Q3 2024 OceanaGold Corp Earnings Call
One of the presentation, we will conduct a question and answer session. If at any time. During this call you need assistance. Please press star zero for the operator.
This call is being recorded on Thursday November seven 2024.
Rebecca Harry: Now, let's turn the conference over to Rebecca Harry Please go ahead.
Speaker Change: Good morning, and welcome to Oceana Gold's third quarter 2024 results webcast and conference call I'm, Rebecca Denari dress.
Speaker Change: Good morning, ladies and gentlemen, and welcome to the Oceana Gold Corporation Q3 2024 Earnings Conference Call.
Rebecca Harry: Director of Investor Relations.
Rebecca Harry: We are joined today by Gerri Bond, President and Chief Executive Officer, Mary <unk>, Chief Financial Officer, David Lund, Donyell, Chief operating Officer, Americas, and Peter Sharp, Chief Operating Officer Asia Pacific.
At this time, all lines are in listen-only mode.
Speaker Change: Following the presentation, we will conduct a question and answer session. If at any time during this call you need assistance, please press star zero for the operator. This call is being recorded on Thursday, November 7, 2024. Now let's turn the conference over to Rebecca Henare. Please go ahead.
Rebecca Harry: The presentation that we will be referencing during the conference call is available through the webcast and on our website.
Rebecca Harry: I'd also like to remind everyone that our presentation will be followed by Q&A session and we will be making forward looking statements. During the call. Please refer to the cautionary notes included in the presentation news release and MBNA as well as the risk factors set out in our annual information form.
Speaker Change: Good morning and welcome to Oceana Gold's third quarter 2024 results webcasting conference call. I'm Rebecca Henare, Director of Investor Relations.
Speaker Change: We are joined today by Jared Bond, President and Chief Executive Officer, Marius Niekerk, Chief Financial Officer, David Londono, Chief Operating Officer, Americas, and Peter Sharpe, Chief Operating Officer, Asia Pacific.
Speaker Change: All dollar amounts discussed in this conference call are in U S dollars I will now turn the call over to Jerry for opening remarks.
Jerry: Thank you Rebecca and thanks, everyone for joining the call today.
Jerry: I am pleased to say that ocean on the Gold's third quarter results were excellent from a production financial and growth perspective.
Speaker Change: The presentation that we will be referencing during the conference call is available through the webcast and on our website. I would also like to remind everyone that our presentation will be followed by a Q&A session.
Jerry: Total, we produced 37% more gold at a lower all in sustaining costs quarter on quarter.
Speaker Change: As we will be making forward-looking statements during the call, please refer to the cautionary notes included in the presentation, news release, and MD&A, as well as the risk factors set out in our annual information form. All dollar amounts discussed in this conference call are in U.S. dollars.
Jerry: All four operations delivered higher production at lower unit costs.
Jerry: This increase in gold production includes record quarterly production from Haile, which powered a significant reduction in <unk> costs and.
Jared: I will now turn the call over to Jared for opening remarks.
Jerry: It's strong free cash flow delivery.
Jared: Thank you, Rebecca, and thanks, everyone, for joining the call today.
Jerry: Together with record average realized gold prices <unk> ago generated an outstanding $66 million of free cash flow for the quarter.
Jared Bond: I'm pleased to say that Ocean Under Gold's third quarter results were excellent from a production, financial and growth perspective.
Jerry: This free cash flow does not include 10000 ounces of gold produced but not sold during the quarter.
Jared: In total, we produced 37% more gold at a lower all-in sustaining cost quarter-on-quarter.
Jerry: Our free cash flow margin of around $490 per ounce was derived on an average realized gold price of around $2500 per ounce.
All four operations delivered higher production at lower unit costs.
Speaker Change: This increase in gold production includes record quarterly production from hail, which powers a significant reduction in hail's oil and sustaining costs, and its strong free cash flow delivery.
Speaker Change: Gold processes new tire.
Jerry: We're expecting the fourth quarter to be our strongest for the year from both a production and cost perspective. So we are also expecting another strong quarter of free cash flow generation.
Speaker Change: Together with record average realized gold prices, Oceana Gold generated an outstanding 66 million dollars of free cash flow for the quarter.
Jerry: Our cash flow was deployed in line with our capital allocation framework in which we were able to self fund, our exciting exploration and growth opportunities repay debt and buy back shares under our new buyback program.
Speaker Change: This free cash flow does not include 10,000 ounces of gold produced but not sold during the quarter.
Speaker Change: Our free cash flow margin of around $490 pounds was derived on an average realized gold price of around $2,500 pounds.
Jerry: We also paid a semi annual dividend in October.
Jerry: In relation to exploration during the quarter, we shared some exciting drill results at <unk>, where we had a number of incredibly high grade intercepts.
Speaker Change: The gold price has since moved higher. We're expecting the fourth quarter to be our strongest for the year from both a production and cost perspective. So we are also expecting another strong quarter of free cash flow generation.
Jerry: Our exploration program also confirmed increasingly mineralization at the high grade <unk> deposit.
Jerry: And during the quarter, we were delighted to see the <unk> North project, which includes the <unk> deposit is included on the New Zealand government list of projects being considered for fast track consenting.
Speaker Change: Our cash flow was deployed in line with our capital allocation framework in which we were able to self fund our exciting exploration growth opportunities, repay debt and buy back shares under our new buy back program.
Jerry: We are progressing Hawaii North project pre feasibility study and are on track to finalize it by year end and we look forward to sharing the outcomes of these.
We also paid our semi-annual dividend in October.
Speaker Change: In relation to exploration, during the quarter we shared some exciting drill results at Hale, where we had a number of incredibly high-grade intercepts.
Jerry: Finally, and most importantly, we've made good progress on our safety improvement plan. Following the two fatalities at the <unk> as previously reported.
Speaker Change: Our exploration program also confirmed increased mineralization at the high-grade WKP deposit.
Jerry: The safety of everyone working at <unk> is the highest priority and we are focused on improving the effectiveness of our two core safety programs.
Speaker Change: And during the quarter we were delighted to see that the Waihi North project, which includes the WKP deposit, is included on the New Zealand Government's list of projects being considered for fast-track consenting.
Jerry: Increasing hazard identification training, particularly in relation to stored energy.
Jerry: And we have increased the level will be infield safety coaching at the DPA.
Speaker Change: We are progressing the Wahey North project pre-feasibility study and are on track to finalising it by year end and we look forward to sharing the outcomes of this.
Jerry: Our people have worked hard to deliver the operational and financial results we are reporting today.
Jerry: We are all committed to this being done safely.
Speaker Change: Finally, and most importantly, we've made good progress on our safety improvement plan following the two fatalities at the DIPIO as previously reported.
Speaker Change: I'll now turn the call over to Mario who will discuss the financial highlights.
Mario: Thank you Jared and good morning, everyone.
Mario: During the first quarter, we generated a record $345 million in revenue with realized gold prices, averaging around $2500 per ounce.
Speaker Change: The safety of everyone working at Oceana Gold is the highest priority and we are focused on improving the effectiveness of our two core safety programs, increasing hazard identification training, particularly in relation to stored energy, and we have increased the level of infield safety coaching at the DPO.
Jerry: Our net profit was $61 million and adjusted earnings per share was <unk> sales, which is in line with analyst consensus.
Speaker Change: Our people have worked hard to deliver the operational and financial results we are reporting today. We are all committed to this being done safely.
Jerry: This is more than double the <unk> <unk> per share in the previous quarter.
Jerry: AIC improved to 17% to $29 per ounce and 19% decrease from the prior quarter.
Speaker Change: I'll now turn the call over to Marius, who will discuss the financial highlights.
Thank you, Gerard, and good morning, everyone.
Jerry: Mainly driven by a 30% increase in gold sales volumes through increased production and an increase in byproduct credits.
Marius: During the first quarter we generated a record $345 million in revenue with realized gold prices averaging around $2,500 per ounce.
Speaker Change: As Jared mentioned, we achieved an important free cash flow inflection point for the business.
Marius: Our net profit was $61 million and adjusted earnings per share was $0.09 which is in line with analysts consensus.
Speaker Change: We generated $66 million of free cash flow during the quarter and close to $100 million year to date.
Marius: This is more than double the four cents per share in the previous quarter.
Jerry: This quarter's free cash flow was greater than the cumulative free cash flow generated in the first half of this year and the whole of last year combined.
Marius: AIC improved to $17.29 per ounce, a 19% decrease from the prior quarter.
Marius: mainly driven by a 30% increase in gold sales volumes through increased production and an increase in by-product credits.
Jerry: We expect a strong fourth quarter, which will further generate significant free cash flow.
Jerry: During the quarter and in line with our capital allocation framework, we repaid $14 million of date.
Speaker Change: As Gerard mentioned, we achieved an important free cash flow inflection point for the business.
Marius: We generated $66 million of free cash flow during the quarter and close to $100 million year-to-date.
Jerry: And bought back $3 2 million common shares at an average price of $3 47 Canadian appreciate.
Jerry: Our growing net cash position of $72 million allows us to advance our exciting exploration and growth opportunities and to improve shareholder returns.
Marius: This quarter's free cash flow was greater than the cumulative free cash flow generated in the first half of this year and the whole of last year combined.
Marius: We expect a strong fourth quarter which will further generate significant free cash flow.
Jerry: I will now turn the call over to David to discuss the whole operation.
David: Thank you Mario and Hello, everyone.
Marius: During the quarter, and in line with our capital allocation framework, we repaid $40 million of debt, and bought back 3.2 million common shares at an average price of $3.37 Canadian per share.
David Lund: <unk> produced record gold production in the third quarter with 64900 ounces, which in turn drove lower all in sustaining costs for the quarter.
Jerry: For the quarter was sourced from that better up in Pip.
Marius: Our growing net cash position of $72 million allows us to advance our exciting exploration and growth opportunities and to improve shareholder returns.
Jerry: <unk> at an average rate of 243 grams per tonne.
Jerry: Horseshoe underground.
Jerry: Today's underground tonnage at average rates of 694 grams per tonne.
Marius: I will now turn the call over to David to discuss the whole operation.
Speaker Change: Okay. So we were able to mine more ore that we've been able to process. During the quarter you gave us the flexibility to be ranked the highest grades through the meal, while continuing to build our ore stockpiles to be processed later.
Thank you, Marius, and hello, everyone.
David: Hay produced record gold production in the third quarter, with 64,900 ounces, which in turn drove lower oil sustaining costs for the quarter.
Speaker Change: We expect our fourth quarter production to be stronger than third quarter.
Marius: All for the Quarter was sourced from Leadbeater Open Pit, where we mine at an average grade of 243 grams per ton, and from Horseshoe Underground, where we increase underground tonnage at average grades of 624 grams per ton.
Jerry: <unk> annual guidance with continued access to high grade ore at the better our horseshoe.
Jerry: As a result.
Jerry: We expect all in sustaining costs to continue to reduce and bring us into our full year guidance range.
Marius: Since we were able to mine more ore than we were able to process during the quarter, it gave us the flexibility to direct feed the highest grades through the mill while continuing to build our ore stockpiles to be processed later.
Jerry: This quarter. We also released some exciting exploration results at Horseshoe and Horseshoe extension.
Jerry: The results support our goal of increasing resources close to our existing infrastructure in the underground operation.
Marius: We expect the four-quarter production to be stronger than the third quarter and achieve annual guidance with continued access to high-grade ore at Leadbeater and Horseshoe.
Jerry: We also released from our ongoing fuel results from a phase four which is currently in the mine plan as the last base a collaborative effort.
As a result,
Marius: We expect all in sustaining costs to continue to reduce and bring us into our four-year guidance range.
Jerry: With these results we're continuing to work on a tradeoff study.
Jerry: Right.
Jerry: Forward to remainder of better for you.
Marius: This quarter, we also released some exciting exploration results at Horseshoe and Horseshoe Extension.
Jerry: With us on a payment date or as an underground.
Speaker Change: I will now turn the call over to Peter to discuss Asia Pacific operations.
Marius: The results support our goal of increasing resources close to our existing infrastructure in the underground operation.
Peter Sharp: Thank you division and good morning, everyone.
Peter Sharp: During the quarter <unk> delivered gold production of approximately 28000 ounces and copper production of 3400 tons.
Marius: We also released some outstanding field results from leather phase 4, which is currently in the mine plan as the last phase of the leather drop-in phase.
Jerry: Production was higher than the previous quarter predominantly as a result of improved process plant availability.
Marius: With these results, we're continuing to work on a trade-off study to evaluate the best path forward to mine Leadbeater 4, whether as an open pit or as an underground.
Jerry: However experienced a significant storm event in early September with roughly 170 millimeters of rain falling in a three hour period, which was then followed by a number of other smaller rain events over the following week.
Marius: I will now turn the call over to Peter to discuss the Asia-Pacific operations.
Jerry: Access to the mine was restricted for several days over this period slightly impacting production performance. However, the unusual intensity of the storm did impact our exploration drill rigs located at the bottom of the mine with a REIT inflows exceeded our pumping capacity.
Thank you, David, and good morning, everyone.
Peter Sharpe: During the quarter, Didipio delivered gold production of approximately 28,000 ounces and copper production of 3,400 tonnes.
Peter Sharpe: Production was higher than the previous quarter, predominantly as a result of improved process plant availability.
Jerry: We made good progress towards our goal to increase the mining rates from underground during the quarter supported by the delivery of a new logo and a new truck and we still expect to achieve annualized run rates of 2 million ton per annum by the end of this year on our way to our target of two 5 million ton volume into 2026.
Peter Sharpe: The site, however, experienced a significant storm event in early September, with roughly 170mm of rain falling in a three-hour period, which was then followed by a number of other smaller rain events over the following week.
Peter Sharpe: Access to the mine was restricted for several days over this period, slightly impacting production performance. However, the unusual intensity of the storm did impact our exploration drill rigs located at the bottom of the mine, where the rain inflows exceeded our pumping capacity.
Jerry: <unk>.
Jerry: Increased production in the mornings and what areas are hoping to offset the impacts of slower mining rates in the high grade bridge areas of demand.
Jerry: Whilst we expect improved underground mining performance from the <unk> in the fourth quarter, we are not expecting an increase in average mine grade due to the lower rates of mining from the high grade bridge areas, which we noted with our second quarter results.
Marius: We made good progress towards our goal to increase the mining rates from underground during the quarter, supported by the delivery of a new loader and a new truck. And we still expected to achieve annualised run rates of 2 million tonne per annum by the end of this year, on our way to our target of 2.5 million tonne by the end of 2026.
Jerry: With this we have adjusted our 2020 full production guidance to 104000 ounces and 108000 ounces and as a result of the lower ounces and all in sustaining guidance is now $1000 to $1100 per ounce.
Marius: Increased production in the Monsonite areas are helping to offset the impacts of slower mining rates in the high grade breccia areas of the mine.
Marius: Whilst we expect improved underground mining performance from Didipio in the fourth quarter, we are not expecting an increase in average mine grade due to the lower rates of mining from the high-grade breccia areas, which we noted with our second quarter results.
Jerry: <unk> delivered another strong result during the quarter producing approximately 28000 ounces of gold.
Jerry: Access to ore in <unk> was achieved midway through the quarter improving grades to the mill and ore delivery from this pit is expected to continue through the entirety of the fourth quarter.
Marius: With this, we have adjusted our 2024 production guidance to 104,000 ounces and 108,000 ounces. And as a result of the lower ounces, our all-in sustaining guidance is now $1,000 to $1,100 per ounce.
Jerry: <unk> has performed in line with expectations year to date, and we expect it to be able to meet its original production guidance with increased production in the fourth quarter.
Jerry: Efforts to assess opportunities for additional mineralization at <unk> that could be economic at these higher gold prices. We spent an additional $800000 on drilling this quarter and expect to spend another $1 million of additional drilling in the fourth quarter.
Marius: McRae's delivered another strong result during the quarter, producing approximately 28,000 ounces of gold.
Marius: Access to ore in the Innisfil 7 open pit was achieved midway through the quarter. Improving grades to the mill and ore delivery from this pit is expected to continue through the entirety of the fourth quarter.
Jerry: While he produced around 14000 ounces of gold in the quarter an improvement over each of the first two quarters. This year.
Marius: Macraes has performed in line with our expectations year-to-date and we expect it to be able to meet its original production guidance with increased production in the fourth quarter.
Jerry: This was driven by slightly higher grades mined and improve compliance to plan and the remnant mining areas.
Jerry: We expect to be able to maintain these improvements going forward to drive a stronger fourth quarter.
Marius: In our efforts to assess opportunities for additional mineralisation in Macraes that could be economic at these higher gold prices, we spent an additional $800,000 on drilling this quarter and expect to spend another $1 million of additional drilling in the fourth quarter.
Jerry: Whilst we are pleased with the improvements we do not expect to fully recover the effects of the first half performance and as such we have revised Voorhees 2024 production guidance to 48 to.
Jerry: 52000 ounces and as a result of the lower ounces at all in sustaining cost guidance is now 2225 to 2000 and $375 per ounce.
Marius: Why he produced around 14,000 ounces of gold in the quarter, an improvement over each of the first two quarters this year.
Marius: This was driven by slightly higher grades mined and improved compliance to plan in the remnant mining areas.
Jerry: The longer term outlook for <unk> and will be updated as part of the updated technical report, which will be finalized by the end of the year.
Marius: We expect to be able to maintain these improvements going forward to drive a stronger fourth quarter.
Jerry: We particularly look forward to demonstrating in that study be upside that wip represents and how that will fit into the wahid plan longer term.
Marius: Whilst we are pleased with the improvements, we do not expect to fully recover the effects of the first half performance, and as such we have revised Waihi's 2024 production guidance.
Jerry: The excitement for <unk> pay has also been amplified by the naming of the <unk> North project last month, all the New Zealand government as a potential fast track project.
Marius: to 48,000 to 52,000 ounces and as a result of the lower ounces our all-in sustaining cost guidance is now $2,225 to $2,375 per ounce.
Jerry: With the latest announcement, we look forward to submitting our applications in the new year as we work towards their permits to develop a project in the coming years.
Marius: The longer term outlook for WAI will be updated as part of the updated technical report which will be finalised by the end of the year.
Jerry: I'll now turn the call back to Jerry.
Jerry: Thank you Peter.
Marius: We particularly look forward to demonstrating in that study the upside that WKP represents and how that will fit into the Waihi Plan longer term.
Speaker Change: So as you've heard our two largest operations Highland mccray's, representing around 70% of our total production are performing well and in line with guidance.
Marius: The excitement for WKP has also been amplified by the naming of the Waihi North project last month by the New Zealand Government as a potential fast track project.
Speaker Change: However for the reasons mentioned by Peter we are changing the guidance for both the <unk> and why.
Speaker Change: As a result full year consolidated gold production guidance is now expected to be around 4% below the bottom end of the original guidance range at 490 to 500000 ounces for the year.
Marius: With the latest announcement, we look forward to submitting our applications in the new year as we work towards our permits to develop the project in the coming years.
I'll now turn the call back to Gerard.
Speaker Change: This implies that we expect fourth quarter production to be the strongest quarter of the year at between 142, and 162000 ounces with stronger production expected from all sides.
Thank you, Peter.
Gerard: So as you've heard, our two largest operations, Hale and Macraes, representing around 70% of our total production, are performing well and in line with guidance.
Speaker Change: Copper production guidance remains unchanged.
Gerard: However, for the reasons mentioned by Peter, we are changing the guidance for both Dibio and Wahi.
Speaker Change: As a result of the lower expected gold production and a marginal increase in Capex, we updated the consolidated full year all in sustaining cost guidance, which is now expected to be 17, 25% to $18 $25 per ounce.
Marius: As a result, full year consolidated gold production guidance is now expected to be around 4% below the bottom end of the original guidance range at 480 to 500,000 ounces for the year.
Speaker Change: With a strong fourth quarter production result expected. We also expect fourth quarter consolidated all in sustaining cost to be the lowest of the year at between 40 816 50 per ounce.
Marius: This implies that we expect fourth quarter production to be the strongest quarter of the year, at between 142 and 162,000 ounces, with stronger production expected from all sites.
Speaker Change: Our total capital expenditure for the year has been updated and is now around $25 million or 5% above the original guidance range.
Marius: As a result of the lower expected gold production and a marginal increase in Capex, we updated the consolidated full year all in sustaining cost guidance, which is now expected to be 17, 25 to $18 $25 per ounce.
Corporate production guidance remains unchanged.
Marius: As a result of the lower expected gold production and a marginal increase in capex, we updated the consolidated full-year all-in sustaining cost guidance, which is now expected to be $17.25 to $18.25 per ounce.
Speaker Change: It is disappointing to have to change part of that guidance for 2024, particularly as we have delivered on production guidance for each of the preceding three years.
Marius: With a strong fourth quarter production result expected. We also expect fourth quarter consolidated all in sustaining cost to be the lowest of the year at between 1400, 16th 50 per ounce.
Jerry: Stepping back, though the case for <unk> on the gold remained strong.
Marius: With a strong fourth quarter production result expected, we also expect fourth quarter consolidated all in sustaining costs to be the lowest of the year, at between $1,400 and $1,650 per ounce.
Jerry: We have excellent organic growth prospects that we expect to be able to fund from substantial operating cash flows and from a net cash position.
Marius: At a total capital expenditure for the year has been updated and is now around $25 million or 5% above the original guidance range.
Marius: Our total capital expenditure for the year has been updated and is now around $25 million or 5% above the original guidance range.
Jerry: In summary.
Speaker Change: <unk> committed to creating and sustaining a safe workplace for everyone working reduction of gold.
Marius: It is disappointing to have to change part of that guidance for 2020 full particularly as we have delivered on our production guidance for each of the preceding three years.
Speaker Change: We have a tremendously talented and committed team we work hard to deliver our results and old shareholders can see today the outcomes of their reference.
Marius: It is disappointing to have to change part of our guidance for 2024, particularly as we have delivered on production guidance for each of the preceding three years.
Marius: Getting back, though the case for Oceana gold remains strong.
Speaker Change: We delivered strong production and substantial free cash flow generation in the third quarter, which further strengthened our balance sheet and increased our net cash position.
Speaker Change: We will continue to progress on our growth options and look to increase returns to shareholders through our existing dividend and now the share buyback program.
Marius: In summary, we remain committed to creating and sustaining a safe workplace for everyone working at Oceana Gold.
Speaker Change: We expect the fourth quarter to be our strongest of the year with higher production expected at all sites driving a lower all in sustaining costs.
Marius: We have a tremendously talented and committed team who work hard to deliver our results and all shareholders can see today the outcomes of their efforts.
Speaker Change: At today's gold prices, we expect this will translate into another strong quarter of free cash flow generation.
Marius: We delivered strong production and substantial free cash flow generation in the third quarter, which further strengthened our balance sheet and increased our net cash position.
Speaker Change: We look forward to providing further exploration updates and finalizing the Wahid North project.
Speaker Change: The pre feasibility study before the end of the year.
Marius: We will continue to progress on our growth options and look to increase returns to shareholders through our existing dividend and now the shared buyback program.
Speaker Change: I'll now hand, the call back to the operator.
Speaker Change: The line to any questions.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press the star followed by the one on your Touchtone phone you will hear prompted that Johan has been raised.
Marius: We expect the fourth quarter to be our strongest for the year, with higher production expected at all sites, driving a lower all-in sustaining cost.
Marius: At today's gold prices, we expect this will translate into another strong quarter of free cash flow generation.
Speaker Change: Should you wish to quit from the polling process. Please press star followed by the channel.
Speaker Change: And if you are using a speaker phone please lift the handset before pressing any case.
Marius: We look forward to providing further exploration updates and finalising the Wahi North project pre-feasibility study before the end of the year.
Speaker Change: Your first question comes from <unk> Habib Scotia Bank. Please go ahead.
Speaker Change: I'll now hand the call back to the operator and open the line to any questions.
Speaker Change: Thanks, Operator, hi, Gerard and shown a golf game.
Thank you.
Speaker Change: Congrats on a good quarter in achieving our free cash flow inflection point that we were all waiting for.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised.
Speaker Change: Just couple of questions from me.
Speaker Change: One drug you will have a couple of studies in the pipeline the Wahid North PFS.
Speaker Change: Should you wish to confirm the polling process, please press star followed by the 2. And if you are using a speakerphone, please lift the handset before pressing any keys.
Speaker Change: Including W. K B W.
Speaker Change: <unk> undergone PFS, you've got the Haile underground resource update.
Speaker Change: Including the Ledbetter tradeoff study coming up.
Speaker Change: Your first question comes from Oveis Habib at Sposha Bank. Please go ahead.
Speaker Change: I want to start off with the <unk> underground PFS.
Speaker Change: Thanks operator. Hi Gerard and Oceana Gold team. Congrats on a good quarter and achieving the free cash flow inflection point that we were all waiting for.
Speaker Change: Based on some of the challenging ground conditions that we are.
Speaker Change: Are you guys encountered within the breakfast stopes in Q2.
Speaker Change: How is that expected to impact the results of the PFS if any.
Just a couple of questions from me.
Speaker Change: Number one, Gerard, you have a couple of studies in the pipeline, the Wahi North PFS, that's including WKP, Didipio underground PFS, you've got the Hale underground resource update.
Speaker Change: Oh.
Speaker Change: Thanks <unk>.
Speaker Change: <unk> looked at the <unk> study.
Speaker Change: He is about increasing the rate of haulage of tonnes from underground, which will have the benefit of displacing low grade stockpiles. The breccia stope areas is a subset of the overall feed and so.
Speaker Change: Based on, you know, some of the challenging ground conditions that we or you guys encountered within the breccia stopes in Q2, how is that expected to impact the results of the PFS, if any?
Speaker Change: What were we mined from in the mind does not alter the study obviously will moderate the amount of high grade material that we bring into the mine plan.
Speaker Change: From.
Speaker Change: I appreciate I opened a few next few years to probably over the next four.
Speaker Change: Thanks, Ovaes. Look, the DiPio study is about increasing the rate of...
Speaker Change: Four to five years, so it spreads out.
Speaker Change: That excess to that high grade all but pleasingly the breccia stope redesign work make sure that we get all of that hardware at all so from a value perspective, the great design work redesign work, that's being done by the team to make sure that we get it all but the overall.
Speaker Change: Stope areas is a subset of the overall feed and so where we mine from in the mine does not alter the study. It obviously will moderate the amount of high-grade material that we bring into the mine plan.
Speaker Change: Work being done to increase the mining rate is on track and as Peter said by the end of <unk>, we expect to be at 2 million tonnes.
Speaker Change: from, you know, previously over the next few years to probably over the next...
Speaker Change: While material moved from <unk> on our way to the target of two 5 million tonnes. So in essence it doesn't.
Speaker Change: for the last four to five years. So it spreads out.
that access to that high-grade oil, but pleasingly the Breccia...
Speaker Change: The Grand conditions, we're experiencing doesn't change.
Speaker Change: Our fundamental goal of increasing <unk>. It just alters the mix of what comes out when.
Speaker Change: The great design work or redesign work that's been done by the team there. Make sure that we get it all
Speaker Change: Perfect. Thanks, a lot.
Speaker Change: But the overall work being done to increase the mining rate is on track and as Peter said by the end of this year we expect to be at 2 million tonnes.
Speaker Change: Around that drug and just.
Speaker Change: Again, where.
Speaker Change: In terms of the W. K P and I guess.
Speaker Change: Wahid North PFS.
Speaker Change: Obviously <unk> got onto the fast track this that was great to see.
Speaker Change: material moved from an underground on our way to the target of 2.5 million tonnes.
Speaker Change: What are the next steps for <unk> in terms of permitting.
Speaker Change: So, in essence, the ground conditions we're experiencing doesn't change our fundamental goal of increasing oil haulage, it just alters the mix of what comes out when.
Speaker Change: And how do you see walking kind of.
Speaker Change: Getting into this picture based on the fact that.
Speaker Change: While he has been having issues over the last I would say of your total.
Speaker Change: Yes look I think when we bring out that.
Speaker Change: Perfect. Thanks for the color on that, Gerard. And just, you know, again, we're...
Speaker Change: W. K Paigle Wahid North project PFS Youll see the flight path that we expect full wahid inside that study.
Speaker Change: In terms of the WKP and I guess, you know, Waheen North PFS, obviously, WKP going on to the fast track test, that was great to see. What are the next steps for WKP in terms of permitting? And, you know, how do you see Waheen kind of, you know,
Speaker Change: And so youll see.
Speaker Change: <unk> a.
Speaker Change: A flight Potful why he operations that reflect.
Speaker Change: Recent performance plus a bit of expected improvement.
Speaker Change: fitting into this picture based on the fact that, you know, Wahi has been having issues over the last, I would say, a year or two now.
Speaker Change: But the ultimate.
Speaker Change: Our goal is to make sure why he safely and profitably produces until we bridge into the old fleet from W. K P and as it relates to the Permian question I mean again I'll just go to the public comments from the New Zealand government I mean, we have been added to the list of fast track projects the government in New Zealand.
Yeah, look, it's, I think when we bring out that
W...
KP or Wahi North Project PFS, you'll see the...
Speaker Change: flight path that we expect for Wahi inside of that study and so you'll see likely a flight path for Wahi operations that reflect
Speaker Change: And as I said, they are looking to have that.
Speaker Change: Bill enabled inactive I should say by the end of this year and that would precede or naval I should say.
It's recent performance plus a bit of expected improvement.
Speaker Change: <unk>.
Speaker Change: Our submission formal submission of us being fast track project early in 2025, the government goes through that process and we'll all get to see what fast track means but our hope is by the end of 2025, we are.
Speaker Change: safely and profitably produces until we bridge into the oil field.
from WKP.
Speaker Change: And as it relates to the permitting question, I mean, again, I'll just go to the public comments from the New Zealand government. I mean, we have been added to the list of fast-track projects.
Speaker Change: Officially guided as a <unk>.
Speaker Change: Fast track project and that gives us <unk> and that is the starting point for this project. So.
Speaker Change: The government of New Zealand has said they're looking to have that.
Bill enacted by the end of this year.
Speaker Change: Global context, and the New Zealand government certainly doing all it can to make resource development in New Zealand faster than most other jurisdictions in the world.
and that would precede or enable, I should say, a
our submission.
Speaker Change: formal submission of us being a fast-track project early in 2025. The government then goes through that process
Speaker Change: Perfect. Thanks for that.
Speaker Change: Rather than just.
Speaker Change: That's it for my questions, but I just wanted to say congrats to David.
Speaker Change: and we'll all get to see what fast track means but you know our hope is by the end of 2025 we are
Speaker Change: The Haile team for.
Speaker Change: The ramp up of tail really good to see that thank.
Speaker Change: Thank you.
Speaker Change: fast-track project and that gives us our consents and that is our the starting point for this project. So in a global context the New Zealand government is certainly doing all it can to make resource development in New Zealand faster than most other jurisdictions in the world.
Speaker Change: Thank you I appreciate it.
Speaker Change: Thank you, ladies and gentlemen, as a reminder, should you have any questions. Please press star one now.
Speaker Change: The next question comes from Cosmos Shue O'shaughnessy. Please go ahead.
Speaker Change: Perfect. Thanks for that, Gerard. And just, you know, that's it for my questions, but I just wanted to say congrats to David and the HALE team for the wrap-up at HALE. Really good to see that. Thank you. Thank you. I appreciate it.
Speaker Change: Uh huh.
Speaker Change: CIBC still I don't know.
Speaker Change: That's changed.
Speaker Change: Hi, Gerry and team.
Speaker Change: Maybe my first question is on your.
Speaker Change: Guidance for Q4.
Speaker Change: Good to see that.
Speaker Change: Thank you, ladies and gentlemen. As a reminder, should you have any questions, please press star 1 now.
Speaker Change: It's going to be the best quarter of the.
Speaker Change: The year as projected.
Speaker Change: But you still given us a fairly sizable range 142 to <unk> 62000 ounces.
Speaker Change: The next question comes from Cosmos 2, Oceana Gold. Please go ahead.
Jarrett: You kind of touched on it Jarrett.
Speaker Change: Could you maybe highlight some of the key drivers that could either.
I.
Speaker Change: I'm CIBC still. I don't know if that's changed. Hi Jared and team.
Speaker Change: To the higher end of that range or the lower end of that range.
Speaker Change: Maybe my first question is on your guidance for Q4. Good to see that it's going to be the best quarter of the year as projected, but you've still given us a fairly sizable range.
Speaker Change: Thanks cause I'm not excited for a minute there thinking that you'd drawn.
Speaker Change: Sure on the gold.
Speaker Change: Look I mean mining isn't mining we have.
Speaker Change: Selected a range that we know we will satisfy and obviously our aspiration is to be in the upper end of that range and.
Speaker Change: 142 to 162,000 ounces. You kind of touched on it, Jared, but could you maybe highlight some of the key drivers that could either push you to the higher end of that range or the lower end of that range?
Speaker Change: There's no rocket science here.
Speaker Change: Good access to ore from both underground and open pit at all sites, having a plan that we execute on and making sure that whether it be weather or.
Speaker Change: Yeah.
Speaker Change: The reliability about maintenance programs to deliver availability and the process plant, we expect to be able to deliver the midpoint or above of that contract. So that's our goal, but things can happen, which is why we have a range.
Speaker Change: Thanks Coz. I got excited for a minute there, thinking that you'd joined Oceania Gold.
Speaker Change: Look, I mean mining is mining. We have selected a range that we know we will satisfy and obviously our aspiration is to be in the upper end of that range and there's no rocket science here with good access to oil from both underground and open pit at all sites.
Speaker Change: Of course.
Speaker Change:
Speaker Change: Jared as you mentioned your two larger assets.
Speaker Change: And the crave, they're performing very well.
Speaker Change: However, the <unk> and why either firstly on some issues.
Speaker Change: having a plan that we execute on and making sure that, you know, whether it be weather or, you know, the reliability of our maintenance programs to deliver availability in the process plans, we expect to be able to, you know, to deliver the midpoint or above of that guidance range. That's our goal. But, you know, things can happen which is why we have a range.
Speaker Change: And.
Speaker Change: Maybe could you talk about.
Speaker Change: These issues you've talked about these issue will detail, but I.
Speaker Change: I guess, what I'm trying to get to is at the appeal.
Speaker Change: Breakfast stopes financial with a bunch of cells and you needing to change our approach and why in the remnant areas.
Speaker Change: and many more. Thank you for watching. I'm your host, Rebecca Henare. I'll see you next time.
Of course.
Speaker Change: Is that.
Speaker Change: Is that permanent these these changes and approaches are they permanent and to the extent that you can share with us how will this impact your budgeting for next year as you look forward into 2025.
Jared, as you mentioned, your two larger assets.
Hale and McCrae, they're performing very well.
However, DiDipio and Waheed, there's been some issues.
Speaker Change: Sure.
Speaker Change: Maybe could you talk about, you know, these issues, you've talked about, you know, these issues in detail, but I guess what I'm trying to get to is, at the DDPO, the breccia stoves, the issue with the breccia stoves, and you needing to change your approach, and wahi, the remnant areas. Is that...
Speaker Change: I think.
Speaker Change: Every time, we learn more about our minds and that.
Speaker Change: And that will be reflected in the budget and the forecast that we gave for next year.
Speaker Change: I think there is a great story to be sure there at <unk>.
Speaker Change: Basically.
Speaker Change: The work that has been done.
Speaker Change: Is that permanent? You know, these changes and approaches, are they permanent? And, you know, to the extent that you can share with us, how will this impact your budgeting for next year as you look forward into 2025?
Speaker Change: Making sure that we get the most gold out of that mine over its life and as we explained last quarter the nature of that.
Speaker Change: Area of demand to purchase stopes.
Speaker Change: Is a little more fragmented and a little more brittle than what exists in the dominant part of the mine, which is a monzonite zone and so what the team has done a rightly identified that.
Speaker Change: That will be reflected in the budgets and the forecast that we give for next year.
Speaker Change: I mean, I think there's a great story to be shared there at the DiPio. Basically...
Speaker Change: A one size fits all approach to stoping.
Speaker Change: Most seductive because it was uniform, but it wasn't productive in terms of getting all the ore out of.
You know, the work that is being done...
Speaker Change: It is about making sure that we get the most gold out of that mine over its life. And as we explained last quarter, the nature of that area of the mine, the breccia stopes,
Speaker Change: The breccia area. So what they've done is size the stopes appropriately to make sure that it's safe for our people that we don't have the equipment loss and but most importantly that we get all of that high grade ore out. So its actually good mine design and as I've said before and as we said last quarter, yes that will spread the amount of high grade ore.
Speaker Change: All feeds in the breccia stopes over a longer period of time, but we will get it all out so thats actually good value work from.
Speaker Change: From a shareholder perspective, and then Wahid I mean, I think you've seen.
Speaker Change: Quarter on quarter improvement I think Peter said, we're going to have.
Speaker Change: And even stronger quarter in the final quarter.
Speaker Change: <unk> come out of a tough period of overwhelmingly having to mining remnant areas with a degree of unpredictability, but I think we're getting to the other side of that.
Speaker Change: On costs and I think youll see.
Speaker Change: As I said before in the Wahid North project pre feasibility study are new.
Speaker Change: Realistic in the more highly confident pathway for delivery from Y E until we reach into W. K P.
Speaker Change: Great. Thanks, Jarrett once again for answering my questions other questions I had.
Speaker Change: Thank you Charles.
Speaker Change: Thank you we have no further questions I will turn the call back over to John Bonn for closing comments.
John Bonn: Well. Thank you everyone that does conclude the webcast and the conference call replay will be available on our website later today on behalf of everyone at Ocean on a gold. We appreciate you for joining us and wish you a very pleasant rest of it.
John Bonn: Bye for now.
Speaker Change: Ladies and gentlemen. This concludes your conference for today, we thank you for participating and we ask that you. Please disconnect your lines.