OceanaGold Corporation ((TSE:OGC)) has held its Q4 earnings call. Read on for the main highlights of the call.
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OceanaGold Corporation’s recent earnings call exuded a positive sentiment, highlighting record financial and operational achievements, significant reserve additions, and robust shareholder returns. However, the company acknowledged challenges such as ore hardness at Haile and production disruptions at Didipio, which remain areas of concern.
Record Production and Financial Performance
OceanaGold reported impressive figures with record quarterly and annual net profit, free cash flow, and production levels at Haile. The company achieved a notable free cash flow of $245 million in 2024, translating to a 15% after-tax yield on the enterprise value, underscoring its strong financial footing.
Reserve and Resource Increases
A significant achievement for OceanaGold was the 27% increase in its reserves net of mining depletion. This was bolstered by outstanding exploration results, particularly the addition of 1.2 million ounces at 9.2 grams per tonne gold from the Wharekirauponga ore body at Waihi.
Strong Dividend and Share Buyback Program
In a move reflecting confidence in its financial health, the Board approved a doubling of the annual dividend and authorized up to $100 million in share buybacks for 2025. This decision highlights the company’s commitment to delivering strong shareholder returns.
Operational Improvements at Waihi
Waihi showed significant operational improvements, delivering its best quarter since the Martha Underground began operating in 2021. The enhancements in remnant mining led to a notable reduction in all-in sustaining costs, boosting the site’s overall performance.
Challenges at Didipio
Despite its successes, OceanaGold faced challenges at Didipio, where production was hampered by lower mining rates due to stope redesign and severe weather events, including four typhoons, which delayed underground mining progress.
Ore Hardness Issues at Haile
At Haile, the company encountered unexpectedly hard ore, which slowed mining and processing rates. This difficulty contributed to higher costs and impacted the overall production growth, posing a challenge to the company’s operational efficiency.
Increased Costs and 2025 Guidance
Looking ahead, OceanaGold forecasts a higher all-in sustaining cost for 2025, estimated at $1,900-$2,050 per ounce. This increase is driven by higher stripping and maintenance costs, alongside inflationary pressures.
Forward-Looking Guidance
OceanaGold’s guidance for 2025 and 2026 indicates a trajectory of organic growth, with a 20% increase in gold production anticipated by 2026. This growth is expected to be supported by strategic investments in exploration and development, aligning with the company’s long-term objectives.
In summary, OceanaGold Corporation’s earnings call presented a mixed picture, with a largely positive sentiment due to record-breaking financial and operational achievements. However, challenges remain, particularly at Haile and Didipio, which the company must address moving forward. The guidance for the coming years suggests a promising outlook, with strategic growth and increased production on the horizon.
