OceanaGold to restart Didipio mine earlier than expected

OceanaGold (TSX: OGC; ASX: OGC) announced today that restart activities at its Didipio gold and copper mine in the Philippines were advancing ahead of plan, and said it expects to have 65% of its total workforce in place by the end of September and about 90% by the end of the year.  

The operation has been halted for over two years due to a dispute with a provincial government over the company’s license to operate.  

OceanaGold renewed Didipio’s permit in July, securing another 25 years of operations. It had kicked off the renewal process in 2018, but the contract expired in June 2019 and OceanaGold kept the mine open under a temporary license. A blockade backed by the local government ultimately forced the Brisbane-based miner to suspend operations a few weeks later. It also laid off hundreds of workers. 

During August, OceanaGold successfully exported and sold the remaining gold doré from Didipio, while also starting the transport of gold-copper concentrate inventory stored on site. 

As of September 10, the company had delivered about 6,000 dry metric tonnes of the total concentrate ahead of shipping.  

It expects to transport roughly 80% of the concentrate to port by the end of the third quarter, with the entire load moved by mid-October. 

Didipio, which began production in 2013 and is located 270 km north of Manila, has a measured and indicated resource of 1.3 million ounces of gold and 160,000 tonnes of copper. 

Once back in full underground production, the mine is slated to generate about 10,000 ounces of gold and 1,000 tonnes of copper per month. 

The mine is a major direct and indirect employer in the provinces of Quirino and Nueva Vizcaya, as well as a significant contributor of socio-economic benefits for the local and national economies. 

The company forecasts that sales from Didipio in 2021 will range between 23,000 and 28,000 oz. gold and between 3,500 and 4,500 tonnes of copper. All-in sustaining costs at Didipio are expected to range between US$300 and US$400 per oz. sold with cash costs of US$200 to US$300 per oz. sold.

In New Zealand, 2021 production has been affected by a 15-day country-wide Covid-19 lockdown. The company has revised its 2021 production guidance for Macraes to 135,000 to 145,000 oz. at AISCs of US$1,300 to US$1,350 per oz. sold. At Waihi, OceanaGold says production is tracking toward the lower end of its guidance range of 35,000 to 45,000 oz. gold at AISCs of US$1,300 to US$1,350 per oz. sold.  At Haile, the company expects production will come in at between 160,000 and 170,000 oz. gold at AISCs of US$1,100 to US$1,150 per oz. sold.

On a consolidated basis including Didipio, the company continues to forecast full-year production of between 350,000 and 370,000 oz. gold at AISCs of US$1,200 to US$1,250 per oz. sold.