OceanaGold's Macraes gold mine misses production target

OceanaGold Corp's Macraes gold mine in Otago missed its production target for 2017, taking longer to access higher grade ore than anticipated, but expects increased extraction this year.

The Melbourne-based mining operator produced 160,266 ounces of gold at the Macraes site in calendar 2017, below its forecast production of between 180,000 and 190,000 ounces, it said in a statement yesterday. OceanaGold produced 149,086 ounces of gold at New Zealand's biggest gold mine in 2016, having discovered a new zone of gold mineralisation the year earlier, which extended the site's life beyond an earlier plan to shutter by the end of 2017. The mine's all-in sustaining cash costs were US$1,115 an ounce, above the forecast US$950/oz-to-US$1,000/oz range.

"The quarter-on-quarter increase in production was attributable to a higher head grade, however, production was lower than guided due to delays in accessing higher grade ore from Coronation North," the company said. "Production at Macraes for 2018 is expected to be higher as the operation is now into higher grade ore at Coronation North, which will be the main source feed for the year."

OceanaGold is listed on the ASX and the Toronto Stock Exchange having quit its New Zealand listing in 2016 to trim compliance costs. The ASX-listed shares closed at A$3.23 yesterday.

The company's other New Zealand operation at Waihi produced 119,084 ounces of gold in 2017 at an all-in sustaining cash cost of US$759/oz, within its forecast for production of between 110,000 and 120,000 ounces at a cost of US$740/oz-to-US$790/oz. However, production at the North Island site is expected to be lower in 2018 "due to a mining sequencing where lower grades from the underground will be processed," and chief executive Mick Wilkes said OceanaGold will start the permitting process for life extensions to the site.

Earlier this month, the Otago Daily Times reported OceanaGold was worth $330 million to the economies of East Otago and Waihi in 2016, citing a KPMG report commissioned by the mining company. The miner employed 885 people across those two sites in 2016.

OceanaGold's Didipio mine in the Philippines beat forecast gold production with 176,790 ounces while copper production of 18,351 tonnes was in line with expectations. Its Haile mine in the US met expectations with gold production of 118,466 ounces.

(BusinessDesk)