Preliminary Results of the Didipio Optimisation Study

OceanaGold Announces Preliminary Results of the Didipio Optimisation Study
MEDIA RELEASE
12 September 2014
(All figures in US Dollars unless otherwise stated)
(MELBOURNE) OceanaGold Corporation (TSX/ASX/NZX: OGC) (the “Company”) announced today the preliminary results of the Didipio Optimisation Study (the “Study”), a project that has identified significant value from the existing operation and ore body. The Study is expected to be finalised early in the fourth quarter with completion of an updated National Instrument (“NI”)43-101 Technical Report.
Key Outcomes
• Underground development to be brought forward by one year to commence in the first quarter 2015.

• Access to high grade ore to be brought forward by two years with first underground production now expected to be in the third quarter of 2017 with full ramp-up to a mining rate of 1.6 million tonnes per annum (“Mtpa”) by 2020.

• Redesigned underground to include two underground mining domains that will increase the mine productivity rate to 1.6 Mtpa (from 1.2 Mtpa) over a longer underground mine life.

• Improved geotechnical understanding, optimized open pit design and revised open pit/underground interface will reduce open pit waste mining by nearly 70 million tonnes (Figure 3) whilst only reducing ore supplied from the open pit by approximately one year.

• Improved project economics including increased cash flows and a longer mine life – to be finalized in the updated NI 43-101 Technical Report.
Mick Wilkes, Managing Director and CEO said, “On behalf of the Board of Directors, I am pleased to announce the positive outcomes from the Didipio Optimisation Study. With nearly 18 months of commercial operations, we have identified significant value from the Didipio Mine that will be unlocked through increased metal production; improved operating cash flows; as well as a significant reduction in waste mined combined with earlier access to higher grade underground ore.”
Based on the results of the Study, the underground portion of the Didipio operation will be brought forward by one year with development expected to commence in the first quarter of 2015 subject to receiving final regulatory approvals. Access to high grade ore will be brought forward by two years with first ore delivered for processing in the third quarter of 2017. The underground crown pillar will now be established at RL2460 (Figure 1), approximately 80 metres higher than in the original plan thus allowing for two active production areas in the underground resulting in an increase of the mining productivity rate to 1.6 Mtpa and a reduction in the cut-off grade. Additionally, the detailed Study along with a comprehensive infill drill program during the last 12 months has resulted in the expansion of the underground by 170 meters deeper than originally planned to RL2010 (Figure 1).

"Commencing the underground operation earlier than originally planned enables faster access to the high grade ore that resides in the underground reserves of the ore body. It also allows us to carry out further exploration at depth where we believe high grade mineralisation continues below the extent of the current drilling,” Mr. Wilkes said.
As a result of the Company’s increased understanding and confidence in the geotechnical attributes of the mine, the open pit has been redesigned with a reduced Stage 6 pit shell resulting in the elimination of nearly 70 million tonnes of waste over the life of mine.
The Board of Directors has endorsed the Study including the earlier commencement of the underground mine development, resource definition drilling and redesigned open pit. The Company will seek the required approvals to commence the development of surface facilities, including the portal and ventilation infrastructure in the first quarter of 2015. Under the optimised underground design, the pre-production capital cost is now estimated to be approximately $110 million over a three-year period (2015-2017) and sustaining capital expenditure over the life of the underground mine is expected to average $7 to $8 million per annum.
Mr. Wilkes added, “Over the coming months, the Company will invest in additional resource definition drilling for resource conversion and to further prove out the ore body. The Company will release an updated NI 43-101 Technical Report that will include the final results and an update to the Reserves and Resources statement for Didipio.”
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