OCEANAGOLD Corp. (OGC) said it expects gold production at its Didipio mine in Kasibu Town, Nueva Vizcaya to increase by around 100,000 ounces to 120,000 ounces in 2015 and its copper production to rise by some 21,000 tons to 23,000 tons.
In its 2015 Production and Cost Guidance released on Tuesday, OGC said slightly higher output is expected for the consolidated New Zealand operations with a production range of 195,000 ounces to 215,000 ounces of gold.
For its cost guidance for next year, OGC said it expects consolidated cash costs to range from $450 to $530 per ounce net of by-product credits, and consolidated all-in sustaining costs (AISC) to range from $770 to $840 per ounce net of by-product credits.
Mick Wilkes, OGC managing director and CEO, said that after another year of strong production performance in 2014, they expect to continue delivering significant value to their shareholders in 2015 “through increased gold production from our high quality Didipio operation, and from improved margins in New Zealand where the zero-cost collar hedges have ensured a meaningful cash margin despite the current weak gold price.”
Wilkes said that for 2015, the company estimates total capital and exploration expenditure of about $100 million across its operations while in New Zealand, capital expenditure is forecast at $33 million, much lower than in previous years.
He said the reduction is a direct result of lower sustaining and capitalized mining costs at Macraes, and at Reefton where the operation will transition into care and maintenance by the end of the year.
But at Didipio, Wilkes said, capital expenditure is expected to be approximately $63 million including $23 million for the underground development and $10 million for the connection to the power grid.
He also said that of the $100 million total capital budget, $62 million is classified as sustaining capital and is included in the AISC estimates.
Meanwhile, OGC said that the total expenditure for exploration activities in the Philippines is forecast to be $4 million, and in the event that additional exploration permits are granted in the Philippines these activities would increase.
“2015 will be another significant year for the company as we commence development of the underground decline at Didipio which will enable access to the very high grade core of the ore body earlier in the mine plan,” Wilkes said.
Meanwhile, OGC said that the power grid connection at Didipio will further reduce their operating costs by the end of the year.
“In this volatile and persistently challenging environment for gold producers, OceanaGold is uniquely positioned as one of the lowest cost producers globally underpinning strong free cash flows from our business,” Wilkes said.
He said: “Our team is committed to executing on our clear and defined strategy, delivering positive results to our shareholders and stakeholders in a safe and sustainable manner and we will continue to evaluate value enhancing opportunities to complement our current asset mix.”
OGC is a significant multinational gold and copper producer with over 24 years of operating sustainably in New Zealand and more recently in the Philippines. Its flagship operation is the Didipio Mine, which commenced commercial production on April 1, 2013 and has a current mine life to 2030.