Southern Cross Gold Consolidated Ltd. press release

OceanaGold Reports Fourth Quarter and Full Year 2023 Operating and Financial Results

2024-02-22

TSX - Toronto Stock Exchange · Australia

Canada NewsWire

(All financial figures in United States dollars unless otherwise stated)

VANCOUVER, BC , Feb. 21, 2024 /CNW/ - OceanaGold Corporation (TSX: OGC) (OTCQX: OCANF) ("OceanaGold" or the "Company") reported its operational and financial results for the three months and full year ended December 31, 2023. The consolidated financial statements and the Management Discussion and Analysis ("MD&A") are available at www.oceanagold.com .

Gerard Bond , President and CEO of OceanaGold, said "Strong fourth quarter gold production, driven by increased quarter-on-quarter performance at all four of our operations, allowed us to deliver our full year production guidance.

At Haile, the Horseshoe Underground mine increased its production of higher-grade ore feed and, with the underground mine ramping up to full capacity and with access to ore in Ledbetter open pit improving through the first half of 2024, we expect improved performance quarter on quarter from Haile over the coming year. Didipio had an exceptional fourth quarter, beating increased guidance for the year due to earlier access into higher grade areas of the mine. Both New Zealand sites rebounded with improved fourth quarter performance, with Macraes also achieving the higher end of its increased production guidance for the year.

2024 is a transformational year for OceanaGold as we begin to deliver production growth, both for 2024 and beyond. Our 3-year outlook remains robust with organic, near-mine production growth of at least 30% 1 through 2026 at a declining AISC per ounce, which in turn underpins OceanaGold's projected improvement in Free Cash Flow generation.

This exciting profile positions the Company to continue strengthening the balance sheet, which we expect to be further enhanced this year with the completion of the monetization of 20% of Didipio. We will also continue to explore and invest in growth options such as Palomino and Wharekirauponga, especially with the improved investment climate in New Zealand . All of this will be in service of increasing the value of OceanaGold and improving returns to shareholders."

| _ | | 1 Based on the mid-point of production guidance. See Q4 2023 MD&A for more information |

Highlights

Achieved 2023 Guidance, Safely and Responsibly

Produced 477,313 ounces of gold and 14,172 tonnes of copper , in-line with original 2023 guidance, including delivering the Horseshoe Underground mine at Haile into production, and exceeding original production guidance at Didipio and Macraes. All-In Sustaining Cost ("AISC") 1 of $1,587 per ounce , in-line with updated 2023 guidance and excluding 11,009 ounces of gold produced but not sold until early January 2024 . Record full year revenue of $1.0 billion , driven by strong sales at record average realized gold prices. Ended the year with Net Debt 1 of $170.1 million at a Leverage Ratio 1 of 0.41x , and refinanced the revolving credit facility (the "Facility") with extended maturity and improved terms. Released updated Reserves and Resources , including Indicated Resource growth to 1 million ounces of gold at 15.9 g/t at Wharekirauponga and initial Reserves of 380,000 ounces at 2.9 g/t at Palomino at Haile.

2024 Guidance and Three-Year Outlook

~13% 2 increase in 2024 gold production, with production guidance of 510,000 to 570,000 ounces and 12,000 to 14,000 tonnes of copper , driven by growth at Haile. Lower unit cost of gold produced in 2024, with 2024 AISC 1 guidance of $1,475 to $1,600 per ounce sold . AISC in the first quarter is expected to be higher than the fourth quarter of 2023, decreasing significantly throughout the year as open pit mining transitions into ore at Haile and Macraes throughout the year. Multi-year consolidated gold production growing by at least 30% 3 from 2023 to 2026 at a decreasing AISC 1 . Initial public offering of 20% of OceanaGold Philippines Inc., which holds Didipio , in mid-2024. Proceeds will be applied to reduce OceanaGold's debt, further strengthening the balance sheet. Declared a $0.01 per share semi-annual dividend in February 2024 , payable in April 2024 .

1 Refer to "Non-IFRS Financial Information" in the MD&A 2 Derived by the mid-point of 2024 gold production guidance relative to 2023 actual gold production 3 By the mid-point of 2026 guidance relative to 2023 actual gold production

Table 1 – Production and Cost Results Summary

| Quarter ended December 31, 2023 | | Haile | Didipio | Waihi | Macraes | Consolidated | | | | Q4 2023 | Q3 2023 | Q4 2022 | | | | | | | | Production, Sales & Costs | | | | | | | | | | Gold Produced | koz | 37.6 | 42.8 | 13.3 | 36.1 | 129.8 | 99.0 | 120.9 | | Gold Sales | koz | 29.6 | 39.7 | 13.1 | 36.3 | 118.8 | 97.9 | 118.7 | | Average Gold Price | US$/oz | 1,996 | 2,039 | 1,975 | 1,947 | 1,993 | 1,934 | 1,769 | | Copper Produced | kt | — | 3.8 | — | — | 3.8 | 3.4 | 3.5 | | Copper Sales | kt | — | 3.9 | — | — | 3.9 | 3.1 | 3.5 | | Average Copper Price 1 | US$/lb | — | 3.80 | — | — | 3.80 | 3.76 | 3.91 | | Cash Costs | US$/oz | 1,521 | 549 | 1,345 | 901 | 987 | 1,003 | 880 | | Site AISC 2 | US$/oz | 2,570 | 737 | 1,829 | 1,468 | 1,658 | 1,911 | 1,602 | | Operating Physicals | | | | | | | | | | Material Mined | kt | 7,253 | 448 | 265 | 12,819 | 20,785 | 19,741 | 23,283 | | Waste Mined | kt | 6,838 | 51 | 131 | 11,138 | 18,158 | 16,824 | 19,453 | | Ore Mined | kt | 415 | 397 | 134 | 1,681 | 2,627 | 2,917 | 3,830 | | Mill Feed | kt | 874 | 1,015 | 129 | 1,655 | 3,673 | 3,260 | 3,481 | | Mill Feed Grade | g/t | 1.62 | 1.43 | 3.44 | 0.82 | 1.27 | 1.12 | 1.28 | | Gold Recovery | % | 82.2 | 91.7 | 93.7 | 83.0 | 86.5 | 84.2 | 84.6 | | Capital Expenditures | | | | | | | | | | Sustaining | US$M | 8.5 | 5.9 | 1.2 | 6.5 | 22.2 | 23.5 | 31.8 | | Pre-strip & Capitalized Mining | US$M | 20.9 | 1.6 | 4.0 | 15.1 | 41.6 | 47.2 | 37.9 | | Growth | US$M | 4.5 | 4.5 | 2.0 | 0.6 | 13.0 | 19.5 | 17.2 | | Exploration | US$M | 1.6 | 1.0 | 4.0 | 0.6 | 7.2 | 7.0 | 5.6 | | Total Capital Expenditures | US$M | 35.5 | 13.0 | 11.2 | 22.8 | 84.0 | 97.2 | 92.5 |

| Year ended December 31, 2023 | | Haile | Didipio | Waihi | Macraes | Consolidated | | | 2023 | 2022 | | | | | | | | Production, Sales & Costs | | | | | | | | | Gold Produced | koz | 152.5 | 138.5 | 49.3 | 137.0 | 477.3 | 472.2 | | Gold Sales | koz | 146.2 | 135.7 | 48.9 | 137.1 | 467.9 | 469.0 | | Average Gold Price | US$/oz | 1,953 | 1,974 | 1,950 | 1,940 | 1,955 | 1,813 | | Copper Produced | kt | — | 14.2 | — | — | 14.2 | 14.4 | | Copper Sales | kt | — | 13.8 | — | — | 13.8 | 14.7 | | Average Copper Price 1 | US$/lb | — | 3.87 | — | — | 3.87 | 3.82 | | Cash Costs | US$/oz | 884 | 614 | 1,300 | 996 | 883 | 869 | | Site AISC 2 | US$/oz | 1,921 | 730 | 1,914 | 1,570 | 1,587 | 1,407 | | Operating Physicals | | | | | | | | | Material Mined | kt | 33,197 | 1,735 | 981 | 48,386 | 84,300 | 88,227 | | Waste Mined | kt | 30,168 | 152 | 509 | 40,466 | 71,295 | 74,120 | | Ore Mined | kt | 3,030 | 1,583 | 473 | 7,920 | 13,006 | 14,109 | | Mill Feed | kt | 3,357 | 4,101 | 470 | 5,751 | 13,679 | 13,721 | | Mill Feed Grade | g/t | 1.72 | 1.16 | 3.48 | 0.90 | 1.27 | 1.27 | | Gold Recovery | % | 81.3 | 90.0 | 93.5 | 82.5 | 85.6 | 83.5 | | Capital Expenditures | | | | | | | | | Sustaining | US$M | 45.6 | 11.1 | 3.5 | 32.7 | 92.9 | 81.0 | | Pre-strip & Capitalized Mining | US$M | 99.2 | 4.3 | 22.7 | 45.5 | 171.7 | 117.7 | | Growth | US$M | 43.4 | 9.6 | 8.2 | 1.9 | 63.1 | 58.7 | | Exploration | US$M | 6.2 | 2.5 | 13.2 | 2.9 | 24.8 | 22.1 | | Total Capital Expenditures | US$M | 194.4 | 27.5 | 47.6 | 83.0 | 352.5 | 279.3 |

| 1 | The Average Copper Price Received calculated includes mark-to-market revaluations on unfinalized shipments as well as final adjustments on prior period shipments per accounting requirements | | 2 | Site AISC are exclusive of corporate G&A expenses but include share based remuneration paid to eligible site employees, Consolidated AISC is inclusive of corporate G&A expenses which includes share based remuneration paid to eligible non-operations corporate employees. Cash Costs and AISC are reported on ounces sold and net of by-product credit basis. AISC is a non-IFRS measure. Refer to "Non-IFRS Financial Information" section of the MD&A. |

| Notes: | | | • | Consolidated capital excludes rehabilitation and closure costs at Reefton and Junction Reefs plus corporate capital projects not related to a specific operating region; these totalled $0.7 million and $0.3 million respectively in the fourth quarter. Capital and exploration expenditure by location excludes related regional greenfield exploration where applicable. |

Table 2 – Financial Summary

| (in US$M, except per share amounts) | Q4 2023 | Q3 2023 | Q4 2022 | 2023 | 2022 | | Revenue | 267.3 | 214.1 | 238.4 | 1,026.3 | 967.4 | | Cost of sales, excluding depreciation and amortization | (145.9) | (113.3) | (129.0) | (498.8) | (506.4) | | General and administration | (10.3) | (16.9) | (13.8) | (64.3) | (51.7) | | Indirect taxes 1 | (8.2) | (7.4) | (3.5) | (26.3) | (15.2) | | Additional Government Share 2 | (6.4) | (13.9) | — | (20.3) | — | | Foreign currency exchange gain/(loss) | 3.0 | (1.8) | 5.2 | (3.5) | (25.1) | | Other (expense)/income | (4.8) | 2.2 | 0.9 | (4.1) | 2.2 | | Adjusted EBITDA 3 | 94.6 | 63.0 | 98.2 | 410.1 | 371.0 | | Depreciation and amortization | (71.8) | (51.7) | (52.5) | (228.8) | (201.2) | | Net interest expense and finance costs | (6.3) | (4.4) | (4.8) | (21.0) | (9.9) | | Adjusted Net Profit before income tax | 16.5 | 6.9 | 40.9 | 160.3 | 159.9 | | Income tax (expense)/benefit on earnings | (6.9) | (8.6) | (11.0) | (44.9) | (34.0) | | Adjusted Net Profit 3 | 9.6 | (1.7) | 29.9 | 115.4 | 125.9 | | Unrealized foreign exchange losses/(gains) on the Facility | 3.9 | (1.6) | 11.1 | 1.7 | 10.9 | | Write-off of receivables/exploration/property expenditure/investment 4 | (38.3) | (2.2) | — | (39.9) | (4.4) | | Tax benefit on write-down of indirect tax receivable | 9.6 | — | — | 9.6 | — | | Restructuring expense 5 | (3.7) | — | — | (3.7) | — | | Net (Loss)/Profit | (18.9) | (5.5) | 41.0 | 83.1 | 132.6 | | (Loss)/Earnings per share - basic | $(0.03) | $(0.01) | $0.06 | $0.12 | $0.19 | | Adjusted Earnings per share 3 | $0.01 | $0.00 | $0.04 | $0.16 | $0.21 | | (Loss)/Earnings per share - diluted | $(0.03) | $(0.01) | $0.05 | $0.12 | $0.18 |

| 1 | Represents production-based taxes in the Philippines, specifically excise tax, local business and property taxes. | | 2 | The Additional Government Share has been recognized in accordance with FTAA under which the Company's Didipio mine in the Philippines operates. | | 3 | Adjusted EBITDA, Adjusted Net Profit and Adjusted Earnings per share are non-IFRS measures. Refer to "Non-IFRS Financial Information" section of the MD&A. | | 4 | As at December 31, 2023, there was a non-cash write-down of indirect tax receivables in the Philippines totalling $38.3 million. The loss was primarily driven by the non-cash write-down relating to historic tax receivables in the Philippines (relating to Excise Taxes and VAT). The Company had been seeking recovery of indirect taxes assessed between 2013 and 2019 which it believed were not due and payable at the time, pursuant to the FTAA. These recovery actions were in various stages of court proceedings. Given the lack of definitive progress, ongoing administrative costs incurred in respect of these recovery actions, and with the additional government share payments now current, the Company has elected to write down these tax receivables and has commenced the process of discontinuing legal proceedings in these matters. All these historic taxes paid have been included as part of the government share as at December 31, 2023. As these taxes have already been paid and considered as part of the Government share, this write down of the receivable will not result in a cash payment. Were these taxes recovered, it would have resulted in a cash refund to the Company and an associated credit to the Additional Government Share, also with no net cash flow impact to the Company. There were two write-offs in 2022 totalling $4.4 million related to exploration projects in New Zealand and the Sam's Creek investment. | | 5 | Represents costs related to the relocation of the corporate office from Australia to Canada. |

Table 3 - Cash flow Summary

| (in US$M) | Q4 2023 | Q3 2023 | Q4 2022 | 2023 | 2022 | | Cash flows from Operating Activities | 94.8 | 62.5 | 100.2 | 384.2 | 368.7 | | Cash flows used in Investing Activities | (78.7) | (92.1) | (90.2) | (341.8) | (280.8) | | Cash flows used in Financing Activities | (13.9) | (22.7) | (57.3) | (57.8) | (130.2) | | Free Cash Flows 1 | 16.1 | (29.6) | 2.7 | 42.4 | 57.7 |

| Note: Free Cash Flow in 2023 has been calculated as Cash flows from Operating Activities, less Cash flows used in Investing Activities. In the prior year, Free Cash Flow was calculated as Cash flows from Operating Activities, less Cash flows used in Investing Activities less finance lease principal payments which are reported as part of cash flow used in financing activities in 2022. |

Operations

The Company produced 129,830 ounces of gold and 3,848 tonnes of copper in the fourth quarter of 2023. Fourth quarter gold production was 31% higher than the previous quarter and 7% higher than the corresponding quarter in 2022. The quarter-on-quarter increase was driven by higher production at all operations during the quarter and includes first production from the Horseshoe Underground at Haile. The Company produced 477,313 ounces of gold and 14,172 tonnes of copper in 2023, which was broadly in line with production in 2022.

The Company recorded a fourth quarter AISC 1 of $1,658 per ounce on gold sales of 118,821 ounces. This was a 13% reduction in AISC 1 compared to the previous quarter and a 3% increase compared to the corresponding period in 2022. The quarter-on-quarter reduction was driven by 21% higher comparative gold sales in the fourth quarter. For 2023, the Company recorded an AISC 1 of $1,587 on sales of 467,895 ounces of gold.

Haile produced 37,566 ounces of gold in the fourth quarter. The 62% increase compared to the previous quarter was primarily due to the addition of first production from the Horseshoe Underground. Haile's fourth quarter AISC 1 was $2,570 per ounce, a reduction compared to the previous quarter largely driven by the higher quarter-on-quarter gold sales. Annual 2023 production at Haile was 152,481 ounces of gold at an AISC 1 of $1,921 per ounce sold. The high AISC 1 of Haile in the fourth quarter reflects both the high level of production stripping expenditures in the open pit and the fact that Horseshoe underground is still in ramp up, whilst the full year AISC 1 outcome of Haile also reflects lower than estimated ore grades encountered in the now-completed Mill Zone pit, as previously reported.

During the third quarter, first development ore was mined and stockpiled from the Horseshoe Underground mine at Haile. First production ore was mined in mid-October and three stopes were mined as planned during the fourth quarter of 2023.

Didipio produced 42,807 ounces of gold and 3,848 tonnes of copper in the fourth quarter. The 40% increase in gold production compared to the previous quarter was mainly due to higher grade breccia stopes being mined, which was facilitated by completion of the crown pillar strengthening project. Copper production increased by 13% quarter-on-quarter. Didipio's fourth quarter AISC 1 was $737 per ounce on gold sales of 39,734 ounces and 3,923 tonnes of copper, a 15% reduction from the previous quarter due to higher sales. Annual 2023 production at Didipio was 138,527 ounces of gold and 14,172 tonnes of copper at an AISC 1 of $730 per ounce.

Macraes produced 36,117 ounces of gold in the fourth quarter. The 4% increase compared to the previous quarter resulted from record mill throughput achieved during the fourth quarter of 2023. Macraes fourth quarter AISC 1 was $1,468 per ounce, a 5% decrease compared to the previous quarter mainly due to the higher quarter-on-quarter gold sales. Annual 2023 production at Macraes was 137,018 ounces of gold at an AISC 1 of $1,570 per ounce.

Waihi produced 13,340 ounces of gold for the fourth quarter. The 23% increase compared to the previous quarter was driven by a 24% increase in feed grade, as mining of the remnant areas shifted into higher grade zones. Waihi's fourth quarter AISC 1 was $1,829 per ounce, a 17% reduction compared to the previous quarter mainly driven by the higher quarter-on-quarter gold sales. Annual 2023 production at Waihi was 49,286 ounces of gold at an AISC 1 of $1,914 per ounce.

Financial

The Company recorded fourth quarter consolidated revenue of $267 .3 million, a 25% increase compared to the previous quarter largely driven by 21% higher quarter-on-quarter gold sales volumes across the operations due to strong production, particularly from Didipio and Haile. Fourth quarter revenue was 12% above the corresponding period in 2022, reflecting higher gold sold from Didipio combined with a 13% higher average realized gold price which partly offset the lower gold sales volumes from Haile underpinned by lower production.

The Company achieved record annual consolidated revenue of $1.0 billion , a 6% increase relative to the previous year, mainly reflecting an 8% higher average realized gold price received.

Fourth quarter Adjusted EBITDA 1 was $94 .6 million, a 50% increase relative to the previous quarter mainly due to the 25% higher revenue. Fourth quarter Adjusted EBITDA 1 was 4% lower than the corresponding quarter in 2022 as higher revenues were offset by higher cost of sales and accrual of the Additional Government Share at Didipio, along with lower foreign exchange gains and net other expenses compared with other income in 2022.

Annual consolidated Adjusted EBITDA 1 was $410 .1 million, a 11% increase compared to 2022, driven by higher revenue and lower cost of sales which was partially offset by higher G&A costs, indirect taxes, corporate restructuring costs and recognition of the Additional Government Share at Didipio.

Fourth quarter net loss was $18 .9 million or $0.03 per share fully diluted, compared with a net loss of $5 .5 million and $0.01 per share fully diluted in the previous quarter. The net loss was primarily driven by the non-cash write-down of historic tax receivables in the Philippines , totaling $38 .3 million ( $22 .1 million excise taxes and $16 .2 million of value added taxes). The Company had been seeking recovery of indirect taxes assessed and paid relating to periods from 2013 and 2019 which it believed were not due and payable at the time, pursuant to the Financial or Technical Assistance Agreement ("FTAA"). These recovery actions were in various stages of court proceedings. Given the lack of definitive progress, ongoing administrative costs incurred in respect of these recovery actions, and with the Additional Government Share payments now applicable, the Company has written down these indirect tax receivables and has commenced the process of discontinuing legal proceedings in these matters. The Additional Government Share calculation as at December 31, 2023 reflects these taxes paid. As these taxes have already been paid and considered as part of the Government share, this write-down of the indirect tax receivables will not result in a cash payment. Were these taxes recovered, it would have resulted in a cash refund to the Company and an associated credit to the Additional Government Share also with no net cash flow impact to the Company.

Fourth quarter Adjusted Net Profit 1 was $9 .6 million or $0.01 per share fully diluted compared with an Adjusted Net Loss 1 of $1 .7 million or $0.00 per share in the previous quarter.

Annual Adjusted Net Profit 1 was $115 .4 million, a 20% decrease compared to the previous year mainly due to the first accrual of the Additional Government Share at Didipio of $20 .3 million, expected to be paid in April 2024 .

Fourth quarter cash flows from operating activities were $94 .8 million, which was 52% above the previous quarter reflecting both the higher revenue and Adjusted EBITDA 1 .