PERTH (miningweekly.com) – Dual-listed gold miner OceanaGold is expecting gold production to increase by 70% over the next three years, compared with 2021 levels.

The ASX- and TSX-listed miner this week unveiled a three-year production outlook, as well as cost and capital expenditure guidance, while also warning of a $102-million non-cash post-tax impairment charge for its 2021 financial statements.

“OceanaGold has a bright future. Over the next three years, we expect to increase gold production by approximately 70% compared with 2021, representing a compounded annual growth rate of approximately 15%. More importantly, we are expecting increasing free cash flow margins, particularly in 2024 with the step-change in production and a decrease in capital investments,” said acting CEO Scott Sullivan.

“Additionally, copper production is expected to increase to steady-state production levels beyond this year as Didipio has ramped up well ahead of expectations.”

For 2022, OceanaGold is targeting gold production of between 445 000 oz and 495 000 oz, and copper production of between 11 000 t and 13 000 oz. All-in sustaining costs (AISC) for the year are targeted at between $1 275/oz and $1 375/oz.

Gold production at Didipio, in the Philippines, continues to ramp up and will reach full underground production rates in the second quarter of 2022. The ramp-up of the Martha underground project, at the Waihi gold mine, in New Zealand, is also continuing over the next two years, with full production rates targeted for 2023.

For 2023, gold production is targeted at between 490 000 oz and 530 000 oz, with copper production to hit between 12 000 t and 14 000 t at the same time, with all-in sustaining costs targeted at $1 150/oz to $1 300 oz.

For 2024, the gold production target has been set at between 580 000 oz and 620 000 oz, with between 12 000 t to 14 000 t of copper to be produced, at an AISC of between $1 000/oz and $1 150/oz.

Total capital spend in 2022 is targeted at between $335-million and $395-million, while between $330-million and $395-million will be spent in 2023, and a further $260-million to $325-million in 2024.

Meanwhile, OceanaGold this week reported that the technical review of the Haile gold mine, in the US, had also been completed, assessing the mine plan using updated operating and capital costs.

“Based on the technical review the company did not reclassify mineral reserves and resources, although recognises the mine faces higher life-of-mine operating costs, particularly in mining, along with increased capital requirements related to waste stripping, potential acid-generating storage and tailings storage facility expansion. Higher operating costs also include the continued inefficiencies related to the re-handle of waste material due to delays in the supplemental environmental impact statement (SEIS) and increased water management resulting from higher than normal wet seasons in 2018 and 2019. These costs are expected to stabilise over the course of 18 to 24 months following the receipt of the permits associated with an SEIS final record of decision,” said Sullivan.

“I am confident in the future of the company and we are focused on rebuilding our credibility with the market as we continue to deliver on our commitments. Although the Haile Technical Review is complete, we see further opportunities to drive value and we are pursuing those. We will continue to drive productivity and cost efficiencies at all of our operations and, particularly, we will build capability in our capital allocation programme,” he added.

Along with the outcome of the technical review, OceanaGold has warned of a non-cash post-tax impairment charge of $102-million for the financial year, which would include a non-cash post-tax impairment charge of $181-million related to the Haile operation and a non-cash post-tax impairment reversal of $79-million to fully reinstate the carrying value for the Didipio operation.