The OceanaGold Corp (ASX: OGC) share price will be one to watch on Tuesday when the market reopens.
After the market close on Monday the gold miner provided its guidance for FY 2020.
What is OceanaGold expecting in FY 2020?
According to the release, the company expects to produce 360,000 to 380,000 ounces of gold in FY 2020. This compares to gold production of 470,601 ounces in FY 2019.
FY 2020’s guidance comprises 180,000 to 190,000 ounces from its Haile operation, 160,000 to 170,000 ounces from its Macraes operation, and 18,000 to 20,000 ounces from its Waihi operation. The company’s troubled Didipio operation has been excluded from its guidance.
Management expects to achieve this with cash costs of US$675 to US$725 an ounce and an all-in sustaining cost (AISC) of US$1,075 an ounce to US$1,125 an ounce. The latter is a touch higher than its FY 2019 AISC of US$1,061 an ounce.
The company’s Didipio operation in the Philippines has been suspended since late last year, but management revealed that it remains in a state of operational readiness while the FTAA renewal process continues to progress.
Once it is eventually fully ramped up again, the company expects Didipio to produce approximately 10,000 ounces of gold and 1,000 tonnes of copper per month at a site AISC of between US$700 and US$750 per ounce sold.
It is currently spending US$8 million to US$10 million a quarter on holding costs associated with maintaining the workforce in a state of operational readiness.
But should the renewal process be protracted beyond current expectations, and the company decides to transition into full care and maintenance, holding costs are expected to be in the order of US$3 million per quarter. Though, if this occurs, a ramp-up back to full production is likely to take up to 12 months, depending on the time until the renewal is granted.
The company’s President and CEO, Mick Wilkes, remains optimistic on Didipio.
He said: “In the Philippines, the FTAA renewal process continues to progress with the Office of the President currently reviewing the renewal. We remain actively engaged with key regulatory agencies and government officials, stakeholders from the communities and our employees. We continue to receive strong support for the FTAA renewal from the national and local governments and from the local communities.”
“More recently, approximately 1,200 members of the local Didipio and host communities including Indigenous Peoples travelled 10 hours each way to rally in support of the FTAA renewal, OceanaGold, the Didipio Mine and their livelihoods in front of the Presidential Palace in Manila. This unprecedented show of support was a humbling experience and a clear demonstration of the strong social license we have to operate in this remote, rural community in northern Philippines,” he concluded.
The post OceanaGold share price on watch after FY 2020 guidance appeared first on Motley Fool Australia.
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