Oceana aims for record half million ounces of gold
Oceana Gold has boosted its exploration and capital expenditure programme for 2017, up to $US252 million, ($345.9m) as it targets more than 500,000 ounces of gold in a calendar year for the first time in its 27-year history.
Its Macraes mine in east Otago has been the mainstay of operations for decades, and while other Oceana mines are threatening its production dominance, it is getting its fair share of exploration, works and expansion funding within the wider group during 2017.
Oceana, now the country’s largest gold miner accounting for about 98 per cent of output, produced within guidance 416,741 oz of gold in 2016 overall, and 21,123 tonnes of copper from Didipio in the northern Philippines.
The copper is a by-product of the gold mining which hugely offsets production costs.
Oceana chief executive Mick Wilkes said it was the fifth consecutive year the company had achieved output and cost-of-production guidance, and he expected further production gains and stronger profit margins across calendar 2017.
“We expect 2017 to be another solid year of performance across our business with higher production and stronger margins,” Wilkes said.
Mr Wilkes set 2017 gold guidance in a range of 550,000 to 610,00 oz, while copper production was expected to decline from last year’s 21,100 tonnes to a range of 15,000-17,000 tonnes.
The all in sustaining costs to produce an ounce of gold in 2016 was $US708 consolidated across all its mines, while Wilkes has set those costs in 2017 to be in a range of $US600-$US650.
Wilkes said Oceana had a “solid pipeline of organic growth opportunities” across its portfolio of mines, with expansion at Macraes, Haile in South Carolina delivering its first gold in January and Didipio underground developments forging ahead.
While exploration funding for Macraes, at up to $US8m for the year, was at the lower end of most of the four mines, between $US50m-$US60m will be spent, largely on prestripping costs
At Waihi in the central North Island, drilling was focusing on extending known underground gold veins and also a large exploration target below the historical Martha Pit, which has been closed for open pit mining following a slip in April last year.