OceanaGold Corporation announced Friday the start of commercial production at its Didipio mine in the Philippines, marked with an official opening.
The company commenced construction of the high grade gold copper mine in June 2011 with the first copper concentrate seeing production in last December.
The board of directors, having reviewed the monthly operating metrics and cost profile of the mine, determined that the effective date of commercial production is to be recorded as April 1 2013. Accordingly all revenues and operating costs will be reported from that point.
Based on the most recent NI 43-101 technical report for the project, the mine is forecast to produce an average of roughly 100,000 ounces of gold and 14,000 tonnes of copper in concentrate per year over an anticipated 16 year mine life.
The mine, located in Luzon, in the northern Philippines, is the first project in the country to be built and commence operations under the Financial or Technical Assistance Agreement (FTAA) structure. The FTAA between the company and the Philippines government stipulates that net revenue from the mine will be shared with the government, receiving 60 per cent of the net while 40 per cent goes to OceanaGold after the passing of an initial period of up to five years for the company to recoup its initial investment.
The company is standing by its production guidance for the mine, which calls for 50,000 to 70,000 ounces of gold and 15,000 to 18,000 tonnes of copper to be produced in 2013.
The mine itself boasts resources in the measured and indicated categories of 2.14 million ounces (Moz) of gold and 0.29 million tonnes (Mt) copper, with an additional resource of 0.43 Moz of gold and 0.07 Mt of copper in the inferred category and reserves of 1.68 Moz gold and 0.23Mt copper.
“This marks the official start to a very important chapter for OceanaGold as we transition into a multinational gold producer," said managing director and CEO Mick Wilkes, in a company statement accompanying the announcement.
"We have successfully progressed from first ore in the mills to commercial production in just over three months which is a great accomplishment. To date, more than 22,000 tonnes of copper gold concentrate has already been produced.”
The Melbourne-based gold producer has operations in New Zealand and Australia, but the new mine marks the company’s first incursion into the Philippines.
OceanaGold’s other assets include New Zealand's largest gold mining operation at the Macraes goldfield in Otago, and the Reefton open pit mine on the west coast of the South Island. The company also has a minority interest in the Junction Reefs joint venture exploration leases in New South Wales, Australia.
Combined production from the New Zealand and Philippine operations is expected to reach between 285,000 to 325, 000 ounces of gold in 2013.
(Source: Proactive Investors)