OceanaGold Reports Fourth Quarter and Full Year 2023 Operating and Financial Results
(All financial figures in
At Haile, the Horseshoe Underground mine increased its production of higher-grade ore feed and, with the underground mine ramping up to full capacity and with access to ore in Ledbetter open pit improving through the first half of 2024, we expect improved performance quarter on quarter from Haile over the coming year. Didipio had an exceptional fourth quarter, beating increased guidance for the year due to earlier access into higher grade areas of the mine. Both
2024 is a transformational year for
This exciting profile positions the Company to continue strengthening the balance sheet, which we expect to be further enhanced this year with the completion of the monetization of 20% of Didipio. We will also continue to explore and invest in growth options such as Palomino and Wharekirauponga, especially with the improved investment climate in
_______________________ |
1 Based on the mid-point of production guidance. See Q4 2023 MD&A for more information |
Highlights
Achieved 2023 Guidance, Safely and Responsibly
- Produced 477,313 ounces of gold and 14,172 tonnes of copper, in-line with original 2023 guidance, including delivering the Horseshoe Underground mine at Haile into production, and exceeding original production guidance at Didipio and Macraes.
-
All-In Sustaining Cost ("AISC")1 of
$1,587 per ounce, in-line with updated 2023 guidance and excluding 11,009 ounces of gold produced but not sold until earlyJanuary 2024 . -
Record full year revenue of
$1.0 billion , driven by strong sales at record average realized gold prices. -
Ended the year with Net Debt1 of
$170.1 million at a Leverage Ratio1 of 0.41x, and refinanced the revolving credit facility (the "Facility") with extended maturity and improved terms. - Released updated Reserves and Resources, including Indicated Resource growth to 1 million ounces of gold at 15.9 g/t at Wharekirauponga and initial Reserves of 380,000 ounces at 2.9 g/t at Palomino at Haile.
2024 Guidance and Three-Year Outlook
- ~13% 2 increase in 2024 gold production, with production guidance of 510,000 to 570,000 ounces and 12,000 to 14,000 tonnes of copper, driven by growth at Haile.
-
Lower unit cost of gold produced in 2024, with 2024 AISC1 guidance of
$1,475 to$1,600 per ounce sold. AISC in the first quarter is expected to be higher than the fourth quarter of 2023, decreasing significantly throughout the year as open pit mining transitions into ore at Haile and Macraes throughout the year. - Multi-year consolidated gold production growing by at least 30%3 from 2023 to 2026 at a decreasing AISC1.
-
Initial public offering of 20% of
OceanaGold Philippines Inc. , which holds Didipio, in mid-2024. Proceeds will be applied to reduceOceanaGold's debt, further strengthening the balance sheet. -
Declared a
$0.01 per share semi-annual dividend inFebruary 2024 , payable inApril 2024 .
1 Refer to "Non-IFRS Financial Information" in the MD&A
2 Derived by the mid-point of 2024 gold production guidance relative to 2023 actual gold production
3 By the mid-point of 2026 guidance relative to 2023 actual gold production
Table 1 – Production and Cost Results Summary
Quarter ended |
|
Haile |
Didipio |
Waihi |
Macraes |
Consolidated |
||
Q4 2023 |
Q3 2023 |
Q4 2022 |
||||||
Production, Sales & Costs |
|
|
|
|
|
|
|
|
Gold Produced |
koz |
37.6 |
42.8 |
13.3 |
36.1 |
129.8 |
99.0 |
120.9 |
Gold Sales |
koz |
29.6 |
39.7 |
13.1 |
36.3 |
118.8 |
97.9 |
118.7 |
Average Gold Price |
US$/oz |
1,996 |
2,039 |
1,975 |
1,947 |
1,993 |
1,934 |
1,769 |
Copper Produced |
kt |
— |
3.8 |
— |
— |
3.8 |
3.4 |
3.5 |
Copper Sales |
kt |
— |
3.9 |
— |
— |
3.9 |
3.1 |
3.5 |
Average Copper Price 1 |
US$/lb |
— |
3.80 |
— |
— |
3.80 |
3.76 |
3.91 |
Cash Costs |
US$/oz |
1,521 |
549 |
1,345 |
901 |
987 |
1,003 |
880 |
Site AISC 2 |
US$/oz |
2,570 |
737 |
1,829 |
1,468 |
1,658 |
1,911 |
1,602 |
Operating Physicals |
|
|
|
|
|
|
|
|
Material Mined |
kt |
7,253 |
448 |
265 |
12,819 |
20,785 |
19,741 |
23,283 |
Waste Mined |
kt |
6,838 |
51 |
131 |
11,138 |
18,158 |
16,824 |
19,453 |
Ore Mined |
kt |
415 |
397 |
134 |
1,681 |
2,627 |
2,917 |
3,830 |
|
kt |
874 |
1,015 |
129 |
1,655 |
3,673 |
3,260 |
3,481 |
|
g/t |
1.62 |
1.43 |
3.44 |
0.82 |
1.27 |
1.12 |
1.28 |
Gold Recovery |
% |
82.2 |
91.7 |
93.7 |
83.0 |
86.5 |
84.2 |
84.6 |
Capital Expenditures |
|
|
|
|
|
|
|
|
Sustaining |
US$M |
8.5 |
5.9 |
1.2 |
6.5 |
22.2 |
23.5 |
31.8 |
Pre-strip & Capitalized Mining |
US$M |
20.9 |
1.6 |
4.0 |
15.1 |
41.6 |
47.2 |
37.9 |
Growth |
US$M |
4.5 |
4.5 |
2.0 |
0.6 |
13.0 |
19.5 |
17.2 |
Exploration |
US$M |
1.6 |
1.0 |
4.0 |
0.6 |
7.2 |
7.0 |
5.6 |
Total Capital Expenditures |
US$M |
35.5 |
13.0 |
11.2 |
22.8 |
84.0 |
97.2 |
92.5 |
Year ended |
|
Haile |
Didipio |
Waihi |
Macraes |
Consolidated |
|
2023 |
2022 |
||||||
Production, Sales & Costs |
|
|
|
|
|
|
|
Gold Produced |
koz |
152.5 |
138.5 |
49.3 |
137.0 |
477.3 |
472.2 |
Gold Sales |
koz |
146.2 |
135.7 |
48.9 |
137.1 |
467.9 |
469.0 |
Average Gold Price |
US$/oz |
1,953 |
1,974 |
1,950 |
1,940 |
1,955 |
1,813 |
Copper Produced |
kt |
— |
14.2 |
— |
— |
14.2 |
14.4 |
Copper Sales |
kt |
— |
13.8 |
— |
— |
13.8 |
14.7 |
Average Copper Price 1 |
US$/lb |
— |
3.87 |
— |
— |
3.87 |
3.82 |
Cash Costs |
US$/oz |
884 |
614 |
1,300 |
996 |
883 |
869 |
Site AISC 2 |
US$/oz |
1,921 |
730 |
1,914 |
1,570 |
1,587 |
1,407 |
Operating Physicals |
|
|
|
|
|
|
|
Material Mined |
kt |
33,197 |
1,735 |
981 |
48,386 |
84,300 |
88,227 |
Waste Mined |
kt |
30,168 |
152 |
509 |
40,466 |
71,295 |
74,120 |
Ore Mined |
kt |
3,030 |
1,583 |
473 |
7,920 |
13,006 |
14,109 |
|
kt |
3,357 |
4,101 |
470 |
5,751 |
13,679 |
13,721 |
|
g/t |
1.72 |
1.16 |
3.48 |
0.90 |
1.27 |
1.27 |
Gold Recovery |
% |
81.3 |
90.0 |
93.5 |
82.5 |
85.6 |
83.5 |
Capital Expenditures |
|
|
|
|
|
|
|
Sustaining |
US$M |
45.6 |
11.1 |
3.5 |
32.7 |
92.9 |
81.0 |
Pre-strip & Capitalized Mining |
US$M |
99.2 |
4.3 |
22.7 |
45.5 |
171.7 |
117.7 |
Growth |
US$M |
43.4 |
9.6 |
8.2 |
1.9 |
63.1 |
58.7 |
Exploration |
US$M |
6.2 |
2.5 |
13.2 |
2.9 |
24.8 |
22.1 |
Total Capital Expenditures |
US$M |
194.4 |
27.5 |
47.6 |
83.0 |
352.5 |
279.3 |
1 |
The Average Copper Price Received calculated includes mark-to-market revaluations on unfinalized shipments as well as final adjustments on prior period shipments per accounting requirements |
2 |
Site AISC are exclusive of corporate G&A expenses but include share based remuneration paid to eligible site employees, Consolidated AISC is inclusive of corporate G&A expenses which includes share based remuneration paid to eligible non-operations corporate employees. Cash Costs and AISC are reported on ounces sold and net of by-product credit basis. AISC is a non-IFRS measure. Refer to "Non-IFRS Financial Information" section of the MD&A. |
Notes: |
|
• |
Consolidated capital excludes rehabilitation and closure costs at Reefton and Junction Reefs plus corporate capital projects not related to a specific operating region; these totalled |
Table 2 – Financial Summary
(in US$M, except per share amounts) |
Q4 2023 |
Q3 2023 |
Q4 2022 |
2023 |
2022 |
Revenue |
267.3 |
214.1 |
238.4 |
1,026.3 |
967.4 |
Cost of sales, excluding depreciation and amortization |
(145.9) |
(113.3) |
(129.0) |
(498.8) |
(506.4) |
General and administration |
(10.3) |
(16.9) |
(13.8) |
(64.3) |
(51.7) |
Indirect taxes 1 |
(8.2) |
(7.4) |
(3.5) |
(26.3) |
(15.2) |
Additional Government Share 2 |
(6.4) |
(13.9) |
— |
(20.3) |
— |
Foreign currency exchange gain/(loss) |
3.0 |
(1.8) |
5.2 |
(3.5) |
(25.1) |
Other (expense)/income |
(4.8) |
2.2 |
0.9 |
(4.1) |
2.2 |
Adjusted EBITDA 3 |
94.6 |
63.0 |
98.2 |
410.1 |
371.0 |
Depreciation and amortization |
(71.8) |
(51.7) |
(52.5) |
(228.8) |
(201.2) |
Net interest expense and finance costs |
(6.3) |
(4.4) |
(4.8) |
(21.0) |
(9.9) |
Adjusted Net Profit before income tax |
16.5 |
6.9 |
40.9 |
160.3 |
159.9 |
Income tax (expense)/benefit on earnings |
(6.9) |
(8.6) |
(11.0) |
(44.9) |
(34.0) |
Adjusted Net Profit 3 |
9.6 |
(1.7) |
29.9 |
115.4 |
125.9 |
Unrealized foreign exchange losses/(gains) on the Facility |
3.9 |
(1.6) |
11.1 |
1.7 |
10.9 |
Write-off of receivables/exploration/property expenditure/investment 4 |
(38.3) |
(2.2) |
— |
(39.9) |
(4.4) |
Tax benefit on write-down of indirect tax receivable |
9.6 |
— |
— |
9.6 |
— |
Restructuring expense 5 |
(3.7) |
— |
— |
(3.7) |
— |
Net (Loss)/Profit |
(18.9) |
(5.5) |
41.0 |
83.1 |
132.6 |
(Loss)/Earnings per share - basic |
|
|
|
|
|
Adjusted Earnings per share 3 |
|
|
|
|
|
(Loss)/Earnings per share - diluted |
|
|
|
|
|
1 |
Represents production-based taxes in |
2 |
The Additional Government Share has been recognized in accordance with FTAA under which the Company's Didipio mine in |
3 |
Adjusted EBITDA, Adjusted Net Profit and Adjusted Earnings per share are non-IFRS measures. Refer to "Non-IFRS Financial Information" section of the MD&A. |
4 |
As at |
5 |
Represents costs related to the relocation of the corporate office from |
Table 3 - Cash flow Summary
(in US$M) |
Q4 2023 |
Q3 2023 |
Q4 2022 |
2023 |
2022 |
Cash flows from Operating Activities |
94.8 |
62.5 |
100.2 |
384.2 |
368.7 |
Cash flows used in Investing Activities |
(78.7) |
(92.1) |
(90.2) |
(341.8) |
(280.8) |
Cash flows used in Financing Activities |
(13.9) |
(22.7) |
(57.3) |
(57.8) |
(130.2) |
Free Cash Flows 1 |
16.1 |
(29.6) |
2.7 |
42.4 |
57.7 |
Note: Free Cash Flow in 2023 has been calculated as Cash flows from Operating Activities, less Cash flows used in Investing Activities. In the prior year, Free Cash Flow was calculated as Cash flows from Operating Activities, less Cash flows used in Investing Activities less finance lease principal payments which are reported as part of cash flow used in financing activities in 2022. |
Operations
The Company produced 129,830 ounces of gold and 3,848 tonnes of copper in the fourth quarter of 2023. Fourth quarter gold production was 31% higher than the previous quarter and 7% higher than the corresponding quarter in 2022. The quarter-on-quarter increase was driven by higher production at all operations during the quarter and includes first production from the Horseshoe Underground at Haile. The Company produced 477,313 ounces of gold and 14,172 tonnes of copper in 2023, which was broadly in line with production in 2022.
The Company recorded a fourth quarter AISC1 of
Haile produced 37,566 ounces of gold in the fourth quarter. The 62% increase compared to the previous quarter was primarily due to the addition of first production from the Horseshoe Underground. Haile's fourth quarter AISC1 was
During the third quarter, first development ore was mined and stockpiled from the Horseshoe Underground mine at Haile. First production ore was mined in mid-October and three stopes were mined as planned during the fourth quarter of 2023.
Didipio produced 42,807 ounces of gold and 3,848 tonnes of copper in the fourth quarter. The 40% increase in gold production compared to the previous quarter was mainly due to higher grade breccia stopes being mined, which was facilitated by completion of the crown pillar strengthening project. Copper production increased by 13% quarter-on-quarter. Didipio's fourth quarter AISC1 was
Macraes produced 36,117 ounces of gold in the fourth quarter. The 4% increase compared to the previous quarter resulted from record mill throughput achieved during the fourth quarter of 2023. Macraes fourth quarter AISC1 was
Waihi produced 13,340 ounces of gold for the fourth quarter. The 23% increase compared to the previous quarter was driven by a 24% increase in feed grade, as mining of the remnant areas shifted into higher grade zones. Waihi's fourth quarter AISC1 was
Financial
The Company recorded fourth quarter consolidated revenue of
The Company achieved record annual consolidated revenue of
Fourth quarter Adjusted EBITDA1 was
Annual consolidated Adjusted EBITDA1 was
Fourth quarter net loss was
Fourth quarter Adjusted Net Profit1 was
Annual Adjusted Net Profit1 was
Fourth quarter cash flows from operating activities were
Annual cash flows from operating activities totaled
Fourth quarter investing cash flow totaled
Annual investing cash flow of
Annual Free Cash Flow 1 was
Following the completion of refinancing in December, as at
The Company's Net Debt1 position, inclusive of lease liabilities, decreased to
Outlook
The Company's 2024 full year guidance is presented in the tables below.
Production & Costs2 |
|
Haile |
Didipio |
Waihi |
Macraes |
Consolidated |
||||||||||
Gold Production |
koz |
195 |
- |
225 |
120 |
- |
135 |
55 |
- |
75 |
120 |
- |
135 |
510 |
- |
570 |
Copper Production |
kt |
|
- |
|
12 |
- |
14 |
|
- |
|
|
- |
|
12 |
- |
14 |
Cash Costs 1,3 |
$/oz |
900 |
- |
1,000 |
550 |
- |
650 |
1,050 |
- |
1,200 |
1,100 |
- |
1,200 |
875 |
- |
975 |
AISC 1,3 |
$/oz |
1,530 |
- |
1,630 |
750 |
- |
850 |
1,350 |
- |
1,500 |
1,775 |
- |
1,875 |
1,475 |
- |
1,600 |
Capital Investments2,4 |
Haile |
Didipio |
Waihi |
Macraes |
Consolidated 5 |
Included in AISC 1 |
||||||||||||
Pre-strip and |
75 |
- |
85 |
5 |
- |
8 |
8 |
- |
12 |
55 |
- |
65 |
140 |
- |
160 |
140 |
- |
160 |
Sustaining |
50 |
- |
55 |
20 |
- |
25 |
10 |
- |
15 |
30 |
- |
35 |
105 |
- |
115 |
105 |
- |
115 |
Growth |
20 |
- |
25 |
10 |
- |
15 |
5 |
- |
10 |
7 |
- |
11 |
50 |
- |
65 |
— |
- |
— |
Exploration |
7 |
- |
9 |
3 |
- |
5 |
15 |
- |
20 |
1 |
- |
2 |
25 |
- |
35 |
3 |
- |
6 |
Total Investments |
155 |
- |
175 |
45 |
- |
55 |
45 |
- |
55 |
90 |
- |
110 |
320 |
- |
370 |
255 |
- |
295 |
2 |
Assumes a |
3 |
Includes by-product credits based on copper price of |
4 |
Excludes capital leases. |
5 |
Includes corporate capital and excludes Reefton and Junction Reefs rehabilitation costs. |
Consolidated gold production in 2024 is expected to be higher than 2023 driven by increases at Haile and Waihi. The first quarter is expected to be the weakest of the year, with approximately 55% to 60% of consolidated gold production weighted to the second half of the year. The production profile is driven by sequencing of open pit mining at both Haile and Macraes, and the ramp-up of the Horseshoe Underground at Haile. Consolidated AISC1 profile follows the production trend and is expected to peak in the first quarter, and then come down significantly quarter over quarter in 2024.
In 2024, Haile is expected to produce 195,000 to 225,000 ounces of gold at an AISC1 of between
At Haile, total capital investment is expected to range between $155 million and $175 million. Pre-stripping costs have been accelerated in 2024 to optimize the longer-term mine plan at Haile which is expected to benefit 2025 and 2026. Capitalized mining costs relate to continued development in the Horseshoe Underground mine. Sustaining capital includes a new lift and additional maintenance on the TSF, construction of West PAG Phase 2 and 3, which has been accelerated to reduce overall costs and improve mine flexibility, and on-going planned component replacement of the mobile fleet.
Growth capital is expected to be between $20 million and $25 million in 2024 and relates to ongoing decline development at Horseshoe Underground and an upgrade to electricity infrastructure. Exploration expenditure at Haile is expected to range between $7 million and $9 million and will focus on resource definition and conversion of both the Horseshoe Underground and Ledbetter 4, in addition to several early-stage targets.
In 2024, Didipio is expected to produce 120,000 to 135,000 ounces of gold and 12,000 to 14,000 tonnes of copper at an AISC1 between
At Didipio, total capital investment is expected to range between $45 million and $55 million. Sustaining capital for the year includes underground development, ongoing TSF construction, and purchases of new underground equipment in support of the underground optimization efforts. Exploration expenditure at Didipio in 2024 will focus on extension and conversion drilling in the underground as well as planned regional exploration activities.
In 2024, Macraes is expected to produce 120,000 to 135,000 ounces of gold at an AISC1 of between
At Macraes, total capital investment is expected to range between $90 million and $110 million. Pre-strip and capitalized mining costs are associated with
In 2024, Waihi is expected to produce 55,000 to 75,000 ounces of gold, at an AISC1 of between
At Waihi, total capital investment is expected to range between $45 million and $55 million. Sustaining capital for the year primarily includes underground development and TSF expansion. The largest component of the investment at Waihi is exploration expenditure which is expected to be between $15 million and $20 million in 2024. Ongoing exploration will continue to focus on resource growth, resource definition and conversion drilling of the Martha Underground and Wharekirauponga, with exploration spend expected to be approximately evenly distributed between operation and project. Growth capital is expected to range between $5 million and $10 million and includes study costs related to the
Three Year Outlook
The company's three year outlook is presented in the tables below.
Production & Costs 2 |
|
2024 |
2025 |
2026 |
||||||
Gold Production |
koz |
510 |
- |
570 |
540 |
- |
600 |
620 |
- |
680 |
Copper Production |
kt |
12 |
- |
14 |
12 |
- |
14 |
12 |
- |
14 |
AISC 1,3 |
$/oz |
1,475 |
- |
1,600 |
1,425 |
- |
1,575 |
1,250 |
- |
1,400 |
Capital Investments 2,4 |
|
2024 |
2025 |
2026 |
||||||
Pre-strip and |
US$M |
140 |
- |
160 |
140 |
- |
160 |
100 |
- |
120 |
Sustaining |
US$M |
105 |
- |
115 |
130 |
- |
150 |
80 |
- |
100 |
Growth |
US$M |
50 |
- |
65 |
20 |
- |
40 |
20 |
- |
40 |
Exploration |
US$M |
25 |
- |
35 |
15 |
- |
25 |
10 |
- |
20 |
Total Investments |
US$M |
320 |
- |
370 |
300 |
- |
350 |
210 |
- |
260 |
2 |
Assumes a |
3 |
AISC guidance based on copper price of |
4 |
Excludes capital leases and includes corporate capital and excludes Reefton and Junction Reefs rehabilitation costs. |
The Company expects to deliver production growth of at least 30% from 2023 through 2026 at a declining AISC1.
On a consolidated basis, the Company expects to produce 510,000 to 570,000 ounces of gold in 2024, increasing to 540,000 to 600,000 ounces in 2025 and 620,000 to 680,000 ounces in 2026. Consolidated AISC1 is expected to be
This three-year outlook reflects an increasing production trend at both Haile and Macraes over time, with a steady contribution from Didipio. Compared with the prior year outlook for this period, there has been a moderation of Waihi's production outlook to reflect the inherent risk with remnant mining. Mine plan optimization at Haile related to the Ledbetter pit, has shifted a portion of previously expected 2024 and 2025 gold production at Haile into 2026. The 3-year outlook also now excludes the
1 Refer to "Non-IFRS Financial Information" in the MD&A
Dividend
The Company is pleased to announce a semi-annual dividend payment of
Declaration of Dividend |
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Common shares trade on an ex-dividend basis (TSX) |
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Record Date |
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Dividend Payment Date |
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Dividends are payable in
Conference Call
Senior management will host a conference call / webcast to discuss the results on
Webcast Details:
To register, please copy and paste the link into your browser: https://app.webinar.net/DomxryArMVk
Conference Call Details:
If you are unable to attend the call, a recording will be made available on the Company's website.
About OceanaGold
Cautionary Statement for Public Release
Certain information contained in this public release may be deemed "forward-looking" within the meaning of applicable securities laws. Forward-looking statements and information relate to future performance and reflect the Company's expectations regarding the generation of free cash flow, execution of business strategy, future growth, future production, estimated costs, results of operations, business prospects and opportunities of
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