OceanaGold Announces Waihi Production and Cost Guidance; Lowers Consolidated Cost Guidance for 2015

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(All amounts in this media release are expressed in United States dollars unless otherwise indicated)

MELBOURNE, 31 August 2015 /CNW/ - OceanaGold Corporation (TSX/ASX/NZX: OGC) (the "Company") is pleased to release the attributable production and cost guidance for the second half of 2015 at the Waihi Gold Mine ("Waihi").

With the inclusion of Waihi's in the Group's production for the second half of 2015 (assuming completion of the transaction), the overall Group consolidated production for 2015 is expected to significantly increase while All-In Sustaining Costs ("AISC") is expected to decrease. As a result, the Company has revised its consolidated 2015 guidance to include adjustments that reflect lower copper and diesel prices and a weaker New Zealand dollar for the second half of 2015.

The Waihi transaction remains subject to New Zealand regulatory approval and legal completion will occur after receipt of approval from the Overseas Investment Office ("OIO").  At completion the Company will assume the economic benefits and costs associated with Waihi from July 1, 2015.*

Key Highlights

• Waihi production guidance range of 65,000 – 70,000 ounces of gold for the second half of 2015.
• Waihi cash cost guidance range of $490 – $520 per ounce sold with AISC guidance range of $650 to $680 per ounce sold.
• Consolidated annual production guidance range increased to 380,000 – 410,000 ounces of gold.
• Consolidated annual cash cost guidance range decreased from $450 – $530 per ounce sold to $420 – $470 per ounce sold.
• Consolidated AISC annual guidance range decreased from $770 – $840 per ounces sold to $690 – $740 per ounce sold.
• Adjusted annual production guidance ranges for Didipio and Macraes and Reefton.

Mick Wilkes, Managing Director and CEO commented, "The inclusion of the economic benefit from Waihi not only increases our production but also further reduces our unit cost base. Waihi is a solid asset in a highly prospective gold region that will generate significant free cash flows and further insulate our business in a lower gold price environment." He added, "Upon legal closing of the transaction, we will commence an optimisation study aimed at further reducing costs, increasing productivity, increasing reserves and extending the mine life."

Table 1 – Revised OceanaGold 2015 Production and Cost Guidance

	Gold Production	Copper Production	Cash Costs	All-In Sustaining Costs
	ounces	tonnes	$ per ounce	$ per ounce
Didipio	105,000 – 120,000	22,000 – 23,500	(150) – (100)	230 – 280
Macraes & Reefton	210,000 – 220,000	–	740 – 790	980 – 1,030
Waihi	65,000 – 70,000	–	490 – 520	650 – 680
Consolidated	380,000 – 410,000	22,000 – 23,500	420 – 470	690 – 740

In addition to the production from Waihi, the Company has adjusted its cash cost and AISC guidance ranges for Didipio and Macraes and Reefton to account for changes to its macro-economic inputs. As a result, the Company has lowered its copper price assumption from $2.70/lb. to $2.30/lb., NZD:USD exchange rate assumption from 0.78 to 0.65 and diesel price assumption from $0.70/L to $0.60/L for the second half of 2015.

The Company has also adjusted its annual production guidance ranges for Didipio and Macraes and Reefton to reflect first half of 2015 results and expected output for the second half. As a result, Didipio's annual production guidance range for gold has been adjusted to 105,000 to 120,000 ounces (from 100,000 to 120,000 ounces) and for copper to 22,000 to 23,500 tonnes (from 21,000 to 23,000 tonnes). For Macraes and Reefton, the annual gold production guidance range has increased from 195,000 to 215,000 ounces to 210,000 to 220,000 ounces.

For the remainder of the year and effective July 1, 2015, the Company expects $5 million – $7 million in capital expenditure on exploration drilling, which is included in the AISC figures in Table 1.  

Subsequent to the June quarter end, the Company announced that it had increased its revolving credit facility from $125 million to $225 million at similar financial terms and covenants with a new maturity date of June 30, 2018. The Company will draw down on this credit facility to finance the approximate $101 million acquisition cost of Waihi.

Mr. Wilkes added, "Over the last two months, the Company has worked closely with Newmont, the Waihi operation and local stakeholders to ensure a smooth transition upon the legal completion of the transaction. We look forward to welcoming the highly experienced and successful Waihi workforce to the OceanaGold team. We will continue to work very closely with our valued stakeholders at Waihi by building and fostering new and existing relationships and maintaining continuous and open communications. We will showcase our history and proven track record of operating and developing sustainably while demonstrating our strong focus to be a partner, employer and mining company of choice."

* This production and cost guidance assumes the completion of the Waihi transaction before the end of 2015 and provides guidance on production and costs as if Waihi was a fully owned subsidiary of the Company from 1 July 2015 (which will be the effective commercial position as the Company will assume the economic benefit and costs of Waihi from July 1, 2015).  Please note that the Company's Financial Statements will reflect an alternative presentation with ownership of Waihi being recorded for accounting purposes from the date of closing of the transaction, and not July 1, 2015, but with the benefit of economic ownership from July 1, 2015 to the closing of  the transaction being recorded as an adjustment to the net assets of the newly acquired subsidiary.

About OceanaGold

OceanaGold Corporation is a significant multinational gold producer with mines located in New Zealand and the Philippines. The Company's assets encompass New Zealand's largest gold mining operation at the Macraes Goldfield in Otago which is made up of the Frasers and Coronation open pits and the Frasers underground mine. On the west coast of the South Island, the Company operates the Reefton Open Pit mine. At the end of April 2015, the Company announced the acquisition of the high quality Waihi Gold Mine located on the North Island of New Zealand where the transaction is expected to close in the third quarter of 2015. In the Philippines, OceanaGold owns and operates its flagship operation, the Didipio Gold-Copper Mine located on the island of Luzon. OceanaGold has a pipeline of organic growth and exploration opportunities in the Australasia and Americas regions. On July 29, 2015, the Company announced the proposed acquisition of Romarco Minerals Inc. whose principal asset is the world-class Haile Gold Mine which is currently in construction and located in South Carolina, United States

OceanaGold has operated sustainably over the past 25 years with a proven track record for environmental management and community and social engagement. The Company has a strong social license to operate and works collaboratively with its valued stakeholders to identify and invest in social programs that are designed to build capacity and not dependency.

In 2015, the Company expects to produce and attribute 380,000 to 410,000 ounces of gold from the combined New Zealand and Didipio operations and produce 22,000 to 23,500 tonnes of copper from the Didipio operation. 

OceanaGold is listed on the Toronto, Australian and New Zealand stock exchanges under the symbol OGC.

Cautionary Statement for Public Release

Certain information contained in this public release may be deemed "forward-looking" within the meaning of applicable securities laws. Forward-looking statements and information relate to future performance and reflect the Company'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 OceanaGold Corporation 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 the Company's most recent Annual Information Form prepared and filed with securities regulators which is available on SEDAR at www.sedar.com under the Company's name. There are no assurances the Company can fulfil forward-looking statements and information. Such forward-looking statements and information are only predictions based on current information available to management as of the date that such predictions are made; actual events or results may differ materially as a result of risks facing the Company, some of which are beyond the Company's control.  Although the Company believes that any forward-looking statements and information contained in this press release is 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. The Company 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.

SOURCE OceanaGold Corporation

Investor Relations - Toronto, Sam Pazuki, Tel: [phone]; Media Relations - Melbourne, Andrea Atell, Tel: [phone], [email protected], www.oceanagold.com, Twitter: @OceanaGold