OceanaGold gets initial approval for Philippine unit’s IPO

OceanaGold (TSX: OGC; US-OTC: OCANF) said on Monday that it has obtained preliminary regulatory approval for an initial public offering (IPO) of its Philippines-based subsidiary, through which it holds the Didipio mine.

In February, the Vancouver and Melbourne-based miner made the filing for the IPO of OceanaGold Philippines, with 20% of its equity capital being offered to the public. At the maximum offering price, the offering would have a value of 7.9 billion Philippine pesos (US$138.9 million).

Proceeds from the offering, as OceanaGold had disclosed, will be applied towards debt repayment. As of Dec. 31, 2023, the company had drawn bank debt of US$135 million. 

CEO Gerard Bond said at the time that the IPO is aimed to tap new Filipino and international shareholders through “robust cash flow and dividend payments” from its gold and copper mine located about 270 km northeast of Manila.

The Didipio mine started commercial operations in 2013, initially as an open pit operation and then transitioned towards underground mining. A dispute with the local government left the mine idled between 2019-2021, before mining was allowed to resume again under a renewed contract.

As of year-end 2023, the mine had 1.1 million oz. of gold and 140,000 tonnes of copper in total open-pit and underground reserves (38.6 million tonnes grading 0.88 grams gold per tonne and 0.35% copper), which will be mined over its remaining life of 10 years.

OceanaGold recently completed underground optimization work for Didipio that could result in increased mining rates as well as potential resource extensions below the current reserve limit. However, it said that further drilling will be required to assess whether the optimization will be realized.

For this year, around 28,000 metres of resource conversion and expansion drilling is planned for Didipio underground, focusing on the Napartan target located 9 km northwest of the mine and another pegmatite target similar to the Balut Dyke mined at Didipio.

Didipio Q1 results

Also on Monday, OceanaGold provided its first quarter 2024 operating results for the Didipio mine.

Production for the three-month period was 26,312 oz. of gold and 3,015 tonnes of copper, which is in-line with its full-year plan and 2024 guidance. Metal sales for the quarter totalled 31,863 oz. of gold and 3,180 tonnes of copper.

Didipio remains on track to deliver its 2024 guidance, said the company, with the mine expected to produce between 120,000 and 135,000 oz. of gold and 12,000 to 14,000 tonnes of copper, at an all-in sustaining cost of between US$750 and US$850 per ounce.

OceanaGold shares traded at $3.30 apiece on Monday morning, valuing the company at $2.3 billion. Its shares traded in a 52-week range of $2.08 and $3.50.