Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
OceanaGold (TSX, ASX: OGC) said on Monday that restart activities at its Didipio gold and copper mine in the Philippines were advancing ahead of plan, adding it expects to have 65% of the total workforce in place by the end of September and about 90% by the end of the year.
The operation has been halted for over two years due to a dispute with a provincial government over the company’s license to operate.
OceanaGold renewed Didipio’s permit in July, securing another 25 years of operations. It had kicked off the renewal process in 2018, but the contract expired in June 2019 and OceanaGold kept the mine open under a temporary license. A blockade backed by the local government ultimately forced the Brisbane-based miner to suspend operations a few weeks later. It also laid off hundreds of workers.
Restart activities at its Didipio suggest 65% of the total workforce will be in place by the end of September and about 90% by the end of the year
During August, OceanaGold successfully exported and sold the remaining gold doré from Didipio, while also starting the transport of gold-copper concentrate inventory stored on site.
As of September 10, the company had delivered about 6,000 dry metric tonnes of the total concentrate ahead of shipping.
It expects to transport roughly 80% of the concentrate to port by the end of the third quarter, with the entire load moved by mid-October.
Didipio, which began production in 2013 and is located 270 km north of Manila, has a measured and indicated resource of 1.3 million ounces of gold and 160,000 tonnes of copper.
Once back in full underground production, the mine is slated to generate about 10,000 ounces of gold and 1,000 tonnes of copper per month once production is fully ramped up.
The mine is a major direct and indirect employer in the provinces of Quirino and Nueva Vizcaya, as well as a significant contributor of socio-economic benefits for the local and national economies.
OceanaGold revised its guidance for its Macraes mines in New Zealand to between 135,000 and 145,000 gold ounces, reflecting the production impact of the country’s lockdown combined with the management of geotechnical risks limiting. The mine’s previous guidance was 155 000 oz/y to 165 000 oz/y for 2021.
Waihi operations were also halted in accordance with New Zealand’s restrictions and the impact of the suspension is about 5,000 ounces, the company said.
On a consolidated basis, after the inclusion of Didipio, OceanaGold continues to expect full year production of between 350,000 and 370,000 gold ounces.
