OceanaGold anticipates gold production wave

Early earthworks at the Golden Point underground mine. Image: OceanaGold.

OceanaGold is expecting its gold production to increase by 20 per cent this year to between 340,000 to 380,000 ounces.

The guidance increase comes off the back of the company producing 99,155 gold ounces in the December 2020 quarter, marking a 57 per cent increase compared with the previous period.

This was due to production resuming at the Waihi operation and higher gold sales from the Haile gold mine in South Carolina, United States and Macraes operation in New Zealand.

According to OceanaGold president and chief executive officer Michael Holmes, the company is expecting a strong growth pipeline with its New Zealand gold assets.

The Martha underground project at the Waihi operation has already entered production, while Golden Point Underground at the Macraes operation and the Haile gold mine are expected to commence production later this year.

“These three projects alone are expected to deliver more than an 75 per cent increase in production relative to 2020 at decreasing costs and increasing margins,” Holmes said.

OceanaGold is expecting a 12 per cent reduction to its all in sustaining cost (AISC) for gold, which is expected to range between $1050 and $1200 per ounce of gold.

The Macraes operation is set to produce between 155,000 and 165,000 ounces of gold in 2021, and is expected to remain consistent through each quarter, while the Haile gold mine is slated to produce 150,000 and 170,000 ounces of gold.

Pit expansion, pre-stripping and portal development at the Macraes operation began in the fourth quarter of 2020 and is expected to extend the site’s mine life to 2028.

OceanaGold will focus on critical tailing storage facilities, water treatment and waste cell infrastructure at the Haile gold mine in 2021.

An additional $115 million to $125 million will be invested in growth projects for OceanaGold in 2021, with around two thirds of the funding directed to developing Haile’s Horseshoe Underground Mine.

After returning to production in the December quarter, the Waihi operation will produce 35,000 to 45,000 ounces in 2021.

The company’s Wharekirauponga project at Waihi is targeting first production in 2026, with the possibility to be brought forward.

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