OceanaGold Announces Waihi District Pre-Feasibility Study
OceanaGold Corporation (TSX: OGC) (OTCQX: OCANF) recently unveiled the results of the Waihi District Pre-Feasibility Study (PFS), which outlines significant prospects for both the existing Waihi operation and the proposed Wharekirauponga underground mine. This study highlights the potential economic benefits stemming from the anticipated mining operations.
Key Highlights from the PFS
The key findings of the Waihi District PFS reveal an initial mineral reserve for the Wharekirauponga underground mine estimated at 4.1 million tonnes with a gold grade of 9.2 g/t, culminating in approximately 1.2 million ounces of gold. The project exhibits impressive financial metrics, including an after-tax Net Present Value (NPV5%) of $621 million at a projected gold price of $2,400 per ounce.
Financial Performance Metrics
The study suggests an Internal Rate of Return (IRR) of 24% assuming a gold price of $2,400 per ounce, while the return would reduce to 9.2% if the price were $1,750 per ounce. Over a 15-year operational life, OceanaGold anticipates producing 1.6 million ounces of gold at an average All-in Sustaining Cost (AISC) of around $994 per ounce.
Project Upside and Expectations
One of the most promising aspects of the PFS is the significant project upside. OceanaGold estimates around 400,000 ounces of inferred resources, with findings that suggest the mineralization at the EG Vein Zone extends an additional 270 meters south. This has opened up exciting opportunities for further exploration and development.
Operational Timeline and Budget
The capital expenditure for the project is expected to reach approximately $556 million over a period of eight years, starting from 2025, with efforts funded from the free cash flow generated by ongoing operations. The PFS anticipates that ore extraction from the Wharekirauponga site could begin as early as 2032.
Company Insights and Statements
Gerard Bond, President and CEO of OceanaGold, emphasized the significance of the PFS, stating, "This PFS is a major milestone for OceanaGold and the Waihi operation. We aim to develop the Wharekirauponga Underground mine responsibly, extending the Waihi operation's life while delivering strong returns and positive impacts on local economies."
Exploration Plans and Future Development
OceanaGold plans to continue drilling in the upcoming years, targeting the EG Vein Zone's high-grade mineralization. A drilling program of approximately 17,700 meters is outlined for 2025, aimed at expanding and converting the existing resources. By continuing this exploration, OceanaGold hopes to further enhance the economic viability of this promising operation.
Permitting and Environmental Considerations
The New Zealand government's Fast-track Approvals Bill, which was introduced to streamline project approvals, is awaited to significantly enhance OceanaGold's regulatory processes. The company anticipates that this legislation will expedite permitting for the Waihi North Project by mid-2025, facilitating essential infrastructure development.
Company Overview
OceanaGold is an intermediate gold and copper producer with a commitment to maximizing Free Cash Flow from its operations while providing substantial returns to its stakeholders. The company manages four operating mines: the Haile Gold Mine, Didipio Mine, and the Macraes and Waihi operations.
Frequently Asked Questions
What is the focus of OceanaGold's latest study?
The latest study focuses on the Waihi District, highlighting the economic potential of the Wharekirauponga underground mine.
What are the expected gold reserves at Wharekirauponga?
The projected reserves are approximately 1.2 million ounces of gold from 4.1 million tonnes at 9.2 g/t.
What financial metrics did the PFS report?
The PFS reports an after-tax NPV of $621 million and an IRR of 24% at a gold price of $2,400 per ounce.
When is the expected start date for operations?
The first ore is expected to be mined from the Wharekirauponga site in 2032.
How does OceanaGold prioritize environmental considerations?
OceanaGold is committed to maintaining high environmental and social standards, which have supported their operations in New Zealand for over thirty years.
