Corporate Presentation

Transcription

1 Consistently Delivering On Commitments January 2018 Corporate Presentation

2 Cautionary & Technical Statements Cautionary Notes - Information Purposes Only The information contained in this presentation is provided by OceanaGold Corporation ( OGC ) for informational purposes only and does not constitute an offer to issue or arrange to issue, or the solicitation of an offer to issue, securities of OGC or other financial products. The information contained herein is not investment or financial product advice and has been prepared without taking into account the investment objectives, financial situation or particular needs of any particular person. The views, opinions and advice provided in this presentation reflect those of the individual presenters only. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusion contained in this presentation. To the maximum extent permitted by law, none of OGC or any of its directors, officers, employees or agents accepts any liability, including, without limitation, any liability arising out of fault or negligence, for any loss arising from the use of the information contained in this presentation. Furthermore, this presentation does not constitute an offer of shares for sale in the United States or to any person that is, or is acting for the account or benefit of, any U.S. person (as defined in Regulation S under the United States Securities Act of 1933, as amended (the "Securities Act")) ("U.S. Person"), or in any other jurisdiction in which such an offer would be illegal. OGC s shares have not been and will not be registered under the Securities Act. Cautionary Statement Concerning Forward Looking Information Certain information contained in this presentation may be deemed forward-looking within the meaning of applicable securities laws. Forward-looking statements and information relate to future performance and reflect OGC s expectations regarding the generation of free cash flow, execution of business strategy, future growth, future production, estimated costs, results of operations, business prospects and opportunities of OGC and its related subsidiaries. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as expects or does not expect, is expected, anticipates or does not anticipate, plans, estimates or intends, or stating that certain actions, events or results may, could, would, might or will be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those expressed in the forward-looking statements and information. They include, among others, the accuracy of mineral reserve and resource estimates and related assumptions, inherent operating risks, and those risk factors identified in OGC s most recent annual information forms prepared and filed with securities regulators which are available on SEDAR at under OGC s name. There are no assurances OGC can fulfil forward-looking statements and information. Such forward-looking statements and information are only predictions based on current information available to management of OGC as of the date that such predictions are made; actual events or results may differ materially as a result of risks facing OGC, some of which are beyond OGC s control. Although OGC believes that any forward-looking statements and information contained in this presentation are based on reasonable assumptions, readers cannot be assured that actual outcomes or results will be consistent with such statements. Accordingly, readers should not place undue reliance on forward-looking statements and information. OGC expressly disclaims any intention or obligation to update or revise any forward-looking statements and information, whether as a result of new information, events or otherwise, except as required by applicable securities laws. The information contained in this release is not investment or financial product advice. Technical Disclosure The exploration results were prepared in accordance with the standards set out in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves ( JORC Code ) and in accordance with National Instrument Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators ( NI ). The JORC Code is the accepted reporting standard for the Australian Stock Exchange Limited ( ASX ). For further scientific and technical information (including disclosure regarding mineral resources and mineral reserves) relating to the Haile Mine, the Macraes Mine and the Didipio Mine please refer to the NI compliant technical reports available at sedar.com under the Company s name. General Presentation Notes All AISC and cash costs are net of by-product credits unless otherwise stated All financials are denominated in US Dollars unless otherwise stated 2

3 Investor Overview LARGEST SHAREHOLDERS Shareholder Geographic Composition 1 Blackrock (London) ANZ 10% Asia 3% United States 46% 2 Van Eck Associates (New York) 3 Franklin (San Francisco) 4 Ingalls & Snyder (New York) 5 Tocqueville (New York) 6 Royal Bank Investment (Toronto) 7 Commonwealth Bank (Colonial) (Sydney) Europe 32% 8 Dimensional Fund (Austin) 9 Vanguard Group (Sydney) 10 M&G Investment (London) Canada 7% 11 Deutsche Bank (New York/Frankfurt) 12 Newton (London) TICKER MARKET CAP (1) AVG. DAILY TRADING VOLUMES (1) 1. On 8 Jan 2018 TSX/ASX: OGC OTC: OCANF C$2.0 billion A$2.1 billion C$10 million 13 Taylor Asset Management (Toronto) 14 Fidelity (Boston) 15 Oppenheimer (New York) 16 Investec (London) 17 Norges Bank (Oslo) 18 AGF (Toronto) 19 Ruffer (London) 20 Sun Valley (Vancouver) 3

4 Year-to-Date Performance ON TRACK TO DELIVER ON GROUP 2017 GUIDANCE FOR SIXTH STRAIGHT YEAR 2017 GUIDANCE YTD (SEP 30) 2017 YTD (SEP 30) 2017 PRODUCTION (1) SALES (1) GOLD (ounces) 550, , , ,046 COPPER (tonnes) 18,000 19,000 14,664 13,249 AISC (2) (per ounce sold) $600 $650 $644 AISC based on sales 1. Includes pre-commercial production and sales from Haile 2. Excludes Haile 4

5 Financial Position (as at Sep 30, 2017) SECOND SEMI-ANNUAL DIVIDEND DECLARED 1. As of 9 Jan Total Liquidity $118m Total Debt $316m CASH $61 million (does not include ~$70m in marketable securities) UNDRAWN FACILITIES $57 million EQUIPMENT LEASES $43 million DRAWN FACILITIES $273 million CREDIT FACILITY REPAYMENT Q3 - $12M Q4 - $73M $30m repaid last week of October $43m repayment remaining for Q4/17 (fully financed from cash flows) MACRAES ZERO-COST HEDGING Total 2018 Ounces: 144 koz Put-option strike price: NZ$1,750 / oz Call-option strike price: NZ$1,938 / oz Current NZ gold price (1) : NZ$1,829 / oz COPPER HEDGING 2018 Total: 80% of copper production Price: $3.19 / lb $18m in additional revenue locked in

6 TRIFR Performance FOCUSSING ON OPERATIONAL EXPOSURES AND ACCOUNTABILITY FOR SAFETY WORKPLACE EXPOSURE MANAGEMENT Since 2015 workplace exposures have increased due to: Commencement of higher risk construction programs (Haile & Didipio Underground) Upskilling the Haile labour force to align with the OceanaGold safety standards FOCUSSED RESPONSE Refocus each operation to identify site specific risks, history of exposures and drive accountability Continued engagement of the leadership team & workforce to improve the safety culture across all sites TOTAL RECORDABLE INJURY FREQUENCY RATE* Q *Note. Total Recordable Injury Frequency Rate = (number of recordable injuries / number of hours worked) x 1,000,000 6

7 Valuation Disconnect $6.00 SHARE PRICE PERFORMANCE OGC Gold $1,400 $5.50 $1,350 OGC Share Price (C$/sh) $5.00 $4.50 $4.00 $3.50 $3.00 $1,300 $1,250 $1,200 $1,150 $1,100 Gold Price (USD/oz.) $2.50 $1,050 $2.00 $1,000 Source: Bloomberg AVG GOLD PRICE: $1,309 /oz AVG OGC PRICE: C$4.45 /share AVG GOLD PRICE: $1,281 /oz AVG OGC PRICE: $3.55 /share 7

8 Consistent Performance 3 YEAR TOTAL SHAREHOLDER RETURN 300 OGC + 154% GDX + 122% GDXJ + 140% TSX Global Gold + 126% Spot Gold + 109% Source: Bloomberg 5-YEAR PRODUCTION AND COST GUIDANCE TRACK RECORD 10 8 Number of Hits Number of Misses AEM KGC OGC PAAS ABX SSRI EDV CG THO NEM HL NGD DPM KDX PPP BTO KL EGO CDE GUY GG TGZ TXG ROXG AGI AR AKG PG AUY ASR IAG DGC PVG TMR ALO Source: RBC Capital Markets 8

9 Value Proposition EBTIDA MARGIN OceanaGold Peer Average 60% 50% 40% 30% 20% 10% 0% -10% Source: Bloomberg RETURN ON INVESTED CAPITAL 20% OceanaGold Peer Average 15% 10% 5% 0% -5% Source: Bloomberg PROFITABLE GOLD MINER RANK: 4th RANK: 1st RANK: 1st Based on net earnings as reported by Globe & Mail Top 1000 Most Profitable Canadian Companies Source: Globe and Mail 9

10 Robust Strategy POSITIONED WELL TO DELIVER ON HIGH MARGIN GROWTH OPPORTUNITIES 10

11 Strategically Positioned POSITIONED IN MULTIPLE GOLD PROVINCES AMERICAS CAROLINAS, USA NEVADA, USA SANTA CRUZ, ARGENTINA STRATEGIC INVESTMENTS GSV 15% NUG 16% 5 1 HAILE AUSTRALASIA 2 COROMANDEL, NZ 7 3 DIDIPIO STRATEGIC INVESTMENT 4 OTAGO, NZ LOCRIAN 35% RESOURCES ASIA WAIHI 2 JOINT VENTURES 3 CAGAYAN, PHILIPPINES 4 MACRAES GOLDFIELD LA CURVA CLAUDIA 6 7 LAOS & MYANMAR 11

12 Exploration Focus INCREASED COMPANY RESERVES WITH HIGH MARGIN OUNCES OGC Avg +38 % RESERVE CHANGE ( ) Global Gold Avg (6.2) % Global Reserves (Moz) 1,600 1,550 1,500 1,450 Global Reserves vs OceanaGold Reserves (1)(2) 1,563 Global Reserves OGC Reserves (3) 1,531 1,459 1,445 1, OceanaGold Reserves (Moz) 300% 250% 200% 150% 100% 50% 0% Change in Proportion of Exploration Spend to Revenue (2)(4)(5) ( ) 1, Source: 1. SNL 2. Bloomberg OGC Reserves include increased Haile reserves that were effective 1 Jan See Haile Technical Report dated 9 Aug RBC research 5. Company analysis % -100% OceanaGold Alamos Agnico Eagle Northern Star Alacer Barrick Eldorado Centerra Evolution Newmont Yamana Regis Newcrest New gold Detour 12

13 13 Robust Exploration Pipeline

14 Haile FOCUSED ON FURTHER RAMP-UP AND FINE TUNING THROUGH 2018 UNITED STATES MINE LIFE RESERVES (1) (Moz) RESOURCES (1)(2) (Moz) Haile Gold 3.46 (up ~70% YoY) OPERATIONAL HIGHLIGHTS Gold STATISTICS PRODUCTION GUIDANCE AISC GUIDANCE 110, ,000 oz $600 $650 per oz sold STRONG RECOVERIES Consistently in the low 80%s for past several weeks THROUGHPUT RAMP-UP Achieving name-plate capacity YTD PRODUCTION YTD SALES 68,332 oz 60,264 oz 1. Based on updated Haile NI Report dated 9 Aug Resources are inclusive of reserves and Inferred Resources GROWTH INITIATIVES EXPANSION Permitting expected to commence in early 2018 EXPLORATION Significant drill intercepts demonstrate additional resources 14

15 Haile Expansion Highlights OPTIMISATION STUDY RESULTS DEMONSTRATED INHERENT VALUE OPTIMISED DESIGN ORIGINAL DESIGN Gold Reserves Moz Average Annual Production koz 189 (1) 127 Life of Mine Years 18 (1) Net Cash flows US$ 1.8 billion (1),(2),(3) 1.1 billion (4) HORSESHOE UNDERGROUND Maiden reserve of 0.44 Moz announced LARGE OPEN PITS Optimised to $1,150/oz PLANT EXPANSION Increase to 4 Mtpa NEXT STEPS Advance permitting in Q1/18 1. Based on total mineable inventory 2. Pre-tax & undiscounted 3. Based on a $1,300/oz gold price assumption 4. Based on a $1,250/oz gold price assumption 15

16 Increased Production LOM Gold Production and Grade Profile Payable Gold Gold Grade Processed (g/t) Gold Production ( 000 oz) Gold production > 200,000 oz Gold Grade (g/t) Process Plant Ore Feed Profile OP Ore to Mill UG Ore to Mill 5,000 4,000 Tonnes ( 000) 3,000 2,000 1, AVG. ANNUAL PRODUCTION W/FULL UG FEED 213,000 oz BASED ON HORSESHOE RESERVES ONLY 16

17 Haile Exploration EXTENSIVE DRILLING ON NUMEROUS TARGETS AT HAILE 17

18 Resource Expansion at Haile Champion Reserve Design >0.4 g/t Au Small Mill Zone Ledbetter Snake Horseshoe Palomino 18

19 Waihi RESOURCE INCREASED BY ~500 Moz OVER PAST TWO YEARS NEW ZEALAND Auckland Waihi MINE LIFE RESERVES (Moz) RESOURCES (1) (Moz) Macraes Dunedin Wellington Christchurch Gold 0.35 Silver Resources are inclusive of reserves and Inferred Resources KEY HIGHLIGHTS Gold 0.57 Silver STATISTICS PRODUCTION GUIDANCE AISC GUIDANCE YTD PRODUCTION YTD SALES YTD AISC 110, ,000 oz $740 $790 per oz sold 87,323 oz 87,667 oz $786 per oz sold RESOURCE GROWTH POTENTIAL Martha Project could potentially add 7-10 years in incremental mine life SIGNIFICANT DISCONNECT WITH ANALYST VALUATION Consensus valuation of $100 $120m GROWTH INITIATIVES MARTHA PROJECT Permitting expected to commence early 2018 EXTENSIVE EXPLORATION Successful drilling indicates resource growth potential 19

20 Mine Life Extension Potential MARTHA PIT 920RL Drill Drive 800RL Drill Drive MARTHA U/G MINERALISATION CHRISTINA EMPIRE CORRENSO DRILLING 4.3m 33.4 g/t Au 2.7m 17.3 g/t Au 3.7m 25.2 g/t Au FAVONA/GLADSTONE DRILLING 39.9m 2.1 g/t Au 26.8m 6.2 g/t Au 34.9m 3.9 g/t Au REX DAYBREAK CORRENSO Drilling from initial 920RL drill point expected in Q4/17 FAVONA Currently drilling from initial 800RL drill point RECENT MARTHA DRILL RESULTS 18.5m 7.9 g/t Au 11.1m 8.1 g/t Au 5.1m 10.6 g/t Au 3.3m 20.9 g/t Au GLADSTONE MOONLIGHT 1. True width 2. Downhole length as not possible to determine true width 20

21 Coromandel Peninsula COROMANDEL GOLD DISTRICT PRODUCTION >12 MOZ AU, 52 MOZ AG Tenements Dome Field North Dome Field South Ohui Thames Twin Hills White Bluffs Glamorgan Golden Cross Hauraki (WKP) WKP 0 km 20 Karangahake WAIHI WAIHI 21

22 WKP DRILLING ENCOURAGING DRILL RESULTS FROM REGIONAL TARGET Source: Newmont and Company drill results * >50 gm-m intercepts 22

23 Macraes MINING HIGHER GRADE ORE FROM CORONATION NORTH NEW ZEALAND Auckland Waihi MINE LIFE RESERVES (Moz) RESOURCES (1) (Moz) Macraes Dunedin Wellington Christchurch Gold Resources are inclusive of reserves and Inferred Resources KEY HIGHLIGHTS Gold STATISTICS PRODUCTION GUIDANCE AISC GUIDANCE YTD PRODUCTION YTD SALES YTD AISC 180, ,000 oz $950 $1,000 per oz sold 115,205 oz 114,804 oz $1,188 per oz sold HIGHER GRADE CORONATION NORTH ORE FEED Commences in Q4/17 DECREASED CASH COSTS AISC expected to decrease with increased production GROWTH INITIATIVES EXPLORATION Drilling of multiple targets in the Macraes Goldfield ROUND HILL PROJECT Potential redevelopment of Macraes beyond current resource 23

24 Coronation North CONTINUE TO GROW THE RESOURCE BASE Coronation North Coronation Golden Point Recent Coronation North Drilling Round Hill FRUG 24

25 Macraes Redevelopment MACRAES ROUND HILL PROJECT REPRESENTS POTENTIAL MINE LIFE INCREASE ROUND HILL/GOLDEN POINT RESOURCE Recent Golden Point Drilling ~1.38 Moz (1)(2) STUDY ADVANCING Technical & economic work underway CONCEPT New location + build of smaller process plant w/tungsten circuit MINE LIFE EXTENSION Potential for mine life of years 1. As at 31 Dec Total Resources = M&I and Inferred Resources. M&I Resources are inclusive of reserves 25

26 Didipio PROCESSING MAINLY STOCKPILED ORE DURING UNDERGROUND RAMP-UP PHILIPPINES Manila Didipio MINE LIFE RESERVES Au (Moz) Cu (Mt) RESOURCES (1) Au (Moz) Cu (Mt) Gold 1.46 Copper Resources are inclusive of reserves and Inferred Resources Gold 2.06 Copper STATISTICS PRODUCTION GUIDANCE AISC GUIDANCE YTD PRODUCTION YTD SALES YTD AISC Davao City Au: 150, ,000 oz Cu: 18,000 19,000 t $70 $120 per oz sold Au: 137,534 oz Cu: 14,664 t Au: 124,308 oz Cu: 13,249 t $40 per oz sold KEY HIGHLIGHTS RECORD ANNUAL PRODUCTION EXPECTED FOR 2017 Underpins robustness of the operation DIDIPIO UNDERGROUND Currently developing panel 2 and stoping from panel 1 GROWTH INITIATIVES EXPLORATION Mainly focused on infill and extensional drilling of Didipio ore body 26

27 Didipio Underground TRANSITION TO UNDERGROUND MINING CONTINUES TO ADVANCE WELL Didipio paste fill plant under construction 27

28 Looking Ahead SHARE PRICE WEAKNESS PROVIDES UNIQUE OPPORTUNITY FOR INVESTORS PRODUCTION Production expected to be higher in Q4/17 with increased contribution from Haile & Macraes; partly offset by lower production at Didipio Continued ramp-up and fine-tuning of Haile process plant Decreased production expected in 2018 due mainly to lower production at Didipio DEVELOPMENT Advance Haile expansion to permitting Advance Martha project to permitting 2017 GUIDANCE Gold Production 550, ,000 ounces Copper Production 18,000 19,000 tonnes Continued development of panel 2 at Didipio U/G EXPLORATION Continued drilling of high priority targets across business All-In Sustaining Costs US$600 US$650 per ounce 28

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30 Argentina Joint Ventures POTENTIAL TO EARN-IN UP TO 75% ON EACH PROJECT IN PROLIFIC GOLD REGION 30

31 Financial Results Overview REVENUE (excludes Haile) Q3/17 $145 million Q2/17 $172 million YTD 17 $478 million EBITDA Q3/17 $73 million Q3 impacted by timing of sales around quarter end Didipio reduction, offset by Haile increase which was capitalised Average prices relatively flat Continuing strong EBITDA margin (>50%) Gold Price Received (per oz.) $1,262 $1,276 Q2/17 Copper Price Received (per lb) $2.82 $2.45 Q2/17 Q3/17 Q3/17 Q2/17 $85 million YTD 17 $260 million Lower overall costs including G&A Also impacted by timing of sales 130 Gold Sales (koz) 131 Q2/17 Q3/17 NET PROFIT Q3/17 $22 million Q2/17 $25 million YTD 17 $83 million Lower D&A profile with change in sales mix Copper Sales (t) 5,828 3,273 Q2/17 Q3/17 31

32 YTD (Sep 30) 2017 Capex YTD 2017 Capex Breakdown (USDm) Haile Didipio Macraes Waihi YTD 2017 Capex Breakdown (USDm) Non-Sustaining Sustaining Exploration $24 $56 $23 $42 TOTAL $196m $55 TOTAL $196m $118 $74 YTD 2017 Growth Capex (1) (USDm) Haile Didipio Macraes Waihi $1 $2 YTD 2017 Sustaining Capex (USDm) Didipio Macraes Waihi YTD 2017 Exploration Capex (USDm) Haile Didipio Macraes Waihi $65 TOTAL $118m $50 $12 TOTAL $55m $7 $10 TOTAL $21m $7 $2 $36 $5 1. Net of capitalised revenue from Haile 32