OceanaGold Corporation (TSX & ASX: OGC) has upped its production guidance for calendar 2018, by as much as 10,000 ounces of gold at the top end.
Crucially, OceanaGold has not changed its forecast all in sustaining cost of production, maintaining a range of between $US725 and $US775 per ounce sold; which is markedly up on calendar 2017's cost of $US617/oz.
Last year's gold production of 574,606oz was a record for the 28-year-old company.
Chief executive Mick Wilkes announced this week that group guidance was changed from an expected 480,000-530,000 oz of gold, up to 500,000-540,000 oz.
Guidance for the copper by-product from its northern Philippine mine Didipio remained unchanged, within a production range of 15,000 tonnes to 16,000t.
Wilkes said first half trading had delivered a strong operating and financial performance, while OceanaGold's four mining operations in New Zealand, the US and Philippines had been achieving better than expected results.
In the Philippines at Didipio, there were improvements made to the mine plan and the mine had continued to “outperform,” with opportunities for further optimisation. Ramp-up of the underground mine was “progressing nicely.”
At Haile in North Carolina, which had been dogged by equipment commissioning issues a year ago, had more recently seen a strong operating performance alongside “solid” plant performance, while mining activities were gradually improving, Wilkes said.
In New Zealand, after a slow start to the year, OceanaGold's Waihi mine in the central North Island was “back on track.”
At its Macraes operation in East Otago, which for 27 years was the main annual gold producer until 2017, Wilkes said operations were slightly exceeding expectations with improved plant performance and a steady supply of higher grade ore from its Coronation North open pit operation.
Just last week Wilkes released a market update from Waihi, highlighting “high mineralisation” gold test drilling results, from beneath the historical Martha pit.
He said test drilling was designed to unlock a million ounces of gold resource-target, which could push out Waihi's mine life, at the current production levels, as far as 2030.
Last month the company lodged resource consent applications to develop another underground mine adjacent to the Martha pit, and also to resume open pit operations; with the permitting process expected to be complete by the end of next year.
Wilkes said “with the increase to our production guidance and strong financial performance, we fully expect to maintain our standing as one of the most profitable gold companies globally.”
*Simon Hartley is senior business reporter and assistant chief reporter for the Otago Daily Times.