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OceanaGold Corporation (OCANF) Q4 2022 Earnings Call Transcript

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OceanaGold Corporation (OTCPK:OCANF) Q4 2022 Earnings Conference Call February 21, 2023 10:00 AM ET

Company Participants

Brian Martin - Senior Vice President, Business Development and Investor Relations

Gerard Bond - President and CEO

Scott McQueen - Chief Financial Officer

David Londono - Chief Operating Officer, Americas

Scott Sullivan - Chief Technical and Projects Officer

Peter Sharp - Chief Operating Officer, Asia-Pacific

Craig Feebrey - Executive Vice President, Exploration

Conference Call Participants

Ovais Habib - Scotiabank

Cosmos Chiu - CIBC

Wayne Lam - RBC

Michael Parkin - National Bank

Operator

Good greeting and afternoon, ladies and gentlemen. And invited to nan OceanaGold 2022 Fourth Quarter Results Webcast and Conference Call. At this time, each subordinate lines are successful a listen-only mode. But pursuing nan presentation, we will behaviour a question-and-answer session. [Operator Instructions]

Also statement that this telephone is being recorded Tuesday, February 21st astatine 10 a.m. Eastern Time. And I would for illustration to move nan convention complete to Brian Martin. Please spell ahead.

Brian Martin

Good morning. Welcome to OceanaGold's 4th fourth and year-end 2022 results webcast and convention call. I americium Brian Martin, Senior Vice President of Business Development and Investor Relations. We are joined coming by Gerard Bond, OceanaGold's President and CEO; Scott McQueen, Chief Financial Officer; David Londono, Chief Operating Officer, Americas; Peter Sharp, Chief Operating Officer, Asia-Pacific; Scott Sullivan, Chief Technical and Projects Officer; and Craig Feebrey, Executive Vice President, Exploration.

We will beryllium referring a position during nan convention telephone that is disposable done nan webcast and connected our website. I would besides for illustration to punctual everyone that our position will beryllium followed by Q&A session.

As we will beryllium making forward-looking statements during nan call. Please mention to nan cautionary notes included successful nan presentation, news merchandise and MD&A arsenic good arsenic nan consequence factors set retired successful our yearly accusation form. All nan dollar amounts mentioned successful this convention telephone are U.S dollars unless different noted.

I will now move nan telephone complete to Gerard Bond for opening remarks.

Gerard Bond

Thank you, Brian. Good morning, everyone and convey you for joining america today. 2022 was a successful twelvemonth for OceanaGold, 1 that was marked pinch galore accomplishments. This first descent lists really we went against each of nan 5 pillars of our firm strategy. Our group are our astir valuable plus and their information is essential. So I'm very happy that 2022 was nan safest twelvemonth connected grounds for nan company.

Total recordable wounded wave complaint of 2.3 per cardinal hours worked. This debased wounded complaint reflects nan attraction our group are taking successful their regular activity some for themselves and each other, arsenic good arsenic nan effectiveness of our information activity programs. It's a awesome outcome, but we're not complacent and we stay ever vigilant successful keeping our group safe.

It's besides awesome to beryllium capable to opportunity that we delivered connected 2022 guidance. This was driven by nan Didipio successfully achieving its afloat target mining and processing rates up of schedule, and Haile delivering different beardown year, beating its accrued accumulation guidance.

In New Zealand, we had a challenging first half twelvemonth astatine Waihi, but we had a beardown 2nd half and are guiding to improved capacity successful 2023. At Macraes, we had immoderate weather-related downtime midyear, but rebounded pinch a very beardown 4th fourth results. Despite nan challenges successful 2022, it's worthy pointing retired that some New Zealand operations mixed to nutrient 25,000 ounces aliases $0.16 much than they did successful nan anterior year.

The 2nd pillar connected this descent is astir making judge we person nan correct civilization for america to present connected our potential. And we've made immoderate important steps guardant present pinch a revised institution imagination and values and immoderate measurable betterment successful worker turnover and organization relations. There person besides been immoderate fantabulous summation to our guidance team, which I'll talk astir a small later successful nan presentation.

From a maturation perspective, we successfully progressed our integrated maturation projects. At Haile, we are now afloat permitted for nan description and nan squad location are good underway astatine nan underground improvement and salary itself instruction. David will screen this later connected nan call. We besides released immoderate breathtaking exploration results successful December, highlighting nan fabulous excavation imaginable we person astatine Haile, nan Didipio and Wharekirauponga which Craig will talk astir successful much item later.

From a financial perspective, we had a very bully 2022. EBITDA was $392 million, 16% higher year-on-year contempt some golden and copper prices being little year-on-year. We were capable to advancement our maturation options and still generated meaningful free rate flow, which allowed america to further fortify our equilibrium expanse pinch a $68 cardinal simplification successful nett indebtedness complete nan years. This beardown equilibrium expanse underpins our expertise to turn nan business by executing connected our integrated maturation options. And we will stock pinch you coming really we spot that playing retired complete nan adjacent 3 years.

Our 3-year outlook is erstwhile again a compelling communicative of near-term accumulation growth, reducing all-in sustaining costs per ounce and free rate travel procreation potential. This beardown operational financial capacity successful 2022, together pinch nan assurance we person successful our outlook, underpin nan Board's determination to reinstate nan company's dividend policy.

We person declared a $0.01 per stock semi-annual dividend to beryllium paid successful nan 2nd quarter, showing our committedness to supply returns to shareholders. And from a marketplace standing perspective, we effected a number of tactical changes which person improved elder guidance proximity to investors and concentrated our registry successful North America. All what you spot successful this descent is successful work of our nonsubjective expanding and sustaining nan higher worth of OceanaGold and stock value appreciation enjoyed by shareholders successful 2022 was a pleasing reflection of nan strategy being executed.

Moving connected to our 3-year outlook. We task a accumulation maturation complaint of 9% per annum complete nan adjacent 3 years, which gets america to complete 600,000 ounces of golden by 2025. In addition, we’ve a projected diminution successful some portion costs and superior spending complete nan 3 years. Haile is nan superior maturation engine, though Waihi's accumulation maturation is besides projected to lend meaningfully. Sourcing higher people ore from nan underground and little worldly handling astatine Haile is simply a cardinal driver of nan portion costs simplification complete nan adjacent 3 years.

In 2023, we expect to nutrient betwixt 460,000 to 510,000 ounces of golden astatine an all-in sustaining costs of $1,425 to $1,525 per ounce. The guidance for 2023 has been impacted by nan very caller recognition of a request for preventive attraction connected 1 of nan shot mills astatine Macraes, which unluckily has decreased 2023 guidance by astir 15,000 ounces from what it would person different been. Peter Sharp, who I'm pleased to person connected today's telephone arsenic our comparatively caller Chief Operating Officer for nan Asia Pacific will talk much astir this later.

By 2025, we're projecting our all-in sustaining costs to beryllium betwixt $1,100 and $1,250 per ounce successful statement pinch an summation successful accumulation floor plan and nan projected simplification successful sustaining capital. Growth superior expenditures are besides expected to alteration complete nan adjacent 3 years arsenic expenditure connected Haile underground and aboveground description winds down. Together pinch precocious golden accumulation astatine little portion costs, this should successful move lead to important free rate travel procreation astatine existent golden prices complete our 3-year outlook period.

I'll past move connected to our 2022 afloat twelvemonth results and person a spot of an overview of this. As mentioned, our full recordable wounded wave complaint was an industry-leading 2.3 per cardinal hours worked and a grounds debased for nan company. We produced a small complete 472,000 ounces of golden astatine an all-in sustaining costs of $1,407 per ounce, reaching some our afloat twelvemonth accumulation and revised costs guidance ranges.

Our adjusted EPS was $0.21 per share. We generated $58 cardinal of free rate flow, and that's calculated aft repaying nan main and finance leases and we reduced our nett indebtedness by $68 million. In summary, it's a awesome consequence and a reflection of nan difficult activity put successful by everyone astatine OceanaGold.

I'll now manus nan telephone complete to Scott McQueen, our Chief Financial Officer, to supply an overview of our financial highlights and 2023guidance.

Scott McQueen

Thank you, Gerard, and bully morning, everyone. As you tin spot from nan barroom chart connected this slide, it is clear our business is trending successful nan correct guidance pinch year-on-year increases successful revenue, EBITDA and profitability, included grounds afloat twelvemonth gross of $967 cardinal successful 2022, which was a 30% summation comparative to nan anterior year.

Pleasingly, nan grounds gross reflects underlying operational capacity pinch higher accumulation and income driver of higher golden prices pinch nan 2022 mean golden value received somewhat little than nan erstwhile year. The underlying summation successful accumulation successful income came chiefly from a afloat twelvemonth of operations astatine Didipio, nan higher publication from nan New Zealand operations.

Fourth 4th gross was besides stronger, up 14% connected nan comparative 4th of 2021. The summation is chiefly owed to higher gross from Didipio pursuing nan restart of accumulation successful November 2021. Full twelvemonth EBITDA of $382 million, 16% supra nan anterior twelvemonth driven by higher income and revenue, partially offset by nan summation successful costs of sales, which again was chiefly attributable to nan afloat twelvemonth of operations astatine Didipio successful 2022.

EBITDA of $109 cardinal successful nan 4th fourth was besides a important summation compared to nan anterior 4th and nan corresponding play successful 2021. The summation comparative to nan erstwhile quarter, chiefly owed to higher income volumes, mixed pinch nan little costs of income and unrealized overseas speech gains.

Adjusted nett profit for nan twelvemonth was$148 million, including $29.9 cardinal successful nan 4th quarter. This equated to net per stock of $0.21 for nan afloat twelvemonth and $0.04 for nan 4th quarter, some of which were supra expert statement estimates of $0.18 and $0.01, respectively.

The institution generated $58 cardinal successful free rate travel successful 2022, $3 cardinal of which was successful nan 4th quarter. This, contempt upwind precluding nan transportation and waste conscionable complete 4,600 ounces of golden successful dore and Didipio during nan last week of nan year. 2022 free rate travel is calculated aft deducting finance lease main repayments.

Going forward, we are going to definitive free rate travel connected a pre-lease main repayment basis. This is much accordant pinch really others cipher free rate travel and aligns pinch our inclusion of each finance lease liabilities successful our nett indebtedness figures. We applied this updated calculation methodology to free rate travel successful 2022, our free rate travel would person been conscionable nether $88 million.

Our improved financial capacity successful 2022 has enabled nan institution to trim nett debt, inclusive of finance leases by 29% to $117 cardinal astatine year-end. This alteration nan company's leverage ratio by 38% to 0.45.During nan year, we repaid $100 cardinal against nan company's $250 cardinal revolving in installments facility, $50 cardinal of which was repaid during nan 4th quarter. As astatine nan 31st of December 2022, nan institution had an instantly disposable liquidity of $183 million, including $83 cardinal successful rate and nan $100 cardinal undrawn connected nan company's revolving in installments facility.

Moving connected to our 2023 guidance. On a consolidated basis, we expect to nutrient betwixt 460,000 and 510,000 ounces of golden and 12,000 to 14,000 tonnes of copper astatine an all-in sustaining costs of 1,425 to $1,525 per ounce. While accumulation is expected to summation connected 2022 levels, 2023 guidance has been impacted by nan precocious identified afloat issued shot mill rumor astatine Macraes, arsenic mentioned by Gerard. Peter will besides screen that successful much item later successful nan call.

Production is expected to beryllium adaptable complete nan people of 2023, and weighted much to nan first half of nan year, is driven chiefly by nan people floor plan astatine Haile. 2023 costs guidance is somewhat higher than 2022, reflecting inflationary pressures crossed nan industry, which led into nan afloat year's costs guidelines arsenic good arsenic nan effect connected accumulation of nan Macraes shot mill issue.

This year, Haile is expected to nutrient betwixt 170,000 and 185,000 ounces of gold, while all-in sustaining costs guidance remains level year-on-year astatine $1,500 to $1,600 per ounce. As antecedently noted, Haile accumulation floor plan is expected to beryllium much powerfully first half weighted arsenic mining continues successful nan higher-grade mill zone, which is scheduled for completion astir midyear.

At Didipio, accumulation is expected to amended comparative to 2022 pinch 2023 guidance of betwixt 120,000 and130,000 ounces of gold, 12,000 to 14,000 tonnes of copper, and all-in sustaining costs expected to scope betwixt $750 and $850 per ounce. Didipio's golden and copper accumulation is expected to beryllium comparatively evenly weighted passim nan year.

Cost summation year-on-year is chiefly a consequence of higher sustaining superior and grid proviso power costs arsenic good arsenic nan effect of inflation. After allowing for nan shot mill effect connected processing capacity, Macraes is expected to nutrient betwixt 120,000 to 135,000 ounces of golden astatine an all-in sustaining costs of betwixt $1,625 to $1,725 per ounce.

Finally, astatine Waihi, we expect to spot continued betterment successful 2023. The accumulation is expected to beryllium betwixt 50,000 and 60,000ounces of golden astatine an all-in sustaining costs of $1,400 to $1,500 per ounce. Production floor plan is expected to beryllium 2nd half weighted arsenic mining transitions to higher people material, mixed pinch an summation successful ore tonnes mined and milled.

Total group superior investments are expected to scope betwixt $305 cardinal and $350 million, pinch astir 50% of that attributable to capitalized mining costs. Majority of our 2023 maturation superior relates to nan improvement of nan Haile underground excavation pinch permitting process is now complete and improvement successful afloat swing.

We besides expect to walk betwixt $25 cardinal and $35 cardinal connected exploration successful 2023. Majority directed to expanding underground resources astatine Wharekirauponga and Waihi and astatine Haile. This successful conjunction pinch our 3-year outlook person fixed nan Board assurance to reinstate nan company's semiannual dividend argumentation pinch nan first dividend of $0.01 per stock payable successful April this year.

I'll now move nan telephone complete to David Londono to supply much accusation connected Haile's performance.

David Londono

Thank you, Scott, and bully morning, everyone. Haile exceeded its accrued afloat twelvemonth accumulation guidance for nan 2nd twelvemonth successful a row, delivering 2022 golden accumulation of 176,232 ounces. More importantly, we achieved this while decreasing our wounded wave complaint by 33% year-over-year to 1.8% astatine nan extremity of 2022. Gold accumulation successful 2022 benefited from affirmative tonnage and people reconciliation successful nan Phase I of nan Haile pit, starring to nan different capacity comparative to guidance ranges.

Fourth 4th golden accumulation of 21,533 ounces was amended than nan erstwhile 4th arsenic expected, chiefly from higher pit people excavation and processed coming from nan [indiscernible] pit. On nan mining side, we proceed to attraction connected optimizing nan excavation planned [indiscernible] arsenic portion of nan Haile method review.

Total worldly excavation successful nan 4th fourth was10.2 cardinal tonnes amended than nan erstwhile 4th owed to improved shovel [ph] productivity resulting from double-side loading implemented [indiscernible] better, which has translated into amended mining fleet productivities and utilization.

Total ore mined successful 2022 was 4 cardinal tonnes, higher than nan aforesaid play successful 2021 and this was a consequence of excavation sequencing, affirmative [indiscernible] reconciliation successful Phase 1 pit. Total mill fleet was 11% higher year-over-year mostly reflecting improvements successful nan processing works related to crusher and mill capacity and improved recoveries arsenic good arsenic continued attraction connected effective [indiscernible] presentation.

Fourth 4th mill waste of astir 836,000 tonnes was little from erstwhile quarter, caused by 5.5 days of nonaccomplishment processing clip owed to nan [indiscernible] occurred during nan past week of nan twelvemonth successful nan Eastern United States. The cognition continues to prolong accrued ace [ph] rates from solid fragmentation, improvements and much effective plants.

Haile performed this afloat twelvemonth all-in sustaining guidance, achieving $1,425 per ounce. However, year-over-year, all-in sustaining costs did summation owed to little sales, mixed pinch higher operating costs, mostly owed to ostentation driven summation successful consumables. Looking up to 2023, Haile is expected to nutrient betwixt 170,000 and 185,000 ounces, while costs guidance will stay level comparative to past twelvemonth pinch all-in sustaining costs expected to beryllium betwixt $1,500 and $600 per ounce.

At Haile, we besides expect a moving accumulation and costs floor plan successful 2024 and 2025 comparative to nan 2022 Haile method reappraisal wherever accumulation levels varied importantly complete this period. Talking astir nan Haile description , I'm very pleased to supply a prion pinch an update connected nan project.

At nan extremity of 2022, we received each nan basal permits and approvals to complete nan Haile description . With each this successful hand, we tin now afloat create nan underground excavation and grow nan operating footprint to let further discarded containment accommodation and expanded tailings retention capacity. To date, we’ve developed a full of 950 meters, of which 400 are connected nan accumulation diminution and a mixed 550 meters connected nan 2 ventilation portals. We proceed to safely advancement nan activity and consequence are containing nan crushed and is connected way for transportation successful nan 4th fourth of 2023. Construction successful nan 541 constituent and West PAG Stage 1 continued done January. Multiple contractors mobilized nan tract and began progressing connected aggregate scopes of activity including clearing, grading, aerial useful and groundwater tube installation. I'm besides pleased to opportunity that we are hosting an Analyst and Investor circuit astatine Haile adjacent week, wherever I'm very overmuch looking guardant to showcasing nan awesome activity that is being done by nan Haile team.

I will now move nan telephone complete to Peter Sharp to talk nan Didipio and our New Zealand assets.

Peter Sharp

Thank you, David. In 2022, nan Didipio cognition reported 0.74 recordable injuries per cardinal hours worked, a grounds champion astatine this operation. The Didipio reached its afloat target mining and milling rates up of schedule successful nan 2nd 4th of 2022 and met its afloat twelvemonth guidance by producing 113,198 ounces of golden for nan year, including29,104 ounces successful nan 4th quarter.

Full twelvemonth copper accumulation was 14,361 tonnes, including 3,476 tonnes successful nan 4th quarter. Total worldly mined for nan afloat twelvemonth was 1.7 cardinal tonnes, including 404,000 tonnes from nan 4th quarter. Mill provender for nan twelvemonth was 4 cardinal tonnes, a important summation comparative to 2021, pursuing nan restart of nan mill precocious successful nan 4th fourth of 2021.

Mill provender people was 1 gram a tonne of golden and 0.38% copper, somewhat higher than successful nan erstwhile 4th and accordant pinch nan variety successful nan underground excavation people per nan excavation plan. Mill provender creation for nan 4th fourth was astir 37% of underground ore and 63% from aboveground ore stockpiles.

The Didipio continues to make beardown margins pinch an all-in sustaining costs for nan twelvemonth of $637 per ounce and $1,061 per ounce successful nan 4th quarter. Notably, a 4,600 ounce dore shipment planned for waste successful December 2022 was not capable to beryllium completed owed to weather, which resulted successful little income and higher all-in sustaining costs for this quarter. However, this shipment has now been sold.

Last year, we received nan licence required to summation our processing rates to 4.3 cardinal tonnes per annum and we are presently investigating really to optimally usage this further capacity. Our preferred action is to summation nan underground mining rates to 2 cardinal tonnes aliases much per annum. And an optimization reappraisal is presently underway to measure really this tin beryllium achieved. Results from this reappraisal are expected successful 2023.

At Didipio, we are besides making important advancement pinch our outer stakeholders arsenic we proceed to amended our relationships pinch cardinal authorities and organization groups. A cardinal inaugural completed past twelvemonth was nan relocation of our main offers to nan Didipio excavation which will consequence successful each of nan section business taxes, which is astir $6 cardinal per annum, flowing to section governments and communities successful 2023.

Under our renewed financial aliases method adjunct agreement, our FTAA, we person besides implemented 2 caller streams of organization improvement funding, namely nan Community Development Fund and nan provincial improvement fund. The Community Development Fund is nan first of its benignant successful nan Philippines. This money was created to grow nan number of neighboring communities that person improvement backing from nan excavation and is governed by a steering committee comprising institution and organization representatives.

These group measure nan projected projects and guarantee that they are delivered successful statement pinch nan community's improvement goals. Importantly, each of nan costs associated pinch nan Community Development Fund and nan provincial improvement money programs are included successful our guidance figures for nan Didipio.

Now for an update connected our New Zealand operations. Macraes importantly improved its information grounds past twelvemonth pinch its wounded wave complaint decreasing by 35% compared to nan erstwhile year, down to 5.2 recordable injuries per cardinal hours worked. The cognition vanished is strong, producing 39,815 ounces of golden successful nan 4th quarter.

Annual golden accumulation was 143,672 ounces for 2022. 10% higher than nan erstwhile year, chiefly owed to higher tonnes milled and higher tonnes mined from some nan unfastened trim and nan underground operations. Total worldly mined successful nan 4th fourth was 12.5 cardinal tonnes, an summation from nan erstwhile 4th wherever excavation tonnage was impacted by grounds rainfall that occurred successful July.

The improvement rates astatine nan precocious established Golden Point Underground continued to amended passim nan quarter, and nan first stope ore tonnes mined were successful December. The cognition astatine Golden Point Underground is expected to scope afloat capacity during nan 2nd 4th of 2023, while Fraser's underground excavation is expected to complete operations astatine nan aforesaid time.

As pinch Didipio, an optimization reappraisal is presently underway astatine Macraes to summation underground mining rates, pinch nan results from this reappraisal besides expected successful 2023. For nan afloat year, Macraes recorded an all-in sustaining costs of $1,510 per ounce, a bully consequence fixed nan weather-related challenges which occurred midyear. As Gerard antecedently mentioned, accumulation guidance astatine Macraes for 2023 was impacted by astir 15,000 ounces owed to nan find of a ace successful nan provender and train successful 1 of our 2 shot mills successful our processing facility, which was identified during a planned full planned shutdown past week.

The Macraes squad is moving to create nan optimal betterment scheme to reinstate nan mill backmost into afloat operations. Contingency plans person been developed and immoderate [technical difficulty] effect connected production, including processing of higher-grade ore successful nan short-term to offset nan reduced mill provender rate.

Now for our Waihi operation. Why he besides importantly improved its information grounds past twelvemonth pinch its wounded wave complaint decreasing by 50% compared to nan erstwhile year, down to 3.1 recorded injuries per cardinal hours worked. Production besides importantly improved successful nan 2nd half of nan year, owed predominantly to improved assurance successful nan underground assets model, which allowed for much meticulous readying and adherence to plan.

Waihi met its revised guidance and produced 39,109 ounces of golden successful 2022, including 10,466 ounces successful nan 4th quarter. While accumulation decreased comparative to scheme successful nan 4th quarter, this was predominantly attributed to slower mining successful remnant mining areas during October, positive an unplanned mill outage during nan aforesaid month.

Importantly, nan mediocre capacity during October was not related to nan reconciliation challenges that occurred successful nan first half of nan year. With nan use of nan people power drilling programme being astir 18 months up of mining, it is expected that nan mining capacity and reconciliation accuracy will proceed to amended successful 2023 and beyond.

As pinch nan Didipio and Macraes, an optimization reappraisal is presently underway astatine Waihi to summation underground mining rates pinch results from this reappraisal besides expected successful 2023. Waihi's afloat twelvemonth all-in sustaining costs was $2,174 per ounce, while 4th fourth all-in sustaining costs was $2,035 per ounce.

Looking up to 2023, Waihi is expected to spot materially improved capacity pinch guidance betwixt 50,000 to 60,000 ounces astatine an all-in sustaining costs of betwixt $1,400 and $1,500 per ounce. Waihi arsenic it has knowledgeable abnormally precocious rainfall since nan opening of 2023, pinch complete 850 millimeters of rainfall successful January followed by complete 250 millimeters of rainfall successful nan first 2 weeks of February. This has impacted productivity successful underground mine, particularly successful nan remnant mining areas of Edwards and Empire West. However, connected nan anticipation that rainfall will moderate, nan institution expects immoderate first 4th accumulation impacts to beryllium recovered crossed nan equilibrium of 2023.

I will now move nan telephone complete to Scott Sullivan to talk astir advancement astatine Wharekirauponga.

Scott Sullivan

Thank you, Peter. Good morning, everyone. Last year, we took nan important measurement of lodging nan consent applications aliases permits pinch nan 2 section councils. The assembly has formally accepted our exertion is complete for processing and issued a number of requests for further accusation arsenic is normal process, which we will respond to up of nationalist consultation this year.

At nan completion of nan consultation stage, nan councilors will find nan general proceeding process for considering nan consent application. Target indicated assets size of 1.1 cardinal ounces has been wished arsenic optimal for nan first improvement plans, which supply improved excavation creation opportunities successful support of a pre-feasibility study owed to slower-than-expected drilling astatine Wharekirauponga successful 2022 related to drought conditions, nan institution is now targeting to lease NI4351-compliant PFS successful nan first half of 2024. Our existent -- connected existent schedules, we're expecting first ore from Wharekiraupongaa successful precocious 2031 pinch stoping afloat underway successful 2032.

I'll now move nan telephone complete to Craig Feebrey to talk astir exploration.

Craig Feebrey

Thank you, Scott. Our 2022 drill programs crossed nan group delivered beardown results supporting our attraction connected creating worth done near-mine assets conversion and growth. The Wharekirauponga, outstanding drilling assets continued arsenic reported successful December and shown successful this slide, including 73 grams per tonne golden complete 12.9 meters. Drill meters were down, however, hindered by mediocre upwind conditions and nan prioritization of hydrogeological drilling.

This year, our drilling astatine Wharekirauponga continues to attraction connected assets conversion pinch 2 rigs and 8,800 meters planned. Also astatine Martha Underground, 3 rigs are presently drilling pinch 5,000 meters forecast for Q1, contributing to some assets conversion and growth. At Haile, our attraction successful 2022 was nan Palomino underground target, wherever we drilled astir 10,000 meters successful 20 holes pinch a attraction connected converting nan remaining inferred assets to bespeak it successful support of an updated assets estimate and economical study.

We besides had respective exceptional results, including 6.8 grams per tonne golden complete 100 meters arsenic shown connected this section. Our extremity present is to person Palomino to reserve successful early 2024. Exploration expenditure astatine Haile this twelvemonth is expected to scope betwixt $6 cardinal and $8 cardinal pinch an accrued committedness to exploration drilling complete erstwhile years, focused connected assets conversion and replenishing nan underground target pipeline.

At Didipio, past year, our squad was successful successful discovering 2 near-mine mineralized structures adjacent to underground infrastructure, encouraging america this twelvemonth to perpetrate a further 26,000 meters to infill and extensional drilling pursuing up connected these and respective different privilege targets. Looking crossed our exploration pipeline, I'm very pleased we're continuing to put successful our exploration occurrence pinch a further $25 cardinal to $35 cardinal earmarked for 2023 pinch a attraction connected near-mine assets conversion and growth.

I'll now move nan telephone backmost to Gerard.

Gerard Bond

Thanks, Craig, and thanks, team. In summation to announcing beardown accumulation and financial results, I wanted to return nan opportunity to fto you cognize we've besides importantly strengthened our guidance squad recently. Today, I'm pleased to counsel that Michelle Du Plessis will subordinate america arsenic Chief People & Technology Officer connected nan first of March, a small complete a week away. Michelle has complete 25 years of acquisition successful quality resources translator and executive activity crossed aggregate industries and countries.

She joins america successful BHP, wherever complete her 15 years since she had galore operational and strategical roles. -- led a cross-functional betterment successful translator usability and astir precocious led world HR operations. As antecedently announced, [indiscernible] joined america arsenic Chief Sustainability Officer successful December past year. I deliberation it's a highly knowledgeable executive successful this area and brings to nan domiciled peculiar expertise successful societal performance, quality rights, ambiance change, situation and a scope of stakeholder engagement functions connected larger analyzable projects successful nan resources and building sectors.

And today, you heard from Peter Sharp for nan first clip who joined america arsenic Chief Operating Officer for nan Asia Pacific successful October of past year. OceanaGold has a stronger executive team, and we've besides made a number of cardinal appointments astatine different levels crossed nan organization. [Indiscernible] assurance that we tin thrust nan afloat worth imaginable of this business pinch a target civilization passim nan organization.

While we're proud of our 2022 accomplishments, there's still plentifulness of recruitment opportunity and months activity to beryllium done. Our attraction is connected taking responsible transportation and execution this twelvemonth and beyond. Maximizing nan free rate travel procreation of nan business and improving shareholder returns.

Our 3-year outlook represents an yearly accumulation maturation complaint of 9% per annum to complete 600,000 ounces of golden astatine 2025, pinch an anticipated betterment successful margins and declining superior spending, starring to a important summation successful projected free rate travel successful that period.

This maturation is adjacent mine, little consequence and integrated pinch nan spread description connected way to present a important summation successful golden accumulation complete nan adjacent 3 years. We will besides proceed to put successful nan breathtaking exploration opportunities we person crossed nan portfolio pinch a attraction connected near-mine, precocious return targets astatine nan Didipio, Haile and we spot tremendous upside.

I'll now manus nan telephone backmost to nan usability and unfastened up nan statement to return immoderate questions.

Question-and-Answer Session

Operator

[Operator Instructions] And your first mobility will beryllium from Ovais Habib astatine Scotiabank. Please spell ahead.

Ovais Habib

Thanks, operator. Congrats, Gerard and OceanaGold squad connected nan Q4 hit and gathering nan afloat twelvemonth guidance. Gerard, conscionable a mates of questions for me. Just starting off, nan first 1 is regards to nan 3-year guidance. Gerard, tin you constituent to immoderate consequence and besides immoderate benignant of areas that you person added conservatism to this guidance?

Gerard Bond

Well, Ovais, acknowledgment for nan question. Look, I mean there's ever capacity consequence crossed immoderate golden mine. But I deliberation we position it arsenic balanced from a consequence perspective. We do person programs successful spot to thrust improved capacity crossed nan portfolio. And I've spoken astir those before. We person immoderate signature programs successful plus management, procurement and continuous improvement, each of which we we'll beryllium implementing ore [indiscernible] process of implementing to thrust amended accumulation and costs outcomes that are successful nan numbers, but that each remains to beryllium captured. So it's a -- we position it arsenic a very credible, realistic floor plan of what we tin execute and Obviously, our occupation is to hit it.

Ovais Habib

Perfect. And conscionable successful regards to nan 2023 guidance that accumulation is weighted much powerfully to nan first half of nan year. Should we besides presume CapEx is besides weighted towards nan first half of nan twelvemonth arsenic well?

Gerard Bond

[Indiscernible] let's Scott McQueen grip nan CapEx mobility because that's -- I dislike to reline nan opportunity to reply your question. But yes, nan first half is somewhat weighted to beryllium much accumulation dense arsenic a consequence of fundamentally Haile people presentation. Scott, do you want to reply nan CapEx floor plan question?

Scott McQueen

Thanks, sir. Good morning. It is really somewhat first half weighted chiefly pinch immoderate carryover from 2023 pinch nan hold successful nan [indiscernible], but not hugely little to nan accumulation profile.

Ovais Habib

Got it. Thanks for that. And past my last mobility is possibly for David. At Haile, now you've completed -- I retrieve proceeding astir 400 meters astatine nan accumulation decline. Any antagonistic aliases affirmative surprises, David, that you've seen arsenic nan diminution continues to progress?

David Londono

Hi, bully morning. No, I deliberation we recovered a small spot much banal to worldly astatine nan opening of nan 4th and astir apt much h2o than expected and that was a consequence of dense rains during nan period of January and astatine precocious successful nan year. But [indiscernible] -- that was connected nan first 200 meters. After that, nan worldly is turning backmost to what we were expecting.

Ovais Habib

Okay. Thanks for that David. That’s for me, that’s for me. Again, acknowledgment for taking my questions.

Gerard Bond

Thanks, Ovais.

Operator

Thank you. Next mobility will beryllium from Cosmos Chiu astatine CIBC. Please spell ahead.

Cosmos Chiu

Thanks, Gerard and team, and acknowledgment for a very bully position here. Maybe my first mobility is successful New Zealand. As you talk astir Macraes, there's nan ace successful nan tronian. Just wondering, wherever are you astatine this constituent successful time, does it request to beryllium replaced? And if it needs to beryllium replaced, what are nan proviso chains? How do they look for illustration successful New Zealand? And past nan different portion is conscionable to confirm, it sounds for illustration you person 2 barroom mills, 1 barroom mills impacted. So I would ideate you're still processing ore astatine this constituent successful time. What's nan throughput astatine this constituent successful clip compared to tally rate?

Gerard Bond

Thanks, Cosmos. I'll fto Peter reply nan mobility arsenic it relates to nan ace successful nan milling grade. Just a reminder that nan effect we person successful narration to this is 15,000 ounces from what it mightiness person different been. And I think, arsenic Peter said successful his prepared remarks that we do spot nan expertise to usage nan caller Europe and nan ordering of nan fleet people to minimize nan impact. But Pete, do you want to talk astir nan mobility -- reside nan questions crossed Montana?

Peter Sharp

Sure. Thanks, Gerard, and acknowledgment for nan question, Cosmos.

Cosmos Chiu

Hi, Peter.

Peter Sharp

[Indiscernible] was picked up. The ace that was identified during nan afloat works shutdown was successful nan provender extremity of nan tuning of nan shot mill arsenic we talked about. It's a forecast provender in. So nan Shell and Trane 1 unit. And what we are looking astatine doing is yet a afloat twelvemonth -- nan last hole will beryllium to trim that trunnion disconnected and really bolt connected a replacement trunnion which is thing that is rather communal successful those bore mills. So we're getting superior engineering support retired of -- opens retired of Australia. But we are looking to your constituent astir nan proviso issues. We are looking if we tin to get arsenic overmuch support from successful New Zealand itself, from engineering firms pinch nan backup support from Hoffmans who are nan method experts. So we --while we person a rather a, I think, a reasonable grip now connected nan existent methodology for repair, it's still evidently going done a afloat review. So that's why astatine this stage, nan estimate of effect is astir 15,000 ounces.

I deliberation nan 2nd mobility was what is nan wide impact. So for Macraes, there's 2 shot mills, there's 2 SAG mills astatine afloat operation, they've tally astatine astir 730 tonnes per hr we've been capable to [indiscernible] immoderate of nan interest tube activity truthful that we tin tally nan remaining 3 mills arsenic 1 SAG and 2 shot mills. And were impacted by astir 200 tonnes per hour. But 1 of nan affirmative things astir Macraes is location is simply a substance of different grades of ore, nan alert people from nan underground immoderate mean people from nan unfastened trim and immoderate little people besides from nan unfastened cut. So nan longer this goes on, we are seeing nan expertise to assistance mean interest grade, truthful it minimizes effect arsenic well.

Cosmos Chiu

Great. Thanks for elaborate answer. [Indiscernible] possibly switching gears to Waihi. As you talked about, 2022 was good. It sounds for illustration it was okay, but 2023 is going to proceed to amended from 39,000 ounces past twelvemonth to 45,000 to 55,000 ounces successful 2023. Two parts, I guess, Q1 2023 impacted by rainfall. I look to callback that was besides an rumor successful Q1 2022. Have you learned? Is location thing that we tin do astir dense rainfall, person you done thing other this twelvemonth compared to past year? And past nan 2nd portion is, yes, it's improving year-over-year. But is nan 45,000 to 55,000 ounces benignant of dependable stake, and we -- is that now benignant of -- I look to callback that previously, it sewage arsenic precocious arsenic 70,000 to 80,000 ounces. I'm conscionable wondering if 45,000 to 55,000 ounces wherever we should settee at. But it doesn't sound for illustration because I deliberation antecedently you talked astir immoderate optimization studies that you besides person successful spot astatine Waihi. So if you tin reside each those questions, that would beryllium great.

Peter Sharp

Sure. Gerard, did you want maine to conscionable [indiscernible] aliases do you want to?

Gerard Bond

Peter, convey you. So firstly, nan guidance for 2023 is 50,000 to 60,000 ounces of gold. So conscionable to beryllium clear connected that. The mobility astir nan rainfall. Look, 1.1 meters of rainfall successful 6 weeks is highly unusual. And I don't deliberation immoderate excavation underground aliases unfastened trim is not going to beryllium affected by that amount of rain. You mightiness person seen that cyclone Gabriel impacted nan North Island of New Zealand conscionable complete a week ago. I was location past week astatine Waihi and I must say, I was conscionable very impressed pinch really actually, well, it was managed from some aboveground runoff position and underground h2o perspective. So I deliberation nan squad has surely done a awesome occupation learning from history astir that. That said, location is an unfastened trim that sits straight supra nan underground and h2o does provender from nan unfastened trim into nan underground. Now we are still looking astatine ways of minimizing that h2o getting into nan underground. So each early tin beryllium mitigated. But I will say, again, nan activity that's been done is -- it looks -- it doesn't look for illustration they conscionable had 1.1 meters of rainfall successful nan past 6 weeks. Just region there. Was location immoderate different questions?

Cosmos Chiu

Yes, nan tally rate. Yes, Peter, successful position of like, arsenic you said, acknowledgment for correcting maine connected nan production. I was looking astatine CapEx. But is that a bully tally complaint successful position of what you're guiding to successful position of 2023? Is that -- tin I conscionable return my spreadsheet and adjacent to 2023 for nan remainder of time? Or are you looking for higher production?

Gerard Bond

Sure. So nan absorbing point astir why he is nan mean mining complaint is astir 1 cardinal tonnes per annum, and that's what is presently successful nan forecast. But what we spot complete clip is that nan percent of ore versus nan percent of discarded does increase. So successful 2023, we've sewage astir a 50-50 blend of bid waste, which intends that there's conscionable nether 500,000 tonnes of ore milled. But successful nan early years, location is much ore mined than what -- truthful we do spot an uplift successful golden production. At Waihi, successful nan adjacent mates of years, and that's portion of our 3-year guidance. But predominantly, it's astir that ratio of ore to discarded arsenic opposed to an wide uplift successful nan underground mining performance. But what we are doing, arsenic I mentioned, astatine each of our 3 operations successful Asia Pacific is undertaking nan assessment, really do we really assistance wide production, which for Waihi especially, will automatically move into much tonnes milled. That’s right.

Cosmos Chiu

Great. Maybe 1 last mobility and possibly backmost to Gerard. I don't want to contradict you person a very bully opportunity to reply questions, Gerard. Your dividend, it's awesome to spot that. You've now reinstated nan dividend. It useful out, if my mathematics is correct, to astir 0.8% dividend yield. What's your longer-term reasoning successful position of dividend? Is location a target that you're trying to get to? How should we deliberation astir that?

Gerard Bond

Yes. Thanks, Cosmos. And look, we're arsenic gelato beryllium backmost to paying dividends. I said it early successful my tenure, existent business has paid dividends. So we're backmost into nan position of being capable to do so. We deliberation that by putting a dividend retired there, it puts nan shareholder astatine nan money of nan Q for nan rate that's generated by nan business .But I deliberation for now and complete nan adjacent short play of time, I mean, we've sewage truthful overmuch maturation up of us. I deliberation that group should beryllium happy to spot a dividend, but it's not -- we don't person a target per se beyond nan dividend argumentation arsenic it stands. And we person each avenue unfastened to america successful nan early arsenic and erstwhile we advancement nan accumulation maturation and nan costs simplification that we put retired coming to either summation it aliases move to stock buybacks impact different forms of superior return. So we -- I want to make it clear that we're very keen to amended and summation returns to shareholders. But nan dividend argumentation is $0.01 per stock semiannually, and that's -- that's it for now. But plentifulness of scope arsenic you would person seen, for that to alteration arsenic and erstwhile those rate flows eventually.

Cosmos Chiu

Great. Thanks guys for answering my questions, and we look guardant to nan remainder of 2023.

Gerard Bond

Thanks Cosmos.

Operator

Next mobility will beryllium from Wayne Lam astatine RBC. Please spell ahead.

Wayne Lam

Yes. Thanks, guys. Just wondering for nan costs look -- costs outlook, it looks beautiful bully complete nan adjacent fewer years, particularly into 2025. Just wondering if that $300 an ounce betterment successful ASIC into 25 includes immoderate exemplary tail disconnected successful ostentation astatine nan different mines? Or what's benignant of driving that betterment successful costs floor plan extracurricular of nan Haile underground?

Gerard Bond

Yes, I'll nan grip nan first portion --- extracurricular of nan Haile underground, well, Haile on is nan superior driver of it, right? So that's -- and past obviously, it's Waihi lift, we get a batch of leverage there, too. It had an AISC successful nan 2000 this year. And naturally, arsenic we assistance to nan target quantum adjacent twelvemonth and past beyond, arsenic Peter said, there's a bully woody of leverage. But nan Haile is nan superior driver, some volumetrically and besides from a costs position and Waihi.

From a value outlook figure, I'll fto Scott McQueen reply that arsenic well. We're not projecting thing beyond what you would spot successful nan guardant curve for immoderate worldly input costs, whether that beryllium energy, nan alloy making materials grinding nan for illustration successful our costs base. We do person a afloat twelvemonth of nan inflationary impacts this twelvemonth arsenic opposed to, say, half twelvemonth nan twelvemonth has gone. But we're not baking successful further summation ostentation beyond that. What you would spot successful nan guardant curves of immoderate varying costs. Scott McQueen, thing to add?

Gerard Bond

No, that's correct. Here are exceptions there. Wayne, connected immoderate large measurement down successful cost. And arsenic Gerard mentioned earlier, our strategical pillars see a attraction connected procurement continuous betterment successful plus management. And arsenic we mentioned earlier, those opportunities aren't yet baked into nan plan. So it's a beautiful achievable outcome. And actually, we tin purpose to do better.

Alexia Howard

Okay, great. Thanks. And past possibly connected nan accumulation outlook, is nan little 2024 guidance purely driven by smoothing successful nan floor plan astatine Haile? Or are location different incremental improvements we should beryllium reasoning about, for illustration expanded capacity astatine nan Didipio? Or an summation astatine Macraes? And past conscionable successful position of that soft floor plan astatine Haile, should we conscionable benignant of return an mean of nan '24, '25 floor plan astir nan 210,000 ounce level?

Gerard Bond

It's a small different to that. Wayne, I mean, fundamentally -- and we made it very clear erstwhile we put retired nan [indiscernible] reappraisal past year. There was a very lumpy 24, .25. You've seen astir 60,000 ounces spell retired of 24 and 25, it's up by astir 70%. And that's a merchandise of a mates of things. One, we stayed successful 1 of nan pits successful '22 longer than we expected. So you've sewage a statement scheme modulation issue, often for illustration a smoothing opportunity. And past there's conscionable for illustration an optimization of nan excavation plan. So overall, nan method study remains intact owed to seeing a shifting of nan style of accumulation successful nan near-term, which is not astonishing if anyone looked astatine what that floor plan looked astatine a twelvemonth agone erstwhile we put retired that report. But different than that, why he is will beryllium a measurement up successful '24 from '23, each different things being equal, but everything other should beryllium astir flat.

Wayne Lam

Okay, great. Thanks. And past possibly conscionable past 1 astatine Macraes. Have you seen immoderate akin effect successful position of rainfall and flooding successful nan South? And conscionable connected nan 3-year outlook, does that see a comparatively level accumulation floor plan location astir 130,000 ounces? Or is location a script wherever that excavation benignant of bounces backmost into nan 150,000 ounce scope successful nan future?

Gerard Bond

I will fto Peter return nan 2nd half. The first half, we did -- conscionable a reminder, successful nan September quarter, we did study that we were heavy impacted by rainfall successful nan period of July. We had grounds rainfall successful July there. So that was an impact. Peter, conscionable connected nan multiyear apple.

Peter Sharp

Sure. Thanks, Gerard. But conscionable to reply connected nan January, February rainfall importantly impacted successful North Island, but nan South Island wasn't impacted by that important rain. Generally speaking, Macraes is simply a comparatively level outlook. So not looking astatine a large number of increases astatine this shape arsenic portion of our guardant guidance, however, arsenic I said, we are evidently looking astatine ways of expanding underground production, which evidently is overmuch higher people than nan stockpiles aliases nan unfastened cut. So immoderate use that we tin get retired of those optimization reviews will travel done to higher outlook. But astatine this stage, it's comparatively flat.

Wayne Lam

Okay, perfect. That’s each for me. Thanks, guys.

Gerard Bond

Thanks, Wayne.

Operator

[Operator Instructions] And your adjacent mobility will beryllium from Mike Parkin astatine National Bank.

Michael Parkin

Thanks, guys and congrats connected nan bully quarter. Just 1 follow-up mobility connected what's happening pinch nan shot mill astatine nan grade. The15,000 ounce impact, is that solely being budgeted based disconnected nan reduced throughput? Or person you budgeted successful a imaginable effect connected nan replacement aliases I guess, amended clarity, are you moreover moving it now aliases basically, that's my question.

Gerard Bond

Yes. Well, we're not moving that shot mill now, Mike, because it's authorities -- and nan 15,000 ounce effect connected nan guidance that we put retired for '23 is inclusive of each nan measures that Peter said astir some our estimate to impact a repair aliases replacement. -- and nan mitigated effects of optimizing nan provender grade. And altering nan 2nd [indiscernible] still get nan shot mill and nan [indiscernible] optimally.

Wayne Lam

Okay. Thanks truthful much.

Gerard Bond

Thanks, Mike.

Operator

Thank you. And astatine this time, we person nary different questions registered. Please proceed pinch closing remarks.

Gerard Bond

Well, look, acknowledgment to everyone for joining america connected nan call. That concludes nan webcast. A replay will beryllium disposable connected nan website later today. On behalf of nan full guidance squad and everyone astatine OceanaGold, I admit you joining america and wish you each a pleasant remainder of nan day.

Operator

Thank you. Ladies and gentlemen, this does so reason your convention telephone for today. Once again, convey you for attending. And astatine this time, we do inquire that you please disconnect your lines.

Editor: Naga



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