OceanaGold bullish on N. Vizcaya gold, copper project

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AUSTRALIAN miner OceanaGold Corp. on Friday reported “positive outcomes” from an optimization study on its Didipio copper and gold project in Nueva Vizcaya, which would help increase metal production and improve operational efficiency.

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Mick Wilkes, OceanaGold managing director and chief executive, said the optimization study has helped them identify significant value from the Didipio Mine “that will be unlocked through increased metal production; improved operating cash flows; as well as a significant reduction in waste mined, combined with earlier access to higher grade underground ore.”

The Didipio Mine started commercial production in April 2013 and has a current mine life to 2029. For 2014, OceanaGold expects to produce 21,000 to 24,000 tons of copper from the Didipio Mine.

Based on the results of the study, Wilkes said that the underground portion of the Didipio operation would be brought forward by one year with development expected to commence in the first quarter of 2015, subject to regulatory approvals.

Access to high-grade ore will also be brought forward by two years with the first ore delivered for processing in the third quarter of 2017.

“Commencing the underground operation earlier than originally planned enables faster access to the high grade ore that resides in the underground reserves of the ore body. It also allows us to carry out further exploration at depth where we believe high grade mineralization continues below the extent of the current drilling,” Wilkes said.

The redesigned underground work will include two underground mining domains that will increase the mine productivity rate to 1.6 million tons per annum (Mtpa) from 1.2 Mtpa over a longer underground mine life.

“As a result of the company’s increased understanding and confidence in the geotechnical attributes of the mine, the open pit has been redesigned with a reduced Stage 6 pit shell resulting in the elimination of nearly 70 million tons of waste over the life of the mine,” he added.

The OceanaGold’s board has already endorsed the new study, including the earlier than scheduled commencement of the underground mine development, resource definition drilling, and redesigned open pit.

“The company will now seek the required approvals to commence the development of surface facilities, including the portal and ventilation infrastructure, in the first quarter of 2015,” Wilkes said.

Under the optimized underground design, the pre-production capital cost is now estimated to be approximately $110 million over a three-year period (2015-2017), and sustaining capital expenditure over the life of the underground mine is expected to average $7 to $8 million per annum.

“Over the coming months, the company will invest in additional resource definition drilling for resource conversion and to further prove out the ore body,” Wilkes added.

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