Sponsored Video at PDAC: OceanaGold pushes growth on multiple fronts

Key Concepts

• Waihi North Project: A newly permitted, high-grade underground gold project in New Zealand.
• Haile Gold Mine: Oceana Gold’s flagship US asset undergoing a transition to multi-zone underground mining.
• All-In Sustaining Costs (AISC): A metric used to measure the total cost of producing an ounce of gold.
• Organic Growth: Expanding production through internal exploration and project development rather than acquisitions.
• Capital Allocation: The strategic distribution of financial resources between operational improvements, exploration, and shareholder returns.

1. Waihi North Project (New Zealand)

The Waihi North project received life-of-project permit approval on December 18. This project is critical to the company’s long-term growth profile.

• Technical Specifications: The project features an "invisible mine" design with no surface expression. It involves a 6.5 km drift to the ore body and a 4 km transport route to the existing process plant.
• Resource Quality: The deposit contains 1.2 million ounces of gold at 9 g/t, with an additional 800,000 ounces at 17 g/t.
• Strategic Value: By utilizing existing infrastructure and a supportive local workforce with 150 years of mining history, the project is expected to extend the life of the Waihi operation for decades.
• Exploration Upside: The permit allows for a doubling of drill rigs and an increase in drill pads, enabling the company to convert resources to reserves and expand the total resource base.

2. Haile Gold Mine (USA)

The Haile mine is undergoing a significant operational transition to increase production and efficiency.

• Underground Expansion: The company is moving from open-pit mining to a multi-zone underground strategy.
  • Horseshoe Underground: Currently in operation.
  • Palomino Underground: Scheduled for ore production in 2028.
  • Ledbetter Underground: Recently approved for development, with ore production expected in 2029.
• Performance Targets: By 2026, Haile is projected to produce 245,000 ounces of gold annually, making it the fourth-largest gold mine in the USA.
• Financial Impact: The transition is expected to yield a 35% increase in gold production and a 25% reduction in AISC, with production costs estimated at $1,600 per ounce.

3. Operational Strategy and Jurisdictional Risk

CEO Jared Bond emphasized a balanced approach to operating across four countries (USA, Philippines, New Zealand, and others).

• Jurisdictional Mix: 45% of production is expected from the USA by 2026, with 40% from New Zealand.
• Operational Philosophy: The company maintains a "residential" workforce model at all sites, which Bond argues fosters higher commitment and care.
• Risk Management: The company avoids complex financial instruments, specifically noting: "We don't have any pre-pays. We have no hedges. We have no royalty financings."

4. Capital Allocation and Shareholder Returns

Oceana Gold focuses on converting gold price gains into bottom-line profitability and direct shareholder value.

• Shareholder Returns: In the previous year, the company returned over $200 million to shareholders via buybacks and dividends.
• Future Commitments: For 2026, the company has committed to a dividend three times higher and a buyback program twice as large as the previous year.
• Reinvestment: Despite increased shareholder returns, the company has increased growth capital by 2.5x and exploration expenditure by 50%, while simultaneously strengthening the balance sheet.

Synthesis and Conclusion

Oceana Gold is executing a strategy of "organic growth" by leveraging existing infrastructure and high-grade underground deposits. The company’s transition at the Haile mine and the permitting of the Waihi North project serve as the primary pillars for increasing production and lowering costs. By maintaining a clean balance sheet (no hedges or royalty financing) and prioritizing capital returns, the company aims to demonstrate that it can simultaneously fund aggressive exploration, develop new projects, and provide significant cash returns to shareholders. As CEO Jared Bond noted, the company’s focus remains on "running our business better" and "allocating capital wisely" to ensure long-term profitability.