TSE:OGC OceanaGold Q1 2024 Earnings Report C$4.98 -0.03 (-0.60%) As of 04/25/2025 04:15 PM Eastern Earnings HistoryForecast OceanaGold EPS ResultsActual EPSC$0.01Consensus EPS C$0.02Beat/MissMissed by -C$0.01One Year Ago EPSN/AOceanaGold Revenue ResultsActual Revenue$364.40 millionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/AOceanaGold Announcement DetailsQuarterQ1 2024Date4/30/2024TimeN/AConference Call DateWednesday, May 1, 2024Conference Call Time10:00AM ETConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckInterim ReportEarnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by OceanaGold Q1 2024 Earnings Call TranscriptProvided by QuartrMay 1, 2024 ShareLink copied to clipboard.There are 11 speakers on the call. Operator00:00:00Good morning, ladies and gentlemen, and welcome to the Oceana Gold Corporation Q1 2020. Good morning, ladies and gentlemen, and welcome to the Oceana Gold Corporation Q1 2024 Earnings Conference Call. At this time, all lines are in a listen only mode. Following the presentation, we will conduct a question and answer session. This call is being recorded on Wednesday, May 1, 2024. Operator00:00:27I would now like to turn the conference over to Rebecca Harris. Please go ahead. Speaker 100:00:32Good morning, and welcome to OceanaGold's Q1 2024 results webcast and conference call. I'm Rebecca Harris, Director of Investor Relations. We are joined today by Jerry Bond, President and Chief Executive Officer Mary Sven Nykirk, Chief Financial Officer David Londono, Chief Operating Officer, Americas Peter Scharke, Chief Operating Officer, Asia Pacific and Craig Feebrey, Chief Exploration Officer. The presentation that we will be referencing during the conference call is available through the webcast and on our website. I would also like to remind everyone that our presentation will be followed by a Q and A session. Speaker 100:01:07As we will be making forward looking statements during the call, please refer to the cautionary notes included in the presentation, news release and MD and A, as well as the risk factors set out in our annual information form. All dollar amounts discussed in this conference call are in U. S. Dollars. I will now turn the call over to Jared for opening remarks. Speaker 200:01:25Thank you, Rebecca. Good morning, everyone, and thanks for joining us today. We are pleased to have safely delivered 1st quarter production in line with plan in a period of record high average realized gold prices. We had strong production from our 3 largest sites, and we were free cash flow positive despite it being a quarter in which we were investing to set up a stronger remainder of the year. During the quarter, we released updated technical reports for both Haile and Macraes. Speaker 200:01:54The mine plan at Haile now includes the addition of a second underground mine with Palomino projected to increase the average fee grade, improve the economics and extend the life of Haile. Macraes technical report showed its updated mine plan. Though it's important to note that this is a reserve case based on a $1500 an ounce gold price. We see plenty of potential for a longer mine life at Macraes at higher gold prices. We also released multiple exploration updates during the Q1, which Craig will cover off on later. Speaker 200:02:27Each of these exploration updates highlight the organic growth potential we have in close proximity to our existing mines. The best form of growth is organic growth. And in our case, we have a number of options which mainly relate to increasing access to higher grade ore to feed existing mills. This is low risk and high return growth. Finally, last month we hosted analysts and investors at our Haile Mine and we were really proud to show off the site, particularly the Horseshoe Underground Mine. Speaker 200:02:58We continue to open up new development headings in line with our plan to reach full production rates there by the end of this second quarter. This next slide shows how we're tracking compared to our guidance ranges. As outlined when we set guidance in February, quarter 1 was expected to be our lowest production quarter of the year with our production profile to be second half weighted. And this is driven by the timing of access to higher grade ore at all sites. Our Q1 result is in line with this. Speaker 200:03:30Open pit stripping is on track at Haile and Macraes, and we are entering new ore phases in both open pit mines. Together with the ramp up at Haile Underground, this will help drive a stronger second half at both of those sites. Given the production profile across the year, our Q1 all in sustaining cost per ounce is higher than we expect for the remainder of the year. With the benefit of more ounces produced in each subsequent quarter this year, we expect the all in sustaining costs to come down quarter over quarter and be within our guidance range by the end of the year. Our capital projects are on plan. Speaker 200:04:08The main items are open pit stripping and tailing storage facility expenditures at Haile and Macraes continued capital development at Horseshoe Underground at Haile and ongoing permitting and study costs at WKP. 2024 is a year of delivery for OceanaGold, and our plan is for progressively stronger quarters for the remainder of the year. We are on track to achieve the projected annual growth in production, reduction in unit cost and generation of strong free cash flow. I'll now turn the call over to Marius, who will discuss our financial highlights for the quarter. Speaker 300:04:46Thank you, Jarrod, and good morning, everyone. I'm pleased to share that we generated a quarterly revenue of $270,000,000 in Q1, driven by strong gold sales of 117,000 ounces at a record average realized gold price. Free cash flow benefited from the strong gold price and was positive for the quarter. Despite high CapEx investment as well as drawing down low grade stockpiles at both Haile and Macraes. This translated to an adjusted earnings of $0.01 per share and an operating cash flow of $0.11 per share. Speaker 300:05:28Net debt was $82,000,000 at the end of the quarter, which is mainly made up of our drawn bank debt of $160,000,000 less available cash. As for our recent announcement, the available net proceeds from our Didipio IPO will be applied to the repayment of debt and will further strengthen our balance sheet. It is pleasing to see the $530,000,000 valuation for this prized asset following the book build process. Additionally, the sale of the Blackwater project to Federation Mining for $30,000,000 is expected to close in the coming months. Looking ahead, we are expecting an improving quarterly production profile throughout the year and combined with the strong gold price environment and ongoing cost improvement focus, we forecast to be in a net cash position well before the end of the year. Speaker 300:06:27This goes toward our strategy of being financially strong and gives us the flexibility to continue to invest in our organic growth opportunities across the business while also considering increased returns to our shareholders. I will now turn the call over to David to discuss the whole operation. Speaker 400:06:50Thank you, Marius, and hello, everyone. Risk quarter gold production at Haile was approximately 35,000 ounces, in alignment with the planned 2024 gold production profile. Mill feed this quarter was a combination of higher grade underground ore, plus lower grade stockpile material, as the open pit activities were focused on the continuous stripping on lead bedder Phases 23. We expect access to higher grade ore in Leadbeater to begin later in the Q2 and for it to continue to consistently deliver through the remainder of the year. Underground Grand Papa Horseshoe is progressing as planned, and during the Q1 we began backfilling the 1st underground stops with cemented rock fill. Speaker 400:07:41As we continue to open new production headings, we expect that the underground will be operating at poor mining rates by mid year. Capital spend during the quarter was in alignment with the 2024 plan as we continue with TSF's stage for construction activities and expect to ramp up the construction of our spec base to during Q2, with both facilities scheduled for completion prior to the end of the year. All other projects are being executed as per the 2024 plan. I will now turn the call over to Peter to discuss the EPO and our New Zealand assets. Speaker 500:08:24Thank you, David, and good morning, everyone. Didipio delivered 1st quarter gold of 26,000 ounces and copper production of 3,000 tonnes. Though this was lower than the previous quarter, it was in line with the mine plan as our stope sequence this quarter had a higher contribution from the lower grade moissanite stopes. We expect to be mining again from the higher grade Brecher stopes in the second half the year, in line with the mine schedule. The lower production in Q1, in addition to the costs of a planned mill shutdown, resulted in a higher all in sustaining cost for the quarter, in line with the plan and in line with our guidance expectation for the year. Speaker 500:09:06We announced during the quarter the results of the underground optimization work, which suggests we can increase mining rates from the current 1,750,000 tonne per annum to 2,500,000 tonne per annum. We look forward to the upside this will bring to Didipio and we'll share more on this opportunity as we advance this work. Macraes produced 32,000 ounces of gold in the Q1. The Macraes site continues to build on the mill efficiency we've previously spoken about. And I'm happy to say that they once again exceeded the quarterly throughput record at the mill. Speaker 500:09:42Feed through the mill this quarter relied on a higher input from the lower grade stockpiles though, as open pit activities were focused on stripping the next ore phase at Innis Mills. We expect to be in progressively more open pit ore in the next couple of quarters, which is in line with our full year plan. We are also continuing to assess opportunities for additional mineralization at Macraes, which would be economic at current gold prices. That work continues to be one of our key focus areas during 2024 and will drive some of the exploration and engineering updates you will see over the next year. Another exciting milestone for the Macraes team last quarter was the commissioning of the new electric shovel. Speaker 500:10:25This new shovel will contribute to our goal of lowering greenhouse gas emissions and has already been successful in its material movement output and done so at a lower unit cost compared to its diesel counterparts. We look forward to leveraging our experience with this type of equipment in other areas across site and eventually across the business. Waihi produced approximately 11,000 ounces of gold in the quarter and continues to address challenges with underground remnant mining, including higher stope dilution, which has resulted in lower average grades to the mill. In our Empire West mining area, we had an additional geotechnical challenge last quarter, where an historic crown pillar was identified through probe drilling to be broken and unlikely to be able to adequately support fill material above the stoping zones. As this area requires a top down mining sequence to manage the geotechnical risk, an engineered crown pillar would need to be designed and installed prior to commencing stope mining. Speaker 500:11:24This has delayed approximately 4,500 ounces of production from the first quarter into the second half of twenty twenty four as we re sequence operations into other areas of the underground. The difficulty of mining in remnant areas has been well known to us and was factored into our production guidance at the start of Speaker 600:11:41the year. Speaker 500:11:43We spoke last quarter about the positive developments at the national level of government in New Zealand. Since then, they have introduced a new fast track approvals bill into parliament, and we are following closely and believe that our Waihi North project, which includes WKP, would be suitable for consideration as part of the government's plans to support accelerated timelines for getting major projects in New Zealand consented and permitted. I'll now turn the call over to Craig to share some exploration highlights from the quarter. Speaker 700:12:16Thank you, Peter, and good morning, everyone. During the quarter, we had a number of exciting exploration updates as we have had a successful start to the year. At Haile, we released the results of the 1st underground exploration holes into the Horseshoe extension target. These results are of similar grade to those of Horseshoe and of significant width. So we're excited to continue drilling with hopes of announcing a new resource by next year. Speaker 700:12:43At Didipio, we continue to discover and extend mineralization at depth. Currently, we're underground mining from stopes just 120 meters below the open pit floor and have just extended mineralization to 720 meters below this. That's 600 meters below our current production stopes. These new results provide us ample opportunity to continue testing extensions, but importantly, grow the resource through infill drilling with 3 drill rigs and more than 24,000 meters budgeted for the remainder of the year. In addition to the drilling focused on resource growth at Didipio, I'm pleased to share that we've begun exploration on our regional Nappertan target, approximately 9 kilometers north of Didipio. Speaker 700:13:29We've drilled 4 holes as part of an early exploration campaign, and we'll continue to advance our knowledge of the area with additional exploration through the year. It's our first time exploring beyond the mine gate in many years, so we're very excited to again be testing targets in what's a highly prospective area. We also released exploration results from WKP in New Zealand last quarter, where we continued to extend mineralization on the EG vein through additional high grade step outs and infill drill holes. While exploration continues to expand the high grade chute from these drill pads, it's great to see we've recently commissioned a new drill pad that opens up drill access to the EG vein for several 100 metres further south. This is part of our 2024 plans to significantly grow the resource with more step out holes and over 11,000 meters of drilling. Speaker 700:14:25These results across our portfolio highlight why we continue to be excited about the organic growth options we have in our business. So I look forward to updating you again as we receive more results from these programs. I'll now turn the presentation back to you, Gerry. Speaker 200:14:42Thank you, Craig. So in summary, we have safely delivered the Q1 in line with plan, and we remain focused on our goals for the remainder of 2024. We have some exciting milestones coming up. Firstly, the ramp up of Haile Underground to its full run rate by mid year and advancing the work to increase Didipio's underground mining rates, both of which increase the feed grade to existing mills. Secondly, progressing WKP, both the drilling and study work, so that we are well placed to advance the project if the project is awarded a fast track project status by the New Zealand government. Speaker 200:15:20Thirdly, to safely and responsibly increase the free cash flow generation from our business, taking advantage of current metal prices and bringing more of the price to the bottom line by improving our asset utilization and lowering costs, Continuing exploration and finally, completing the listing of Oceania Gold Philippines Inc. And the Blackwater sale. Together with the free cash flow generated from operations, this will allow us to repay debt, strengthen our balance sheet and position ourselves to fund our growth and increase returns to shareholders. I'll now return the call to the operator and open up the line to any questions. Operator00:15:59Thank The first question comes from Ovais Habib at Scotiabank. Please go ahead. Speaker 600:16:30Hi, Gerard and Osha and Gold team. Just a couple of questions from me. Just starting off with Hale. I was definitely glad that I attended the Hale side trip and was great to see Haile underground performing well. Maybe this question for David, any color you can provide on ongoing development? Speaker 600:16:55Essentially, how far ahead of production are you right now? And what's the target for the next, let's say, 6 months? Speaker 400:17:07Hi, good morning, Apais. So as you saw, ultimately, we said we actually already done at the 9.25 level and we're mining the 975. So we're at least 6 months advanced on the development. So we make good progress. We're opening a few headings already. Speaker 400:17:28And yes, we're ready for the full ramp up before the middle of the year. Speaker 600:17:35Thanks, David for that. And just maybe moving on to the Didipio IPO, how should we be looking at withholding taxes on the funds that we generated with this IPO? Speaker 200:17:50Hi, Vas, good morning. The expected withholding tax rate is 10% of proceeds. We also have some costs associated with the IPO as well. So it will be what we've indicated to the market via our release, less costs, less 10%. Speaker 600:18:07Perfect. Thanks for that. And then just moving on to New Zealand, you mentioned that the new government introduced the fast track approvals bill for mining projects. Any more color you can provide as to how WKP fits into this and what we should expect over the next couple of months regarding WKP? Speaker 200:18:27Yes. Well, 2 things, Vivek. The first, the bill has to go through the parliamentary process and it will have a number of readings. So I think that the target of the government, as announced by them, is to have it enacted by the end of the year. Concurrently, we'll continue to do the study work and the drilling work to make sure that we've got the best possible reserve resource size for that study and any PFS and technical report that we do. Speaker 200:19:01As we said before, we'll continue to progress that and hope to get that done by the end of the year. So there could be this nice convergence between having some clarity on the bill, clarity on how we're going to progress the project and also ultimately, and it's a process that we have no line of sight on other than we hope to be a fast track project that we get that status, which will have the benefit of giving us greater certainty of that period from the time of starting to release our technical report and to first production. Speaker 600:19:41Thanks, Gerard. And just last question for me. Gerard, in terms of inflation, I mean, obviously, we saw a heightened inflation going into the end of 2023. Have you started seeing any sort of inflation tapering off, especially on labor side coming into 2024? Speaker 200:20:01Look, most of our inflationary costs have been low single digits as it relates to labor. The issue we have in some jurisdictions is turnover. That's kind of like the hidden cost of inflation and obviously when you've got a vibrant Australian mining sector so close to New Zealand and the Philippines, we do get some particularly younger folk taking the opportunity to earn more money in a higher paying jurisdiction. But as it relates to the cost of our wages bill, it's low single digits. And that's been locked in at start of this year or late last year for this year as a result of both collective agreements and entrained pay rises. Speaker 200:20:46And I would say Ovaisette that it's also included in our guidance estimates for this year. Operator00:21:02Thank you. Next question comes from Wayne Lam at RBC. Please go ahead. Speaker 800:21:08Yes, thanks. Good morning, guys. Just wondering at Haile, the 65% weighting in H2 implies a pretty big second half and the underground grades seem to have held up pretty well versus planned. But just curious on the mining and development rates that looked a little bit lighter in terms of the ramp up. Just wanted to understand a bit more detail about perhaps number of stopes that might be opened up by mid year or any other metrics that you're looking at that gives you confidence that the ramp Speaker 200:21:36up remains on track? Thanks, Wayne. Look, I'll let David do the second half of that question. But just a reminder for everyone on the call, I mean, we have 2 things going on there at Haile. 1, we've got the ramp up of the underground to full mining rates, which we expect will be achieved by the end of this year. Speaker 200:21:53And that obviously gives us a greater advantage. And then the second, we have access to the lead better open pit ore that we were stripping in the Q1 and progressing a bit through this quarter. So we get a double barrel effect of both higher grade from underground and higher grade from progressively higher grade from lead better open pit that all that will do is displace low grade stockpiles as it relates to the rate of ore feed from underground in the Q1. We were doing as David mentioned earlier, a lot of development work to give us that space, those headers that allow us to achieve that full run rate. David, do you want to get to the second half of Wayne's question? Speaker 200:22:35Do you want to give some sense for what he was asking about in terms of development rates and stripping? Speaker 400:22:45Yes. So at this point in time, we're actually doing a lot better than we budgeted for development. We're advancing about 300, between 3.50-400 meters per month, and we actually budgeted 3.40. So that's very good because we, as Gerard said, we're opening more headings. We plan to be mining about 4 stops per quarter, which is in line with the mine plan. Speaker 400:23:10And as Gerard said, we're getting into the thick of the high grade ore in Ledbetter. So we're very confident that we're going to have the ore that we planned for the second half of the year. Speaker 800:23:27Okay, perfect. Thanks. And then maybe just at Macraes, would you help outline a little bit more detail on where you see potential for additional material to be pulled in at a $2,300 gold price versus the $1700 resource assumption. And just wondering, given the loss of some of the reserves earlier this year, I guess as an offset to that, is there any additional material that could be brought forward into the plan given the higher gold price? Speaker 200:23:57Yes, great question, Wayne. Peter, do you want to take that one? Speaker 500:24:01Yes, Wayne. So the areas that we would look to extend with a higher gold price, Innis Mills, there's a significant cutback that we could that we are looking at and that we could execute in Innis Mills. Coronation and Coronation North have got a number of cutbacks, and Golden Bar has got another 2 cutbacks. And these are all areas that, you know, with a high gold price, we would be able to execute, we see reasonably, simply and quickly. There's obviously the approval process that we would need to go through. Speaker 500:24:35And we're looking using the new fast track process with New Zealand government potentially to make sure we get those nominated as well. Speaker 800:24:46Okay, great. And then maybe just last one for me. Just at Waihi, I want to understand a bit more about the geotech issues this quarter. Were those issues kind of localized? Or is there any impact to potential scaling back of mine rates there that might impact output levels ahead? Speaker 500:25:06No, so they are localized. And one of the challenges or some of the challenges we're having with the underground remnant areas is we actually have to develop, in a lot of cases, develop out to the old remnant areas and then probe drill to actually really understand what's there. We're relying on a lot of historic information, and we'd actually need to verify before we can fully execute. So the probe drilling in this case identified that the crown pillar was not adequate, which meant that we did have to have a mine plan change. So that has deferred some of those ounces out to the second half of the year. Speaker 500:25:40But in actual fact, our plans are now looking at how do we ramp up, underground mining rates from Waihi. So it's less about actually pulling back and it's more about mining more tonnes. We are continuing to see some challenges around dilution. We have got a program to reduce that, but we also want to make sure that we mine all of the contained gold. And in the remnant areas, sometimes it's better to take a little bit more and get all of the contained gold, but it does reduce the average grade through the mill. Speaker 500:26:11So we are working on a plan now to actually ramp up total mining capacity so that we can maintain the ramp up that we expect. Speaker 800:26:21Okay, perfect. Thanks for taking my questions and best of luck in the ramp up ahead. Speaker 200:26:27Thanks, Wayne. Operator00:26:30Thank you. Next question comes from Cosmos Chiu at CIBC. Please go ahead. Speaker 900:26:36Thanks, Jared and team. Maybe going back to the Didipio IPO, now that you'll be floating 20% of the shares of the subsidiary, will you be changing your guidance in any way now that you don't own 100%? And the next question is, are there any accounting intricacies that we should be aware of as you after the completion of the IPO? Speaker 200:27:03Thanks, Cos. No, there won't be any change to the guidance. We operate it. It's 80% owned by us. So in line with practice by all gold miners, we'll include it in our guidance. Speaker 200:27:17Obviously, it affects the net cash flow we receive. From an accounting perspective, no, it will be consolidated as usual per accounting rules and there will be a minority interest and there will be the biggest delta will be of course forward cash flow because there will be a 20% minority interest receiving the dividends that will be repatriated by Oceania Gold Philippines Inc. To all shareholders, including the parent. Speaker 900:27:48Great. And then maybe as a follow-up, could you maybe comment on the IPO process? Were you satisfied with it? Certainly, as Mary has talked about, in the end, you got a good price, but I think initial documents could have pointed to potentially even more or even higher price for the IPO. Could you maybe comment on that and how you feel about the entire process in the end? Speaker 200:28:17Yes. No, look, we're pleased with the process. The process went well and the outcome is great. So we achieved a price in 100% terms that is above consensus estimates, the consensus analyst estimates for Didipio, and that's from minority interest. So we were pleased with it. Speaker 200:28:38You're all right. When we started this process, gold and copper prices went on a good run and you'd love to think that that would translate to an even higher price, but that's not happening to gold equities more broadly. So that's more a macro question about the disconnect between spot gold prices and gold equities. But as it relates to the valuation of the Didipio mine, we were happy with the outcome again because we beat the Street estimate of the value for a minority state. I actually think the asset is a fabulous asset and a great opportunity. Speaker 200:29:17I'm not marketing, but it's a great opportunity given it is so low on the cost curve and generates so much cash flow. And as Craig said, has so much exploration upside and that goes to longevity and along with the increase in mining rates that Peter spoke about. We were selling this somewhat reluctantly because we had to as a term of the FTAA. But it's a great asset and we're happy with the outcome. Speaker 900:29:47Great. Maybe if we could talk about guidance a little bit, Jared. Well telegraphed that Q1 is going to be the weakest quarter of the year. As you mentioned, it's going to strengthen with each successive quarter. Reading through the MD and A and you know and the company as well, it does sound like it's going to be stronger in the second half with the underground, with the higher grades at some of the assets. Speaker 900:30:16But could you maybe talk about the velocity of change in terms of successive quarter in terms of improving on production? Am I correct that it's really going to jump in the second half? What's going to happen, say, in Q2? Speaker 200:30:32Yes. In summary, Karls, we expect each quarter to be successively stronger. And then just from a like a compound perspective, by definition, the second half is stronger than the first. But we expect that final quarter to be the strongest. And this is going to have an inverse positive relationship with all the sustaining costs because grade is king and you're aware mills are with the exception of Waihi are flat out. Speaker 200:31:05And so you just put at the same processing cost. And obviously the waste to ore ratio at the open pits slows. We get a like a triple whammy. So, no, it's quarter on quarter improvement and that's most dramatic at Haile, and equally a strong contribution from Macraes. And given that, that represents, say, 70% of our production, that's what drives a lot of that change. Speaker 900:31:40Great. And then maybe one last question. Q1 was a bit of a perfect storm in terms of transitioning from one pit to another at hail, waiting for the underground to come through. Pre stripping at Macraes and the Peal grades were down a little as well. So it resulted in the weakest quarter of the year, high on sustaining costs. Speaker 900:32:05Jared, as a company, was there any thought in terms of smoothing out quarterly production? Or was that something that not what you consider? It's really dependent on the individual mines and the individual mine plants. I'm just wondering because sometimes people talk about multi asset company diversification is a benefit. I'm just wondering if there were ever any thoughts in terms of smoothing out production quarter over quarter? Speaker 200:32:36In short, Carlos, no. I mean, every mine is has to be optimized in and of itself. And we're not playing portfolio smoothing here. We're trying to get the most gold at the lowest cost to market as soon as we can. We do get the benefit of diversification. Speaker 200:32:53I mean, it's happened in the last 2 years, right? When last year, Macraes performed and Didipio performed super strongly to offset a slightly weaker Haile. The year before Haile massively outperformed to offset a weaker Macraes. So over a year, we get that benefit. But no, each site has its own plan and as you said at the beginning, this was a quarter that with performed entirely in line with expectations. Speaker 200:33:28And we have to manage the business to on a multiyear basis. We're not trying to smooth earnings. We're not trying to smooth production. Speaker 900:33:40Of course. Thanks, Jared. Those are all my questions. Thanks for your answers. Speaker 200:33:43Thank you, Koss. Appreciate it. Thank you. Operator00:33:48Thank you. Next question comes from Mike Perkin at National Bank. Please go ahead. Speaker 1000:33:59Hi, guys. Most of my questions have been answered. Just following up on the potential to kind of bring in marginal tons mostly, it seems like at Macraes with much higher gold price versus budget. Is any of it like it opens up quality tons that are just kind of buried behind a lot of waste. If that's the case, are you comfortable just going ahead with it in this gold price environment? Speaker 1000:34:30Or would you use any kind of short term collar structure just to ensure cash margins are maintained to access those tons? Speaker 200:34:41Yes. Great question, Michael, and welcome back. Great to have you back on the line. You're obviously a bit rusty. Mike has been the 4th person on the call. Speaker 200:34:52Most of your questions will be answered early, but no one asked this one. So, no, we will be very careful to make sure that anything we do, as you call them, marginal tons, give us good return on the capital deployed. You're spot on. I mean you could hedge out over the next 3 years the gold price and lock in a price higher than what the market analysts have as they're tapering gold price estimates, although I do note that they're lifting out the back end almost on a weekly basis. But at this point in time with a strong balance sheet that we are largely deleveraging, We I don't think we want to be calling the top of the gold price and I don't think we would necessarily hedge. Speaker 200:35:47But that's a decision we don't have to make yet, but you can and everyone on the call can be certain that we're not going to mine to produce production that's $1 an ounce below the gold price. We're going to make sure we get a good margin on that investment. There is always a risk when you're doing stripping campaigns that you take that bet, but I think the balance sheet and overall portfolio profitability would warrant that. And again, their decisions are ahead of us. But that's the current thing here at this point in time. Speaker 1000:36:22Okay. Thanks very much. Thank you, Mike. Operator00:36:28Thank you. There are no further questions. I will turn the call back over for closing comments. Speaker 200:36:33Thanks, everyone. Thanks for joining us. That concludes the call. A replay will be available on the website later today. On behalf of everyone at Oceania Gold, the management team, all employees, thank you for attending and wish you a pleasant rest of the day. Speaker 200:36:48Bye for now. Operator00:36:52Ladies and gentlemen, this concludes your conference for today. We thank you for participating and we ask that you please disconnect your lines.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallOceanaGold Q1 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckInterim report OceanaGold Earnings HeadlinesCormark Issues Positive Estimate for OceanaGold EarningsApril 26 at 2:09 AM | americanbankingnews.comEquities Analysts Issue Forecasts for OceanaGold Q1 EarningsApril 19, 2025 | americanbankingnews.comSilicon Valley Gold RushA new technology has sparked a modern-day gold rush in Silicon Valley. OpenAI’s Sam Altman invested $375M. Bill Gates has backed four companies in this space. The World Economic Forum calls it “the most exciting human discovery since fire.” Whitney Tilson believes this trend could mint a new class of wealthy investors—and he’s sharing one stock to watch now, for free.April 26, 2025 | Stansberry Research (Ad)OceanaGold's (TSE:OGC) investors will be pleased with their strong 228% return over the last five yearsMarch 24, 2025 | finance.yahoo.comOceanaGold Corporation: OceanaGold Submits WNP Application for Fast-track Approval and Reports Additional High-Grade Mineralization at WharekiraupongaMarch 4, 2025 | finanznachrichten.deChanges to New Zealand’s Mining Regulations a Boost for Sector, Rua Gold CEO SaysJanuary 30, 2025 | msn.comSee More OceanaGold Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like OceanaGold? Sign up for Earnings360's daily newsletter to receive timely earnings updates on OceanaGold and other key companies, straight to your email. Email Address About OceanaGoldOceanaGold (TSE:OGC), a gold and copper producer, engages in exploration, development, and operation of mineral properties in the United States, the Philippines, and New Zealand. It explores for gold, copper, and silver deposits. OceanaGold Corporation was founded in 2003 and is based in Vancouver, Canada.View OceanaGold ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Markets Think Robinhood Earnings Could Send the Stock UpIs the Floor in for Lam Research After Bullish Earnings?Market Anticipation Builds: Joby Stock Climbs Ahead of EarningsIs Intuitive Surgical a Buy After Volatile Reaction to Earnings?Seismic Shift at Intel: Massive Layoffs Precede Crucial EarningsRocket Lab Lands New Contract, Builds Momentum Ahead of EarningsAmazon's Earnings Could Fuel a Rapid Breakout Upcoming Earnings Cadence Design Systems (4/28/2025)Welltower (4/28/2025)Waste Management (4/28/2025)AstraZeneca (4/29/2025)Mondelez International (4/29/2025)PayPal (4/29/2025)Starbucks (4/29/2025)DoorDash (4/29/2025)Honeywell International (4/29/2025)Regeneron Pharmaceuticals (4/29/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. Start Your 30-Day Trial MarketBeat All Access Features Best-in-Class Portfolio Monitoring Get personalized stock ideas. Compare portfolio to indices. Check stock news, ratings, SEC filings, and more. Stock Ideas and Recommendations See daily stock ideas from top analysts. Receive short-term trading ideas from MarketBeat. Identify trending stocks on social media. Advanced Stock Screeners and Research Tools Use our seven stock screeners to find suitable stocks. Stay informed with MarketBeat's real-time news. Export data to Excel for personal analysis. Sign in to your free account to enjoy these benefits In-depth profiles and analysis for 20,000 public companies. Real-time analyst ratings, insider transactions, earnings data, and more. Our daily ratings and market update email newsletter. Sign in to your free account to enjoy all that MarketBeat has to offer. Sign In Create Account Your Email Address: Email Address Required Your Password: Password Required Log In or Sign in with Facebook Sign in with Google Forgot your password? Your Email Address: Please enter your email address. Please enter a valid email address Choose a Password: Please enter your password. Your password must be at least 8 characters long and contain at least 1 number, 1 letter, and 1 special character. Create My Account (Free) or Sign in with Facebook Sign in with Google By creating a free account, you agree to our terms of service. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
There are 11 speakers on the call. Operator00:00:00Good morning, ladies and gentlemen, and welcome to the Oceana Gold Corporation Q1 2020. Good morning, ladies and gentlemen, and welcome to the Oceana Gold Corporation Q1 2024 Earnings Conference Call. At this time, all lines are in a listen only mode. Following the presentation, we will conduct a question and answer session. This call is being recorded on Wednesday, May 1, 2024. Operator00:00:27I would now like to turn the conference over to Rebecca Harris. Please go ahead. Speaker 100:00:32Good morning, and welcome to OceanaGold's Q1 2024 results webcast and conference call. I'm Rebecca Harris, Director of Investor Relations. We are joined today by Jerry Bond, President and Chief Executive Officer Mary Sven Nykirk, Chief Financial Officer David Londono, Chief Operating Officer, Americas Peter Scharke, Chief Operating Officer, Asia Pacific and Craig Feebrey, Chief Exploration Officer. The presentation that we will be referencing during the conference call is available through the webcast and on our website. I would also like to remind everyone that our presentation will be followed by a Q and A session. Speaker 100:01:07As we will be making forward looking statements during the call, please refer to the cautionary notes included in the presentation, news release and MD and A, as well as the risk factors set out in our annual information form. All dollar amounts discussed in this conference call are in U. S. Dollars. I will now turn the call over to Jared for opening remarks. Speaker 200:01:25Thank you, Rebecca. Good morning, everyone, and thanks for joining us today. We are pleased to have safely delivered 1st quarter production in line with plan in a period of record high average realized gold prices. We had strong production from our 3 largest sites, and we were free cash flow positive despite it being a quarter in which we were investing to set up a stronger remainder of the year. During the quarter, we released updated technical reports for both Haile and Macraes. Speaker 200:01:54The mine plan at Haile now includes the addition of a second underground mine with Palomino projected to increase the average fee grade, improve the economics and extend the life of Haile. Macraes technical report showed its updated mine plan. Though it's important to note that this is a reserve case based on a $1500 an ounce gold price. We see plenty of potential for a longer mine life at Macraes at higher gold prices. We also released multiple exploration updates during the Q1, which Craig will cover off on later. Speaker 200:02:27Each of these exploration updates highlight the organic growth potential we have in close proximity to our existing mines. The best form of growth is organic growth. And in our case, we have a number of options which mainly relate to increasing access to higher grade ore to feed existing mills. This is low risk and high return growth. Finally, last month we hosted analysts and investors at our Haile Mine and we were really proud to show off the site, particularly the Horseshoe Underground Mine. Speaker 200:02:58We continue to open up new development headings in line with our plan to reach full production rates there by the end of this second quarter. This next slide shows how we're tracking compared to our guidance ranges. As outlined when we set guidance in February, quarter 1 was expected to be our lowest production quarter of the year with our production profile to be second half weighted. And this is driven by the timing of access to higher grade ore at all sites. Our Q1 result is in line with this. Speaker 200:03:30Open pit stripping is on track at Haile and Macraes, and we are entering new ore phases in both open pit mines. Together with the ramp up at Haile Underground, this will help drive a stronger second half at both of those sites. Given the production profile across the year, our Q1 all in sustaining cost per ounce is higher than we expect for the remainder of the year. With the benefit of more ounces produced in each subsequent quarter this year, we expect the all in sustaining costs to come down quarter over quarter and be within our guidance range by the end of the year. Our capital projects are on plan. Speaker 200:04:08The main items are open pit stripping and tailing storage facility expenditures at Haile and Macraes continued capital development at Horseshoe Underground at Haile and ongoing permitting and study costs at WKP. 2024 is a year of delivery for OceanaGold, and our plan is for progressively stronger quarters for the remainder of the year. We are on track to achieve the projected annual growth in production, reduction in unit cost and generation of strong free cash flow. I'll now turn the call over to Marius, who will discuss our financial highlights for the quarter. Speaker 300:04:46Thank you, Jarrod, and good morning, everyone. I'm pleased to share that we generated a quarterly revenue of $270,000,000 in Q1, driven by strong gold sales of 117,000 ounces at a record average realized gold price. Free cash flow benefited from the strong gold price and was positive for the quarter. Despite high CapEx investment as well as drawing down low grade stockpiles at both Haile and Macraes. This translated to an adjusted earnings of $0.01 per share and an operating cash flow of $0.11 per share. Speaker 300:05:28Net debt was $82,000,000 at the end of the quarter, which is mainly made up of our drawn bank debt of $160,000,000 less available cash. As for our recent announcement, the available net proceeds from our Didipio IPO will be applied to the repayment of debt and will further strengthen our balance sheet. It is pleasing to see the $530,000,000 valuation for this prized asset following the book build process. Additionally, the sale of the Blackwater project to Federation Mining for $30,000,000 is expected to close in the coming months. Looking ahead, we are expecting an improving quarterly production profile throughout the year and combined with the strong gold price environment and ongoing cost improvement focus, we forecast to be in a net cash position well before the end of the year. Speaker 300:06:27This goes toward our strategy of being financially strong and gives us the flexibility to continue to invest in our organic growth opportunities across the business while also considering increased returns to our shareholders. I will now turn the call over to David to discuss the whole operation. Speaker 400:06:50Thank you, Marius, and hello, everyone. Risk quarter gold production at Haile was approximately 35,000 ounces, in alignment with the planned 2024 gold production profile. Mill feed this quarter was a combination of higher grade underground ore, plus lower grade stockpile material, as the open pit activities were focused on the continuous stripping on lead bedder Phases 23. We expect access to higher grade ore in Leadbeater to begin later in the Q2 and for it to continue to consistently deliver through the remainder of the year. Underground Grand Papa Horseshoe is progressing as planned, and during the Q1 we began backfilling the 1st underground stops with cemented rock fill. Speaker 400:07:41As we continue to open new production headings, we expect that the underground will be operating at poor mining rates by mid year. Capital spend during the quarter was in alignment with the 2024 plan as we continue with TSF's stage for construction activities and expect to ramp up the construction of our spec base to during Q2, with both facilities scheduled for completion prior to the end of the year. All other projects are being executed as per the 2024 plan. I will now turn the call over to Peter to discuss the EPO and our New Zealand assets. Speaker 500:08:24Thank you, David, and good morning, everyone. Didipio delivered 1st quarter gold of 26,000 ounces and copper production of 3,000 tonnes. Though this was lower than the previous quarter, it was in line with the mine plan as our stope sequence this quarter had a higher contribution from the lower grade moissanite stopes. We expect to be mining again from the higher grade Brecher stopes in the second half the year, in line with the mine schedule. The lower production in Q1, in addition to the costs of a planned mill shutdown, resulted in a higher all in sustaining cost for the quarter, in line with the plan and in line with our guidance expectation for the year. Speaker 500:09:06We announced during the quarter the results of the underground optimization work, which suggests we can increase mining rates from the current 1,750,000 tonne per annum to 2,500,000 tonne per annum. We look forward to the upside this will bring to Didipio and we'll share more on this opportunity as we advance this work. Macraes produced 32,000 ounces of gold in the Q1. The Macraes site continues to build on the mill efficiency we've previously spoken about. And I'm happy to say that they once again exceeded the quarterly throughput record at the mill. Speaker 500:09:42Feed through the mill this quarter relied on a higher input from the lower grade stockpiles though, as open pit activities were focused on stripping the next ore phase at Innis Mills. We expect to be in progressively more open pit ore in the next couple of quarters, which is in line with our full year plan. We are also continuing to assess opportunities for additional mineralization at Macraes, which would be economic at current gold prices. That work continues to be one of our key focus areas during 2024 and will drive some of the exploration and engineering updates you will see over the next year. Another exciting milestone for the Macraes team last quarter was the commissioning of the new electric shovel. Speaker 500:10:25This new shovel will contribute to our goal of lowering greenhouse gas emissions and has already been successful in its material movement output and done so at a lower unit cost compared to its diesel counterparts. We look forward to leveraging our experience with this type of equipment in other areas across site and eventually across the business. Waihi produced approximately 11,000 ounces of gold in the quarter and continues to address challenges with underground remnant mining, including higher stope dilution, which has resulted in lower average grades to the mill. In our Empire West mining area, we had an additional geotechnical challenge last quarter, where an historic crown pillar was identified through probe drilling to be broken and unlikely to be able to adequately support fill material above the stoping zones. As this area requires a top down mining sequence to manage the geotechnical risk, an engineered crown pillar would need to be designed and installed prior to commencing stope mining. Speaker 500:11:24This has delayed approximately 4,500 ounces of production from the first quarter into the second half of twenty twenty four as we re sequence operations into other areas of the underground. The difficulty of mining in remnant areas has been well known to us and was factored into our production guidance at the start of Speaker 600:11:41the year. Speaker 500:11:43We spoke last quarter about the positive developments at the national level of government in New Zealand. Since then, they have introduced a new fast track approvals bill into parliament, and we are following closely and believe that our Waihi North project, which includes WKP, would be suitable for consideration as part of the government's plans to support accelerated timelines for getting major projects in New Zealand consented and permitted. I'll now turn the call over to Craig to share some exploration highlights from the quarter. Speaker 700:12:16Thank you, Peter, and good morning, everyone. During the quarter, we had a number of exciting exploration updates as we have had a successful start to the year. At Haile, we released the results of the 1st underground exploration holes into the Horseshoe extension target. These results are of similar grade to those of Horseshoe and of significant width. So we're excited to continue drilling with hopes of announcing a new resource by next year. Speaker 700:12:43At Didipio, we continue to discover and extend mineralization at depth. Currently, we're underground mining from stopes just 120 meters below the open pit floor and have just extended mineralization to 720 meters below this. That's 600 meters below our current production stopes. These new results provide us ample opportunity to continue testing extensions, but importantly, grow the resource through infill drilling with 3 drill rigs and more than 24,000 meters budgeted for the remainder of the year. In addition to the drilling focused on resource growth at Didipio, I'm pleased to share that we've begun exploration on our regional Nappertan target, approximately 9 kilometers north of Didipio. Speaker 700:13:29We've drilled 4 holes as part of an early exploration campaign, and we'll continue to advance our knowledge of the area with additional exploration through the year. It's our first time exploring beyond the mine gate in many years, so we're very excited to again be testing targets in what's a highly prospective area. We also released exploration results from WKP in New Zealand last quarter, where we continued to extend mineralization on the EG vein through additional high grade step outs and infill drill holes. While exploration continues to expand the high grade chute from these drill pads, it's great to see we've recently commissioned a new drill pad that opens up drill access to the EG vein for several 100 metres further south. This is part of our 2024 plans to significantly grow the resource with more step out holes and over 11,000 meters of drilling. Speaker 700:14:25These results across our portfolio highlight why we continue to be excited about the organic growth options we have in our business. So I look forward to updating you again as we receive more results from these programs. I'll now turn the presentation back to you, Gerry. Speaker 200:14:42Thank you, Craig. So in summary, we have safely delivered the Q1 in line with plan, and we remain focused on our goals for the remainder of 2024. We have some exciting milestones coming up. Firstly, the ramp up of Haile Underground to its full run rate by mid year and advancing the work to increase Didipio's underground mining rates, both of which increase the feed grade to existing mills. Secondly, progressing WKP, both the drilling and study work, so that we are well placed to advance the project if the project is awarded a fast track project status by the New Zealand government. Speaker 200:15:20Thirdly, to safely and responsibly increase the free cash flow generation from our business, taking advantage of current metal prices and bringing more of the price to the bottom line by improving our asset utilization and lowering costs, Continuing exploration and finally, completing the listing of Oceania Gold Philippines Inc. And the Blackwater sale. Together with the free cash flow generated from operations, this will allow us to repay debt, strengthen our balance sheet and position ourselves to fund our growth and increase returns to shareholders. I'll now return the call to the operator and open up the line to any questions. Operator00:15:59Thank The first question comes from Ovais Habib at Scotiabank. Please go ahead. Speaker 600:16:30Hi, Gerard and Osha and Gold team. Just a couple of questions from me. Just starting off with Hale. I was definitely glad that I attended the Hale side trip and was great to see Haile underground performing well. Maybe this question for David, any color you can provide on ongoing development? Speaker 600:16:55Essentially, how far ahead of production are you right now? And what's the target for the next, let's say, 6 months? Speaker 400:17:07Hi, good morning, Apais. So as you saw, ultimately, we said we actually already done at the 9.25 level and we're mining the 975. So we're at least 6 months advanced on the development. So we make good progress. We're opening a few headings already. Speaker 400:17:28And yes, we're ready for the full ramp up before the middle of the year. Speaker 600:17:35Thanks, David for that. And just maybe moving on to the Didipio IPO, how should we be looking at withholding taxes on the funds that we generated with this IPO? Speaker 200:17:50Hi, Vas, good morning. The expected withholding tax rate is 10% of proceeds. We also have some costs associated with the IPO as well. So it will be what we've indicated to the market via our release, less costs, less 10%. Speaker 600:18:07Perfect. Thanks for that. And then just moving on to New Zealand, you mentioned that the new government introduced the fast track approvals bill for mining projects. Any more color you can provide as to how WKP fits into this and what we should expect over the next couple of months regarding WKP? Speaker 200:18:27Yes. Well, 2 things, Vivek. The first, the bill has to go through the parliamentary process and it will have a number of readings. So I think that the target of the government, as announced by them, is to have it enacted by the end of the year. Concurrently, we'll continue to do the study work and the drilling work to make sure that we've got the best possible reserve resource size for that study and any PFS and technical report that we do. Speaker 200:19:01As we said before, we'll continue to progress that and hope to get that done by the end of the year. So there could be this nice convergence between having some clarity on the bill, clarity on how we're going to progress the project and also ultimately, and it's a process that we have no line of sight on other than we hope to be a fast track project that we get that status, which will have the benefit of giving us greater certainty of that period from the time of starting to release our technical report and to first production. Speaker 600:19:41Thanks, Gerard. And just last question for me. Gerard, in terms of inflation, I mean, obviously, we saw a heightened inflation going into the end of 2023. Have you started seeing any sort of inflation tapering off, especially on labor side coming into 2024? Speaker 200:20:01Look, most of our inflationary costs have been low single digits as it relates to labor. The issue we have in some jurisdictions is turnover. That's kind of like the hidden cost of inflation and obviously when you've got a vibrant Australian mining sector so close to New Zealand and the Philippines, we do get some particularly younger folk taking the opportunity to earn more money in a higher paying jurisdiction. But as it relates to the cost of our wages bill, it's low single digits. And that's been locked in at start of this year or late last year for this year as a result of both collective agreements and entrained pay rises. Speaker 200:20:46And I would say Ovaisette that it's also included in our guidance estimates for this year. Operator00:21:02Thank you. Next question comes from Wayne Lam at RBC. Please go ahead. Speaker 800:21:08Yes, thanks. Good morning, guys. Just wondering at Haile, the 65% weighting in H2 implies a pretty big second half and the underground grades seem to have held up pretty well versus planned. But just curious on the mining and development rates that looked a little bit lighter in terms of the ramp up. Just wanted to understand a bit more detail about perhaps number of stopes that might be opened up by mid year or any other metrics that you're looking at that gives you confidence that the ramp Speaker 200:21:36up remains on track? Thanks, Wayne. Look, I'll let David do the second half of that question. But just a reminder for everyone on the call, I mean, we have 2 things going on there at Haile. 1, we've got the ramp up of the underground to full mining rates, which we expect will be achieved by the end of this year. Speaker 200:21:53And that obviously gives us a greater advantage. And then the second, we have access to the lead better open pit ore that we were stripping in the Q1 and progressing a bit through this quarter. So we get a double barrel effect of both higher grade from underground and higher grade from progressively higher grade from lead better open pit that all that will do is displace low grade stockpiles as it relates to the rate of ore feed from underground in the Q1. We were doing as David mentioned earlier, a lot of development work to give us that space, those headers that allow us to achieve that full run rate. David, do you want to get to the second half of Wayne's question? Speaker 200:22:35Do you want to give some sense for what he was asking about in terms of development rates and stripping? Speaker 400:22:45Yes. So at this point in time, we're actually doing a lot better than we budgeted for development. We're advancing about 300, between 3.50-400 meters per month, and we actually budgeted 3.40. So that's very good because we, as Gerard said, we're opening more headings. We plan to be mining about 4 stops per quarter, which is in line with the mine plan. Speaker 400:23:10And as Gerard said, we're getting into the thick of the high grade ore in Ledbetter. So we're very confident that we're going to have the ore that we planned for the second half of the year. Speaker 800:23:27Okay, perfect. Thanks. And then maybe just at Macraes, would you help outline a little bit more detail on where you see potential for additional material to be pulled in at a $2,300 gold price versus the $1700 resource assumption. And just wondering, given the loss of some of the reserves earlier this year, I guess as an offset to that, is there any additional material that could be brought forward into the plan given the higher gold price? Speaker 200:23:57Yes, great question, Wayne. Peter, do you want to take that one? Speaker 500:24:01Yes, Wayne. So the areas that we would look to extend with a higher gold price, Innis Mills, there's a significant cutback that we could that we are looking at and that we could execute in Innis Mills. Coronation and Coronation North have got a number of cutbacks, and Golden Bar has got another 2 cutbacks. And these are all areas that, you know, with a high gold price, we would be able to execute, we see reasonably, simply and quickly. There's obviously the approval process that we would need to go through. Speaker 500:24:35And we're looking using the new fast track process with New Zealand government potentially to make sure we get those nominated as well. Speaker 800:24:46Okay, great. And then maybe just last one for me. Just at Waihi, I want to understand a bit more about the geotech issues this quarter. Were those issues kind of localized? Or is there any impact to potential scaling back of mine rates there that might impact output levels ahead? Speaker 500:25:06No, so they are localized. And one of the challenges or some of the challenges we're having with the underground remnant areas is we actually have to develop, in a lot of cases, develop out to the old remnant areas and then probe drill to actually really understand what's there. We're relying on a lot of historic information, and we'd actually need to verify before we can fully execute. So the probe drilling in this case identified that the crown pillar was not adequate, which meant that we did have to have a mine plan change. So that has deferred some of those ounces out to the second half of the year. Speaker 500:25:40But in actual fact, our plans are now looking at how do we ramp up, underground mining rates from Waihi. So it's less about actually pulling back and it's more about mining more tonnes. We are continuing to see some challenges around dilution. We have got a program to reduce that, but we also want to make sure that we mine all of the contained gold. And in the remnant areas, sometimes it's better to take a little bit more and get all of the contained gold, but it does reduce the average grade through the mill. Speaker 500:26:11So we are working on a plan now to actually ramp up total mining capacity so that we can maintain the ramp up that we expect. Speaker 800:26:21Okay, perfect. Thanks for taking my questions and best of luck in the ramp up ahead. Speaker 200:26:27Thanks, Wayne. Operator00:26:30Thank you. Next question comes from Cosmos Chiu at CIBC. Please go ahead. Speaker 900:26:36Thanks, Jared and team. Maybe going back to the Didipio IPO, now that you'll be floating 20% of the shares of the subsidiary, will you be changing your guidance in any way now that you don't own 100%? And the next question is, are there any accounting intricacies that we should be aware of as you after the completion of the IPO? Speaker 200:27:03Thanks, Cos. No, there won't be any change to the guidance. We operate it. It's 80% owned by us. So in line with practice by all gold miners, we'll include it in our guidance. Speaker 200:27:17Obviously, it affects the net cash flow we receive. From an accounting perspective, no, it will be consolidated as usual per accounting rules and there will be a minority interest and there will be the biggest delta will be of course forward cash flow because there will be a 20% minority interest receiving the dividends that will be repatriated by Oceania Gold Philippines Inc. To all shareholders, including the parent. Speaker 900:27:48Great. And then maybe as a follow-up, could you maybe comment on the IPO process? Were you satisfied with it? Certainly, as Mary has talked about, in the end, you got a good price, but I think initial documents could have pointed to potentially even more or even higher price for the IPO. Could you maybe comment on that and how you feel about the entire process in the end? Speaker 200:28:17Yes. No, look, we're pleased with the process. The process went well and the outcome is great. So we achieved a price in 100% terms that is above consensus estimates, the consensus analyst estimates for Didipio, and that's from minority interest. So we were pleased with it. Speaker 200:28:38You're all right. When we started this process, gold and copper prices went on a good run and you'd love to think that that would translate to an even higher price, but that's not happening to gold equities more broadly. So that's more a macro question about the disconnect between spot gold prices and gold equities. But as it relates to the valuation of the Didipio mine, we were happy with the outcome again because we beat the Street estimate of the value for a minority state. I actually think the asset is a fabulous asset and a great opportunity. Speaker 200:29:17I'm not marketing, but it's a great opportunity given it is so low on the cost curve and generates so much cash flow. And as Craig said, has so much exploration upside and that goes to longevity and along with the increase in mining rates that Peter spoke about. We were selling this somewhat reluctantly because we had to as a term of the FTAA. But it's a great asset and we're happy with the outcome. Speaker 900:29:47Great. Maybe if we could talk about guidance a little bit, Jared. Well telegraphed that Q1 is going to be the weakest quarter of the year. As you mentioned, it's going to strengthen with each successive quarter. Reading through the MD and A and you know and the company as well, it does sound like it's going to be stronger in the second half with the underground, with the higher grades at some of the assets. Speaker 900:30:16But could you maybe talk about the velocity of change in terms of successive quarter in terms of improving on production? Am I correct that it's really going to jump in the second half? What's going to happen, say, in Q2? Speaker 200:30:32Yes. In summary, Karls, we expect each quarter to be successively stronger. And then just from a like a compound perspective, by definition, the second half is stronger than the first. But we expect that final quarter to be the strongest. And this is going to have an inverse positive relationship with all the sustaining costs because grade is king and you're aware mills are with the exception of Waihi are flat out. Speaker 200:31:05And so you just put at the same processing cost. And obviously the waste to ore ratio at the open pits slows. We get a like a triple whammy. So, no, it's quarter on quarter improvement and that's most dramatic at Haile, and equally a strong contribution from Macraes. And given that, that represents, say, 70% of our production, that's what drives a lot of that change. Speaker 900:31:40Great. And then maybe one last question. Q1 was a bit of a perfect storm in terms of transitioning from one pit to another at hail, waiting for the underground to come through. Pre stripping at Macraes and the Peal grades were down a little as well. So it resulted in the weakest quarter of the year, high on sustaining costs. Speaker 900:32:05Jared, as a company, was there any thought in terms of smoothing out quarterly production? Or was that something that not what you consider? It's really dependent on the individual mines and the individual mine plants. I'm just wondering because sometimes people talk about multi asset company diversification is a benefit. I'm just wondering if there were ever any thoughts in terms of smoothing out production quarter over quarter? Speaker 200:32:36In short, Carlos, no. I mean, every mine is has to be optimized in and of itself. And we're not playing portfolio smoothing here. We're trying to get the most gold at the lowest cost to market as soon as we can. We do get the benefit of diversification. Speaker 200:32:53I mean, it's happened in the last 2 years, right? When last year, Macraes performed and Didipio performed super strongly to offset a slightly weaker Haile. The year before Haile massively outperformed to offset a weaker Macraes. So over a year, we get that benefit. But no, each site has its own plan and as you said at the beginning, this was a quarter that with performed entirely in line with expectations. Speaker 200:33:28And we have to manage the business to on a multiyear basis. We're not trying to smooth earnings. We're not trying to smooth production. Speaker 900:33:40Of course. Thanks, Jared. Those are all my questions. Thanks for your answers. Speaker 200:33:43Thank you, Koss. Appreciate it. Thank you. Operator00:33:48Thank you. Next question comes from Mike Perkin at National Bank. Please go ahead. Speaker 1000:33:59Hi, guys. Most of my questions have been answered. Just following up on the potential to kind of bring in marginal tons mostly, it seems like at Macraes with much higher gold price versus budget. Is any of it like it opens up quality tons that are just kind of buried behind a lot of waste. If that's the case, are you comfortable just going ahead with it in this gold price environment? Speaker 1000:34:30Or would you use any kind of short term collar structure just to ensure cash margins are maintained to access those tons? Speaker 200:34:41Yes. Great question, Michael, and welcome back. Great to have you back on the line. You're obviously a bit rusty. Mike has been the 4th person on the call. Speaker 200:34:52Most of your questions will be answered early, but no one asked this one. So, no, we will be very careful to make sure that anything we do, as you call them, marginal tons, give us good return on the capital deployed. You're spot on. I mean you could hedge out over the next 3 years the gold price and lock in a price higher than what the market analysts have as they're tapering gold price estimates, although I do note that they're lifting out the back end almost on a weekly basis. But at this point in time with a strong balance sheet that we are largely deleveraging, We I don't think we want to be calling the top of the gold price and I don't think we would necessarily hedge. Speaker 200:35:47But that's a decision we don't have to make yet, but you can and everyone on the call can be certain that we're not going to mine to produce production that's $1 an ounce below the gold price. We're going to make sure we get a good margin on that investment. There is always a risk when you're doing stripping campaigns that you take that bet, but I think the balance sheet and overall portfolio profitability would warrant that. And again, their decisions are ahead of us. But that's the current thing here at this point in time. Speaker 1000:36:22Okay. Thanks very much. Thank you, Mike. Operator00:36:28Thank you. There are no further questions. I will turn the call back over for closing comments. Speaker 200:36:33Thanks, everyone. Thanks for joining us. That concludes the call. A replay will be available on the website later today. On behalf of everyone at Oceania Gold, the management team, all employees, thank you for attending and wish you a pleasant rest of the day. Speaker 200:36:48Bye for now. Operator00:36:52Ladies and gentlemen, this concludes your conference for today. We thank you for participating and we ask that you please disconnect your lines.Read morePowered by