Coeur Mining Inc. press release

OceanaGold Reports Third Quarter 2021 Financial Results

2021-10-28

NYSE - New York Stock Exchange · Gold · Silver · Zinc · Lead · United States · Corporate Finance

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(All financial figures in US Dollars unless otherwise stated)

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BRISBANE, Australia , Oct. 28, 2021 /CNW/ - OceanaGold Corporation (TSX: OGC) (ASX: OGC) (the "Company") reported its financial and operational results for the quarter ended September 30, 2021 . Details of the consolidated financial statements and the Management Discussion and Analysis ("MD&A") are available on the Company's website at www.oceanagold.com

Highlights

Didipio's Financial or Technical Assistance Agreement ("FTAA") renewed for 25 years. Total Recordable Injury Frequency Rate ("TRIFR") increased from 3.7 to 3.9 per million hours worked. Year-to-date ('YTD') consolidated gold production of 256,216 ounces at All-In Sustaining Costs ("AISC") of $1,218 per ounce on gold sales of 276,226 ounces. Consolidated third quarter gold production of 79,177 ounces at AISC of $1,200 per ounce on gold sales of 97,445 ounces, including 19,151 ounces of gold sold at Didipio. YTD revenue of $536.1 million with adjusted Earnings before Interest, Depreciation and Amortisation ("EBITDA") of $259.2 million and adjusted net profit of $111.7 million or $0.16 per share Third quarter revenue of $204.6 million with adjusted EBITDA of $97.3 million and adjusted net profit of $53.0 million or $0.07 per share. Total immediate available liquidity of $143.2 million , including $113.2 million in cash and $30.0 million in available undrawn credit facilities as at September 30, 2021 . Successfully completed transport of Didipio gold-copper concentrate in inventory early in the fourth quarter. Commenced underground mining at Didipio, one month ahead of schedule and delivery of underground ore underway. Paul Benson appointed Chairman of the Board effective from 1 October 2021 . Full year 2021 production guidance of 350,000 to 370,000 gold ounces at AISC of $1,200 to $1,250 per ounce sold reaffirmed.

Scott Sullivan , Chief Operating Officer & Acting CEO of OceanaGold said, "I am very pleased with the financial performance of the business driven by strong EBITDA and profits. The main drivers of this financial performance relate to a strong quarter at Haile and Didipio, where we are pleased to announce the completion of gold-copper

concentrate transportation. Despite this strong performance, we have much work ahead of us to progress the safe restart of Didipio processing and mining operations, complete the Haile Technical Review and get the New Zealand operations back on-track while continuing to manage the ongoing risks associated with the pandemic."

"The Didipio restart activities continue to exceed our expectations with recruiting and training activities progressing to plan despite the ongoing risks associated with COVID-19. We are pleased to announce the resumption of underground mining and the delivery of underground ore to the ROM pad early in October, one month ahead of schedule. Stope development is expected to commence in the coming weeks and we will continue to ramp-up underground operations to full mining production rates over the course of the next eight to nine months. Processing activities are tracking ahead of plan with recommissioning of the primary crusher completed in the third quarter. We expect milling at Didipio to recommence in mid-November with ore sourced primarily from stockpiles and supplemented progressively with higher-grade underground ore."

"At Haile, the operation achieved a better-than-expected quarter of production with costs in-line with expectations. Although the fourth quarter is expected to deliver softer production from mining and processing of lower grades, we are well positioned to finish the year strongly. We are pleased to increase Haile's 2021 production range to 175,000 to 180,000 ounces of gold reflecting the better-than-expected operating performance over the first nine months of the year. The Haile Technical Review continues to advance well, and we are expecting to complete a new mine plan within the first half of 2022."

"In New Zealand , both operations were adversely impacted by the two-week nationwide lockdown. At Waihi, the impact related to the shutdown and subsequent regional lockdowns was greater than first expected with carry over impacts in our supply chain beyond the two-week closure. Additionally, recent updates to the resource models impact material planned for the fourth quarter. As a result, Waihi is now expected to deliver 30,000 to 35,000 ounces of gold for the full year. Despite the challenges Waihi has had recently, ramp-up of Martha Underground mining rates continue to advance and the Company expects a stronger fourth quarter and 2022. At Macraes, we are focused on delivering a strong fourth quarter of production to achieve the narrowed guidance range of 138,000 to 143,000 ounces."

"Looking ahead, the Company reaffirms its full year guidance range of 350,000 and 370,000 ounces of gold at an AISC of $1,200 to $1,250 per ounce sold."

Table 1 – Production and Cost Results Summary

| Quarter ended 30 Sep 2021 | | Haile | Didipio | Waihi | Macraes | Consolidated | | | Q3 2021 | Q3 2020 | | | | | | | | Production, Sales & Costs | | | | | | | | | Gold Produced | koz | 45.9 | - | 7.5 | 25.7 | 79.2 | 63.1 | | Gold Sales | koz | 44.0 | 19.2 | 8.3 | 26.0 | 97.4 | 60.8 | | Average Gold Price | US$/oz | 1,789 | 1,746 | 1,766 | 1,857 | 1,797 | 1,601 (1) | | Copper Produced | kt | - | - | - | - | - | - | | Copper Sales | kt | - | 3.4 | - | - | 3.4 | - | | Average Copper Price | US$/lb | - | 4.19 | - | - | 4.19 | - | | Cash Costs | US$/oz | 581 | (47) | 1,395 | 990 | 636 | 1,015 | | Site AISC (2) | US$/oz | 1,208 | (47) | 2,072 | 1,573 | 1,200 | 1,695 | | Operating Physicals | | | | | | | | | Material Mined | kt | 11,306 | 0.6 | 166.2 | 10,550 | 22,023 | 22,489 | | Waste Mined | kt | 10,598 | - | 99.6 | 9,731 | 20,429 | 20,050 | | Ore Mined | kt | 708 | 0.6 | 66.6 | 819 | 1,595 | 2,438 | | Mill Feed | kt | 792 | - | 81.1 | 1,377 | 2,250 | 2,248 | | Mill Feed Grade | g/t | 2.10 | - | 3.19 | 0.73 | 1.30 | 1.01 | | Gold Recovery | % | 85.6 | - | 90.8 | 79.6 | 82.1 | 82.5 | | Capital Expenditures | | | | | | | | | General Operations | US$m | 3.4 | 0.5 | - | 2.6 | 6.5 | 7.7 | | Pre-strip & Capitalised Mining | US$m | 22.8 | - | 6.0 | 10.3 | 39.1 | 22.4 | | Growth | US$m | 28.4 | - | 6.6 | 3.4 | 39.9 (3) | 43.7 | | Exploration | US$m | 0.9 | - | 3.1 | 1.7 | 5.8 | 7.9 | | Total Capital Expenditures | US$m | 55.5 | 0.5 | 15.7 | 18.1 | 91.2 | 81.7 |

| (1) | Realised gains and losses on gold hedging are included in the consolidated average gold price. Realised gains and losses on gold hedging are not included in the site average gold prices. | | (2) | Site AISC are exclusive of Corporate general and administrative expenses and have been restated in prior periods; accordingly, Consolidated AISC is inclusive of Corporate general and administrative expenses. | | (3) | Capital expenditure is presented on an accruals basis and excludes third quarter rehabilitation and closure costs of $1.0 million at Reefton. Capital and exploration expenditure by location includes related regional greenfield exploration where applicable. Corporate capital projects not related to a specific operating region are excluded; these totaled $0.4 million in the third quarter. |

Table 2 – Financial Summary

|

Quarter ended 30 Sep 2021

(US$m) | Q3

30 Sep 2021 | Q2

30 Jun 2021 | Q3

30 Sep 2020 | YTD

30 Sep 2021 | YTD

30 Sep 2020 | | | Revenue | 204.6 | 182.6 | 97.9 | 536.1 | 331.9 | | | Cost of sales, excluding depreciation and amortization | (87.4) | (71.3) | (60.9) | (225.4) | (196.7) | | | General and administration – indirect taxes (2) | (4.1) | - | (1.0) | (4.2) | (3.1) | | | General and administration – idle capacity charges (1) | (16.0) | (5.5) | (10.4) | (27.4) | (26.7) | | | General and administration – other | (9.7) | (12.7) | (11.7) | (33.6) | (35.4) | | | Foreign currency exchange gain/(loss) | (0.9) | (1.0) | (0.8) | (5.3) | (6.3) | | | Other income/(expense) | 2.7 | (2.2) | 0.4 | 0.9 | 4.6 | | | EBITDA (excluding gain/(loss) on undesignated hedges and impairment charge) | 89.2 | 89.9 | 13.5 | 241.1 | 68.3 | | | Depreciation and amortization | (49.9) | (40.0) | (36.1) | (126.2) | (125.6) | | | Net interest expense and finance costs | (2.9) | (2.6) | (2.7) | (8.3) | (8.6) | | | Earnings/(loss) before income tax (excluding gain/(loss) on undesignated hedges and impairment charge) | 36.4 | 47.3 | (25.4) | 106.6 | (66.0) | | | Income tax benefit/(expense) on earnings | 8.5 | (15.8) | 0.5 | (13.0) | (1.2) | | | Earnings/(loss) after income tax and before gain/(loss) on undesignated hedges and impairment charge | 44.9 | 31.4 | (24.9) | 93.6 | (67.2) | | | Impairment charge | - | - | (80.0) | - | (80.0) | | | Write off exploration/property expenditure / investment (3) | - | - | (0.1) | (1.3) | (6.9) | | | Gain/(loss) on fair value of undesignated hedges | - | - | 11.4 | - | (0.3) | | | Tax (expense) / benefit on gain/loss on undesignated hedges | - | - | (3.2) | - | 0.1 | | | Net Profit/(loss) | 44.9 | 31.4 | (96.8) | 92.3 | (154.2) | | | Basic earnings/(loss) per share | $0.06 | $0.04 | $(0.16) | $0.13 | $(0.25) | | | Diluted earnings/(loss) per share | $0.06 | $0.04 | $(0.16) | $0.13 | $(0.25) | |

| (1) | The Company did not record any revenue or cost of sales from the Didipio mine during the fifteen months ended 30 June 2021. In addition, General and Administration – idle capacity charges reflect the non-production costs related to maintaining Didipio's operational readiness and related to the two-week shutdown of the New Zealand operations required under COVID-19 restrictions | | (2) | Represents production-based taxes in the Philippines, specifically excise tax, local business and property taxes. | | (3) | Represents write-off of projects due to formal withdrawal from the Highland, Spring Peak and Bravada joint venture activities. |

Table 3 – Cash Flow Summary

| Quarter ended 30 Sep 2021

(US$m) | Q3

30 Sep 2021 | Q2

30 Jun 2021 | Q3

30 Sep 2020 | YTD

30 Sep 2021 | YTD

30 Sep 2020 | | Cash flows from Operating Activities | 69.0 | 35.8 | 63.1 | 152.4 | 200.4 | | Cash flows used in Investing Activities | (83.2) | (80.9) | (78.4) | (236.0) | (163.1) | | Cash flows from / (used) in Financing Activities | 43.5 | (5.4) | (6.0) | 31.4 | 42.3 |

Operations

Consolidated gold production for the YTD 2021 was 256,216 ounces, including 79,177 ounces in the third quarter. YTD gold production increased 27% above the prior YTD driven by higher production from Haile partially offset by lower production at Macraes. Third quarter gold production decreased 16% due to softer production from the New Zealand operations, principally related to the two-week nationwide COVID-19 lockdown and lower production at Haile from lower grades as expected.

YTD and third quarter consolidated AISC were $1,218 per ounce and $1,200 per ounce on gold sales of 276,226 ounces and 97,445 ounces, respectively. AISC was flat quarter-on-quarter and YTD, attributable to higher gold sales that are largely offset by higher sustaining capital investments.

In the Philippines , the Government renewed the Didipio FTAA for an additional 25-years effective June 19, 2019 . The renewal in mid-July paved the way for the resumption of operations and commencement of restart activities including the recruitment and training of the workforce, delivery of equipment and supplies, the transportation and sale of gold and copper inventory (both doré and concentrate), process plant maintenance and recommissioning and underground inspections and upgrades.

The Didipio restart activities continue to advance well with recruitment tracking to plan. The Company expects 90% of the workforce to be in place by the end of the year subject to continued management of COVID-19. Process plant restart activities continue to progress ahead of expectations with recommissioning of the primary crusher completed prior to the end of the quarter, completion of upgrades to the Ball and SAG mills and delivery of supplies ahead of first ore feed in mid-November. Underground mine inspections were completed in the third quarter along with upgrades and delivery of new Sandvik equipment. In the third quarter, the Company began ore mining, one month ahead of schedule while stope development is expected in November. First underground ore was delivered successfully to the ROM pad at the end of the third quarter.

During the third quarter, the Company sold 19,151 gold ounces and 3,356 tonnes of copper from inventory on hand at Didipio. All gold-copper concentrate has been delivered successfully to the San Fernando port and the Company has received $38 million of cash as at the end of the third quarter. The Company expects to progressively receive all payments associated with the sale of gold-copper concentrate prior to the end of the year.

In the United States , Haile produced 147,491 ounces of gold YTD, including 45,910 ounces in the third quarter. Haile's YTD production was 67% higher than the corresponding period in 2020 due to increased head grade as expected and operational improvements. Third quarter production was slightly lower than the previous quarter; however, a positive reconciliation led to better than planned production for the quarter. Haile's YTD AISC was $1,028 per ounce and cash costs of $653 per ounce on gold sales of 148,529 ounces. Third quarter AISC and cash costs were $1,208 per ounce and $581 per ounce on gold sales of 44,013 ounces.

In New Zealand , Macraes delivered YTD gold production of 92,902 ounces, with lower-than-expected gold production of 25,720 ounces in the third quarter. YTD 2021 gold production was approximately 9% lower than YTD 2020 due to geotechnical challenges at Coronation North leading to reduced mining rates in higher grade ore zones and extended downtime related to planned and unplanned process plant maintenance leading to decreased throughputs. Third quarter production was 21% lower than in the second quarter mainly related to the two-week nationwide lockdown and subsequent slower than expected ramp-up of operations. Macraes' YTD AISC was $1,468 per ounce sold while third quarter AISC was $1,573 per ounce sold.

The Waihi operation produced 7,547 ounces of gold in the third quarter, and 15,823 ounces YTD. The YTD production was approximately 30% higher due to ongoing ramp-up of Martha Underground. Third quarter production increased quarter-on-quarter following the completion of plant upgrade works in the second quarter. The quarter-on-quarter increase was partially offset by the two-week nationwide lockdown and slower than expected subsequent ramp-up of operations. Waihi's YTD AISC was $1,589 per ounce while third quarter AISC was $2,072 per ounce sold.

Financial

YTD 2021 revenue was $536.1 million , a 62% increase over the corresponding period in 2020 related to higher sales from Haile and Waihi and sales related to Didipio following the renewal of the FTAA in mid-July and a higher average gold price received. Third quarter revenue of $204.6 million was 12% higher quarter-on-quarter related to Didipio gold and copper sales, partially offset by decreased sales from Haile and Macraes and lower average gold price received.

Adjusted EBITDA (excluding idle capacity costs related to Didipio carrying costs) for YTD 2021 was $259.2 million , reflecting a 173% increase year-on-year. Third quarter adjusted EBITDA was $97.3 million , 2% above the previous quarter in line with higher gold and copper sales.

YTD 2021 adjusted net profit was $111.7 million or $0.16 per share, compared with an adjusted loss of $40.5 million over YTD 2020 related to higher revenue from increased sales at Didipio and Haile and a higher average gold price received. Third quarter adjusted net profit was $53.0 million , or $0.07 per share, which was significantly above the comparative quarters.

Cash flows from operating activities were $152.4 million for the YTD including $69.0 million in the third quarter, which was 9% and 92% above the prior September and June quarters respectively. Relative to EBITDA, operating cash flow offset by physical settlements of the gold prepayment arrangement whereby 8,889 ounces valued at $17.1 million were delivered in the third quarter. A total of 40,000 ounces valued at $76.7 million were physically delivered for the YTD. The Company has no further physical deliveries due or other hedging arrangement in place.

Cash flows used in investing activities totalled $236.0 million in the YTD, which was 45% above the prior year driven by higher growth capital investments at Haile related to the expansion of waste storage facilities, the Golden Point Underground development at Macraes, and the ongoing development of Martha Underground at Waihi.

Fully diluted cash flow per share before working capital movements and exclusive of gold prepayments was $0.12 in the third quarter and $0.34 for the YTD.

During the third quarter the Company drew down $50 million of debt under its revolving credit facilities and established an additional short-term working capital facility of $30 million . As at September 30, 2021 the Company's revolving credit facilities remained drawn to $250 million with $30 million undrawn. At the end of the third quarter, the Company had available liquidity of $143.2 million including $113.2 million in cash. The Company's net debt position was $256.5 million , an increase from the previous quarter of $224.8 million as increased capital expenditures were partially offset by higher sales.

Consolidated capital expenditure in the third quarter of 2021 was $91.2 million , a slight decrease quarter-on-quarter, primarily lower growth capital invested partially offset by higher pre-stripping capital. YTD capital expenditures of $255.4 million increased 30% over the prior year, reflecting capital investments related to increased pre-stripping capital at Haile and Macraes, and growth capital associated with the Haile expansion, Golden Point Underground at Macraes and the ongoing development of Martha Underground at Waihi.

Third quarter capital expenditure of $55.5 million at Haile was primarily related to the ongoing expansion of mining operations, including construction of the third tailings storage facility wall lift and heavy earthworks related to the construction of potentially acid generating ("PAG") waste storage facilities. Pre-stripping capital at Haile is tracking higher than originally guided, reflecting a higher allocation of mining costs to capital expenditure than previously forecast. Haile pre-stripping capital for 2021 is now expected to range between $65 and $70 million . As this is a reclassification from cash costs, there is no change in total mining costs or AISC as a result.

Outlook

On a consolidated basis, the Company expects to achieve its full year gold production guidance of 350,000 to 370,000 ounces at an AISC of $1,200 to $1,250 per ounce sold and cash costs of $725 to $775 per ounce sold. The consolidated guidance reflects the changes to the Haile and Waihi guidance ranges and is inclusive of Didipio's fourth quarter guidance.

In the United States at Haile, the stronger than expected production YTD has a resulted in the Company increasing Haile's full year outlook, whereby production is expected to range between 175,000 and 180,000 ounces of gold compared to 160,000 and 170,000 ounces of gold previously guided. Haile's 2021 AISC guidance range remains unchanged at $1,100 to $1,150 per gold ounce sold and at a lower cash cost of $650 to $750 per ounce sold.

The Haile Technical Review continues to progress with a comprehensive review of mining and processing operations, costs, capital investments and water and waste management including open-pit/underground trade-off studies. This review is expected to reflect historical and forecast operational data and cost inputs and resequencing of mining activities, with an aim to maximise cash flows over life of mine while incorporating more effective capital allocation. The Company expects an updated mine plan in the first half of 2022, with ongoing implementation of operational changes and value realisation over the next 18 months.