December 11, 2014 | MANILA, PHILIPPINES

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Corporate News

Posted on December 09, 2014 10:16:00 PM

By Claire-Ann M. C. Feliciano, Senior Reporter

Australian miner allots $67M in capex forPHL operations

AUSTRALIAN miner OceanaGold Corp. said it will be spending roughly $100million next year, a bulk of that will be invested in boosting its Philippineoperations.

For 2015, the company estimates a total capital & exploration expenditure of approximately$100 million across its operations, OceanaGold said in its report to the Australian SecuritiesExchange released yesterday.

More than half of the investment -- or around $67 million -- will be allotted to the gold-copperDidipio mine in Nueva Vizcaya and other exploration activities.

At Didipio, capital expenditure (capex) is expected to be approximately $63 million,OceanaGold said.

It noted that the 2015 budget for Didipio already includes $23 million for undergrounddevelopment and $10 million for interconnection to the power grid.

The miner is also investing around $4 million for exploration activities in the Philippines.

In the event that additional exploration permits are granted in the Philippines, these activitieswould increase, the company said.

The remaining $33 million of its budget will go to its operations in New Zealand. That amount,the company explained, is much lower than the budget made in the previous years.

The reduction is a direct result of lower sustaining and capitalized mining costs at Macraesand at Reefton where the operation will transition into care and maintenance by the end of theyear, OceanaGold explained.

For next year, the company also expects increased gold production from its Didipio mine nextyear.

It sees production range of 100,000 to 120,000 ounces of gold and 21,000 to 23,000 tons ofcopper.

Likewise, its gold production in New Zealand is expected to hit between 195,000 and 215,000ounces.

After another year of strong production performance in 2014, we expect to continuedelivering significant value to our shareholders in 2015 through increased gold production fromour high quality Didipio operation, OceanaGold Managing Director and Chief Executive OfficerMick Wilkes said in the report.

Also a contributing factor next year would be the improved margins in New Zealand wherethe zero-cost collar hedges have ensured a meaningful cash margin despite the current weakgold price, according to Mr. Wilkes.

He added that 2015 is seen as a significant year with the commencement of Didipio minesunderground development, an activity that would enable access to the very high grade core ofthe ore body.

OceanaGolds flagship operation in the Philippines -- the Didipio Mine -- started commercialproduction in April 2013.

The miner is listed on the Australian, Toronto and New Zealand stock exchanges.

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