the Didipio Mine in the Philippines with a focus on delivering socio-economic benefits to local communities utilising international best practices and gaining a strong social license to operate. OceanaGold has established sound and collaborative relationships with regulatory authorities and stakeholders based on mutual respect." "While this process is taking some time, we will always operate in line with our values and commitment to responsible mining, and this means working transparently with the Philippine regulatory authorities to maximise the speed of the renewal. We are encouraged by the engagement with the government to date as we continue to work towards a mutually-acceptable path forward on the FTAA renewal." "I would like to recognise our world-class Philippine workforce of 1,500 workers who have remained focused on safety and preserving optionality at site during this uncertain time. We are proud to have positively contributed to the Barangay of Didipio, Province of Nueva Vizcaya and Quirino and neighbouring communities since 2012."  The Didipio Mine of OceanaGold Phils. is an underground gold and copper mine located across the provinces of Quirino and Nueva Vizcaya. The mine operation has received numerous awards such as two Presidential Awards for being the most environmentally and socially responsible mining operations in the Philippines. Overseas, the company was awarded the 1st ASEAN Mineral Award for best practices in sustainable development. OceanaGold's Didipio mine site (Philippines) is considered one of the safest gold mining operations in the world because for the past two years, the company has deployed state-of-the-art automated and digital underground mining technology. For the past years, OGPI’s Didipio project has been providing significant socio-economic assistance to the province of Nueva Vizcaya and Quirino. Other than providing jobs to 1,500 workers (97% are Filipinos, 59% are from local communities) the company also provides several thousands of additional livelihood opportunities and indirect jobs through partnerships with cooperatives and social development organisations. As an international company, OceanaGold Corporation is a mid-tier, high-margin, multinational gold producer with assets located in the Philippines, New Zealand and the United States. The Company's assets encompass the Didipio Gold-Copper Mine located on the island of Luzon in the Philippines. In New Zealand, OceanaGold Corporation operates the high-grade Waihi Gold Mine, the Frasers mine, and the largest gold mine in the country at the Macraes Goldfield.  In the United States, the Company operates the Haile Gold Mine in South Carolina. The Haile Gold Mine is a top-tier, long-life, high-margin asset. OceanaGold Corporation also has a significant pipeline of organic growth and exploration opportunities in the Americas and Asia-Pacific regions. From their media release, the Company states, “OceanaGold has operated sustainably since 1990 with a proven track-record for environmental management and community and social engagement. The Company has a strong social license to operate and works with its valued stakeholders to identify and invest in social programs that are designed to build capacity and not dependency.”  “In 2019, the Company expects to produce between 500,000 to 550,000 ounces of gold and 14,000 to 15,000 tonnes of copper at All-In Sustaining Costs ranging between $850 and $900 per ounce sold.”  #DidipioMine #OceanaGoldPH #ResponsibleMining #Philippines Reference:  OceanaGold Corporation Media Release - 13 Sept. 2019, retrieved from - https://www.oceanagold.com/investor-centre/news-releases/ Photos: Courtesy of OceanaGold (Phils.) Inc. - Retrieved from - https://www.oceanagold.com/downloads/images/
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Philippine Resources - September 27, 2022
PH-EITI holds first meeting under Marcos admin, approves plan to improve multi-stakeholder engagement in the extractives
Photo credit: PH-EITI The Philippine Extractive Industries Transparency Initiative (PH-EITI) convened its first Multi-Stakeholder Group (MSG) meeting under the Marcos administration on Friday (September 16), two weeks after the country reaffirmed its commitment to implement the EITI. EITI is the global standard for transparency and accountability in the oil, gas, and mining sectors. The MSG – the body that governs EITI implementation in the country – is chaired by the Department of Finance (DOF) and composed of representatives from government, industry, and civil society. The government began implementing the EITI in 2013 pursuant to Section 14 of Executive Order No. 79, s. 2012 and Executive Order No. 147, s. 2013 that created the PH-EITI. “This meeting demonstrates the government’s continuing commitment to improve transparency and accountability in the extractive industries,” said Finance Undersecretary and PH-EITI Focal Person and Chair Cielo Magno. To improve resource governance, the MSG agreed to strengthen spaces for multi-stakeholder participation and advocate for more spaces along the extractive industry value chain. The group also agreed to include an MSG report on the status of civic engagement in the annual country report. The MSG also discussed remaining initiatives for 2022, including the production of the FY 2021 PH-EITI Country Report, the 2022 National Conference, and a planned visit of EITI Chair and former New Zealand Prime Minister Helen Clark to the Philippines in November 2022. The PH-EITI publishes independently reconciled data on oil, gas, coal, and mineral resources through an annual and comprehensive country report. To date, the PH-EITI has produced seven country reports, reconciling over P362.5 billion in government revenues from extractive projects from 2012 to 2019. Aside from disclosing extractives data to inform research and policy recommendations, the PH-EITI also provides space for multi-stakeholder participation in resource governance. Article courtesy of the Department of Finance
Philippine Resources - September 27, 2022
Marcos admin commits to transparency and good governance in the extractive industries
Photo credit: EITI / CC BY-SA The Marcos administration demonstrated its commitment to pursue transparency in natural resource governance by rejoining the Extractive Industries Transparency Initiative (EITI) and enabling the continued development of the mining sector. In a letter to EITI Chair and former New Zealand Prime Minister Helen Clark, Finance Secretary Benjamin Diokno cited the value of good governance and anti-corruption measures in maximizing the extractive sector’s contribution to resource mobilization and sustainable economic growth. EITI will complement the administration’s agenda on transparency and accountability. “We welcome the opportunity to re-engage in EITI. We also commend the progress of the EITI Board in reviewing the validation standard and making it more relevant to implementing countries. We believe that EITI is an important tool for resource-rich countries like the Philippines to improve transparency and increase accountability in the management and governance of the extractive industries,” said Secretary Diokno. Secretary Diokno said that other government agencies, as well as industry and civil society stakeholders who have been actively implementing EITI in the country, are supportive of the move to rejoin the global initiative. On June 20, 2022, the Philippines through the Department of Finance (DOF) withdrew its participation in the EITI over concerns on metrics and procedures used for assessing country compliance with the international organization’s transparency requirements. In an August 23, 2022 letter, EITI Chair Helen Clark invited Secretary Diokno to re-state the country’s commitment to the EITI on behalf of the Marcos administration and build on the progress that the Philippines has achieved in the past nine years. The PH-EITI multi-stakeholder group is chaired by the DOF and is composed of representatives from government, industry, and civil society. The government began implementing the EITI in 2013 pursuant to Section 14 of Executive Order No. 79, s. 2012 and Executive Order No. 147, s. 2013 that created the Philippine EITI (PH-EITI). Annual disclosure of contracts, financial, economic, social and environmental data is mandatory for extractive industries pursuant to the Department of Environment and Natural Resources (DENR) Department Administrative Order (DAO) No. 2017-07. To date, the PH-EITI has produced seven country reports, covering data from mining, oil, gas, and coal industries and reconciling over P362.5 billion in government revenues from extractive projects from 2012 to 2019. In 2017, the Philippines was recognized by the EITI as the first among 50 plus countries in the world to have fully complied with the 2016 EITI Standard. The EITI updates its standard every three years and subjects member countries to validation to ascertain their compliance. Secretary Diokno said that the Marcos administration is committed to engage and unite various stakeholders in pursuing good governance and policy reforms in the country. “Rest assured that we remain committed to pursuing good governance in the extractive sector,” said Secretary Diokno. Article courtesy of the Department of Finance
Philippine Resources - September 26, 2022
Metro Manila Subway project nominated for int’l digital awards
Artist rendering of the Metro Manila Subway (Photo courtesy of DOTr) The Metro Manila Subway Project (MMSP) has been named as one of the finalists at the 2022 Going Digital Awards in Infrastructure for the best use of infrastructure software to save both time and money. The Department of Transportation (DOTr) said the general consultant for the MMSP Phase 1, the Japanese consortium Oriental Consultants Global (OC Global), developed a common digital engineering system and a “single source of truth” using ProjectWise and ComplyPro -- both programs by Bentley Software Inc. The MMSP, the DOTr said, presented communication and coordination challenges that other software programs failed to address. “The project team at OC Global realized that the implementation of collaborative BIM workflows, proactive risk management, and cost monitoring would require a connected data environment to be established,” it said. The system developed by OC Global for the MMSP enabled real-time data sharing that optimized collaboration -- saving an estimated 5,000 resource hours within the project’s first six months. “Combined with SYNCHRO for construction simulation, Bentley’s integrated technology solution identified and resolved 50 clashes, eliminating rework, shortening the project schedule, and saving costs. The successful BIM (Building Information Modeling) implementation has already achieved a return of investment of over USD600,000,” it said. The Going Digital Awards in Infrastructure is an annual event meant to honor Bentley software users for advancing infrastructure design, construction, and operations worldwide. The event’s finalists are deemed to demonstrate “excellence and digital advancements” in their respective award categories. The award winners will be announced during the program’s main event in London on Nov. 15. By Raymond Carl Dela Cruz Article courtesy of the Philippine News Agency
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