Earnings Transcript for OCANF - Q4 Fiscal Year 2022

Operator: Good morning and afternoon, ladies and gentlemen. And welcome to the OceanaGold 2022 Fourth Quarter Results Webcast and Conference Call. At this time, all participant lines are in a listen-only mode. But following the presentation, we will conduct a question-and-answer session. [Operator Instructions] Also note that this call is being recorded Tuesday, February 21st at 10 a.m. Eastern Time. And I would like to turn the conference over to Brian Martin. Please go ahead.

Brian Martin: Good morning. Welcome to OceanaGold's fourth quarter and year-end 2022 results webcast and conference call. I am Brian Martin, Senior Vice President of Business Development and Investor Relations. We are joined today by Gerard Bond, OceanaGold's President and CEO; Scott McQueen, Chief Financial Officer; David Londono, Chief Operating Officer, Americas; Peter Sharp, Chief Operating Officer, Asia-Pacific; Scott Sullivan, Chief Technical and Projects Officer; and Craig Feebrey, Executive Vice President, Exploration. We will be referring a presentation during the conference call that is available through the webcast and on our website. I would also like to remind everyone that our presentation will be followed by Q&A session. As we will be making forward-looking statements during the call. Please refer to the cautionary notes included in the presentation, news release and MD&A as well as the risk factors set out in our annual information form. All the dollar amounts mentioned in this conference call are U.S dollars unless otherwise noted. I will now turn the call over to Gerard Bond for opening remarks.

Gerard Bond: Thank you, Brian. Good morning, everyone and thank you for joining us today. 2022 was a successful year for OceanaGold, one that was marked with many accomplishments. This first slide lists how we went against each of the five pillars of our corporate strategy. Our people are our most valuable asset and their safety is essential. So I'm very happy that 2022 was the safest year on record for the company. Total recordable injury frequency rate of 2.3 per million hours worked. This low injury rate reflects the care our people are taking in their daily work both for themselves and each other, as well as the effectiveness of our safety leadership programs. It's a great outcome, but we're not complacent and we remain ever vigilant in keeping our people safe. It's also great to be able to say that we delivered on 2022 guidance. This was driven by the Didipio successfully achieving its full target mining and processing rates ahead of schedule, and Haile delivering another strong year, beating its increased production guidance. In New Zealand, we had a challenging first half year at Waihi, but we had a strong second half and are guiding to improved performance in 2023. At Macraes, we had some weather-related downtime midyear, but rebounded with a very strong fourth quarter results. Despite the challenges in 2022, it's worth pointing out that both New Zealand operations combined to produce 25,000 ounces or $0.16 more than they did in the prior year. The second pillar on this slide is about making sure we have the right culture for us to deliver on our potential. And we've made some important steps forward here with a revised company vision and values and some measurable improvement in employee turnover and community relations. There have also been some excellent addition to our management team, which I'll talk about a little later in the presentation. From a growth perspective, we successfully progressed our organic growth projects. At Haile, we are now fully permitted for the expansion and the team there are well underway at the underground development and pay itself instruction. David will cover this later on the call. We also released some exciting exploration results in December, highlighting the fabulous mine potential we have at Haile, the Didipio and Wharekirauponga which Craig will talk about in more detail later. From a financial perspective, we had a very good 2022. EBITDA was $392 million, 16% higher year-on-year despite both gold and copper prices being lower year-on-year. We were able to progress our growth options and still generated meaningful free cash flow, which allowed us to further strengthen our balance sheet with a $68 million reduction in net debt over the years. This strong balance sheet underpins our ability to grow the business by executing on our organic growth options. And we will share with you today how we see that playing out over the next 3 years. Our 3-year outlook is once again a compelling story of near-term production growth, reducing all-in sustaining cost per ounce and free cash flow generation potential. This strong operational financial performance in 2022, together with the confidence we have in our outlook, underpin the Board's decision to reinstate the company's dividend policy. We have declared a $0.01 per share semi-annual dividend to be paid in the second quarter, showing our commitment to provide returns to shareholders. And from a market rating perspective, we effected a number of tactical changes which have improved senior management proximity to investors and concentrated our register in North America. All what you see in this slide is in service of our objective increasing and sustaining the higher value of OceanaGold and share price appreciation enjoyed by shareholders in 2022 was a pleasing reflection of the strategy being executed. Moving on to our 3-year outlook. We project a production growth rate of 9% per annum over the next 3 years, which gets us to over 600,000 ounces of gold by 2025. In addition, we’ve a projected decline in both unit costs and capital spending over the 3 years. Haile is the primary growth engine, though Waihi's production growth is also projected to contribute meaningfully. Sourcing higher grade ore from the underground and lower material handling at Haile is a key driver of the unit cost reduction over the next 3 years. In 2023, we expect to produce between 460,000 to 510,000 ounces of gold at an all-in sustaining cost of $1,425 to $1,525 per ounce. The guidance for 2023 has been impacted by the very recent identification of a need for preventive maintenance on one of the ball mills at Macraes, which unfortunately has decreased 2023 guidance by around 15,000 ounces from what it would have otherwise been. Peter Sharp, who I'm pleased to have on today's call as our relatively new Chief Operating Officer for the Asia Pacific will talk more about this later. By 2025, we're projecting our all-in sustaining costs to be between $1,100 and $1,250 per ounce in line with an increase in production profile and the projected reduction in sustaining capital. Growth capital expenditures are also expected to decrease over the next 3 years as expenditure on Haile underground and surface expansion winds down. Together with high gold production at lower unit costs, this should in turn lead to significant free cash flow generation at current gold prices over our 3-year outlook period. I'll then move on to our 2022 full year results and have a bit of an overview of this. As mentioned, our total recordable injury frequency rate was an industry-leading 2.3 per million hours worked and a record low for the company. We produced a little over 472,000 ounces of gold at an all-in sustaining cost of $1,407 per ounce, reaching both our full year production and revised cost guidance ranges. Our adjusted EPS was $0.21 per share. We generated $58 million of free cash flow, and that's calculated after repaying the principal and finance leases and we reduced our net debt by $68 million. In summary, it's a great result and a reflection of the hard work put in by everyone at OceanaGold. I'll now hand the call over to Scott McQueen, our Chief Financial Officer, to provide an overview of our financial highlights and 2023guidance.

Scott McQueen: Thank you, Gerard, and good morning, everyone. As you can see from the bar graph on this slide, it is clear our business is trending in the right direction with year-on-year increases in revenue, EBITDA and profitability, included record full year revenue of $967 million in 2022, which was a 30% increase relative to the prior year. Pleasingly, the record revenue reflects underlying operational performance with higher production and sales driver of higher gold prices with the 2022 average gold price received slightly lower than the previous year. The underlying increase in production in sales came mainly from a full year of operations at Didipio, the higher contribution from the New Zealand operations. Fourth quarter revenue was also stronger, up 14% on the comparative quarter of 2021. The increase is mainly due to higher revenue from Didipio following the restart of production in November 2021. Full year EBITDA of $382 million, 16% above the prior year driven by higher sales and revenue, partially offset by the increase in cost of sales, which again was mainly attributable to the full year of operations at Didipio in 2022. EBITDA of $109 million in the fourth quarter was also a significant increase compared to the prior quarter and the corresponding period in 2021. The increase relative to the previous quarter, mainly due to higher sales volumes, combined with the lower cost of sales and unrealized foreign exchange gains. Adjusted net profit for the year was$148 million, including $29.9 million in the fourth quarter. This equated to earnings per share of $0.21 for the full year and $0.04 for the fourth quarter, both of which were above analyst consensus estimates of $0.18 and $0.01, respectively. The company generated $58 million in free cash flow in 2022, $3 million of which was in the fourth quarter. This, despite weather precluding the delivery and sale just over 4,600 ounces of gold in dore and Didipio during the final week of the year. 2022 free cash flow is calculated after deducting finance lease principal repayments. Going forward, we are going to express free cash flow on a pre-lease principal repayment basis. This is more consistent with how others calculate free cash flow and aligns with our inclusion of all finance lease liabilities in our net debt figures. We applied this updated calculation methodology to free cash flow in 2022, our free cash flow would have been just under $88 million. Our improved financial performance in 2022 has enabled the company to reduce net debt, inclusive of finance leases by 29% to $117 million at year-end. This decrease the company's leverage ratio by 38% to 0.45.During the year, we repaid $100 million against the company's $250 million revolving credit facility, $50 million of which was repaid during the fourth quarter. As at the 31st of December 2022, the company had an immediately available liquidity of $183 million, including $83 million in cash and the $100 million undrawn on the company's revolving credit facility. Moving on to our 2023 guidance. On a consolidated basis, we expect to produce between 460,000 and 510,000 ounces of gold and 12,000 to 14,000 tonnes of copper at an all-in sustaining cost of 1,425 to $1,525 per ounce. While production is expected to increase on 2022 levels, 2023 guidance has been impacted by the recently identified full issued ball mill issue at Macraes, as mentioned by Gerard. Peter will also cover that in more detail later in the call. Production is expected to be variable over the course of 2023, and weighted more to the first half of the year, is driven mainly by the grade profile at Haile. 2023 cost guidance is slightly higher than 2022, reflecting inflationary pressures across the industry, which led into the full year's cost base as well as the effect on production of the Macraes ball mill issue. This year, Haile is expected to produce between 170,000 and 185,000 ounces of gold, while all-in sustaining cost guidance remains flat year-on-year at $1,500 to $1,600 per ounce. As previously noted, Haile production profile is expected to be more strongly first half weighted as mining continues in the higher-grade mill zone, which is scheduled for completion around midyear. At Didipio, production is expected to improve relative to 2022 with 2023 guidance of between 120,000 and130,000 ounces of gold, 12,000 to 14,000 tonnes of copper, and all-in sustaining costs expected to range between $750 and $850 per ounce. Didipio's gold and copper production is expected to be relatively evenly weighted throughout the year. Cost increase year-on-year is primarily a result of higher sustaining capital and grid supply energy costs as well as the effect of inflation. After allowing for the ball mill impact on processing capacity, Macraes is expected to produce between 120,000 to 135,000 ounces of gold at an all-in sustaining cost of between $1,625 to $1,725 per ounce. Finally, at Waihi, we expect to see continued improvement in 2023. The production is expected to be between 50,000 and 60,000ounces of gold at an all-in sustaining cost of $1,400 to $1,500 per ounce. Production profile is expected to be second half weighted as mining transitions to higher grade material, combined with an increase in ore tonnes mined and milled. Total group capital investments are expected to range between $305 million and $350 million, with approximately 50% of that attributable to capitalized mining costs. Majority of our 2023 growth capital relates to the development of the Haile underground mine with permitting process is now complete and development in full swing. We also expect to spend between $25 million and $35 million on exploration in 2023. Majority directed to expanding underground resources at Wharekirauponga and Waihi and at Haile. This in conjunction with our 3-year outlook have given the Board confidence to reinstate the company's semiannual dividend policy with the first dividend of $0.01 per share payable in April this year. I'll now turn the call over to David Londono to provide more information on Haile's performance.

David Londono: Thank you, Scott, and good morning, everyone. Haile exceeded its increased full year production guidance for the second year in a row, delivering 2022 gold production of 176,232 ounces. More importantly, we achieved this while decreasing our injury frequency rate by 33% year-over-year to 1.8% at the end of 2022. Gold production in 2022 benefited from positive tonnage and grade reconciliation in the Phase I of the Haile pit, leading to the other performance relative to guidance ranges. Fourth quarter gold production of 21,533 ounces was better than the previous quarter as expected, primarily from higher pit grade mine and processed coming from the [indiscernible] pit. On the mining side, we continue to focus on optimizing the mine planned [indiscernible] as part of the Haile technical review. Total material mine in the fourth quarter was10.2 million tonnes better than the previous quarter due to improved shovel [ph] productivity resulting from double-side loading implemented [indiscernible] better, which has translated into better mining fleet productivities and utilization. Total ore mined in 2022 was 4 million tonnes, higher than the same period in 2021 and this was a result of mine sequencing, positive [indiscernible] reconciliation in Phase 1 pit. Total mill fleet was 11% higher year-over-year largely reflecting improvements in the processing plant related to crusher and mill performance and improved recoveries as well as continued focus on effective [indiscernible] presentation. Fourth quarter mill sale of approximately 836,000 tonnes was lower from previous quarter, caused by 5.5 days of loss processing time due to the [indiscernible] occurred during the last week of the year in the Eastern United States. The operation continues to sustain increased super [ph] rates from glass fragmentation, improvements and more effective plants. Haile performed this full year all-in sustaining guidance, achieving $1,425 per ounce. However, year-over-year, all-in sustaining costs did increase due to lower sales, combined with higher operating costs, mostly due to inflation driven increase in consumables. Looking ahead to 2023, Haile is expected to produce between 170,000 and 185,000 ounces, while cost guidance will remain flat relative to last year with all-in sustaining costs expected to be between $1,500 and $600 per ounce. At Haile, we also anticipate a moving production and cost profile in 2024 and 2025 relative to the 2022 Haile technical review where production levels varied significantly over this period. Talking about the Haile expansion, I'm very pleased to provide a prion with an update on the project. At the end of 2022, we received all the necessary permits and approvals to complete the Haile expansion. With all this in hand, we can now fully develop the underground mine and expand the operating footprint to allow additional waste containment facilities and expanded tailings storage capacity. To date, we’ve developed a total of 950 meters, of which 400 are on the production decline and a combined 550 meters on the 2 ventilation portals. We continue to safely progress the work and risk are containing the ground and is on track for delivery in the fourth quarter of 2023. Construction in the 541 point and West PAG Stage 1 continued through January. Multiple contractors mobilized the site and began progressing on multiple scopes of work including clearing, grading, air works and groundwater pipe installation. I'm also pleased to say that we are hosting an Analyst and Investor tour at Haile next week, where I'm very much looking forward to showcasing the great work that is being done by the Haile team. I will now turn the call over to Peter Sharp to discuss the Didipio and our New Zealand assets.

Peter Sharp: Thank you, David. In 2022, the Didipio operation reported 0.74 recordable injuries per million hours worked, a record best at this operation. The Didipio reached its full target mining and milling rates ahead of schedule in the second quarter of 2022 and met its full year guidance by producing 113,198 ounces of gold for the year, including29,104 ounces in the fourth quarter. Full year copper production was 14,361 tonnes, including 3,476 tonnes in the fourth quarter. Total material mined for the full year was 1.7 million tonnes, including 404,000 tonnes from the fourth quarter. Mill feed for the year was 4 million tonnes, a significant increase relative to 2021, following the restart of the mill late in the fourth quarter of 2021. Mill feed grade was 1 gram a tonne of gold and 0.38% copper, slightly higher than in the previous quarter and consistent with the variation in the underground mine grade per the mine plan. Mill feed composition for the fourth quarter was approximately 37% of underground ore and 63% from surface ore stockpiles. The Didipio continues to generate strong margins with an all-in sustaining cost for the year of $637 per ounce and $1,061 per ounce in the fourth quarter. Notably, a 4,600 ounce dore shipment planned for sale in December 2022 was not able to be completed due to weather, which resulted in lower sales and higher all-in sustaining costs for this quarter. However, this shipment has now been sold. Last year, we received the permit required to increase our processing rates to 4.3 million tonnes per annum and we are currently investigating how to optimally use this additional capacity. Our preferred option is to increase the underground mining rates to 2 million tonnes or more per annum. And an optimization review is currently underway to assess how this can be achieved. Results from this review are expected in 2023. At Didipio, we are also making significant progress with our external stakeholders as we continue to improve our relationships with key government and community groups. A key initiative completed last year was the relocation of our principal offers to the Didipio mine which will result in all of the local business taxes, which is approximately $6 million per annum, flowing to local governments and communities in 2023. Under our renewed financial or technical assistant agreement, our FTAA, we have also implemented 2 new streams of community development funding, namely the Community Development Fund and the provincial development fund. The Community Development Fund is the first of its kind in the Philippines. This fund was created to expand the number of neighboring communities that receive development funding from the mine and is governed by a steering committee comprising company and community representatives. These people evaluate the proposed projects and ensure that they are delivered in line with the community's development goals. Importantly, all of the costs associated with the Community Development Fund and the provincial development fund programs are included in our guidance figures for the Didipio. Now for an update on our New Zealand operations. Macraes significantly improved its safety record last year with its injury frequency rate decreasing by 35% compared to the previous year, down to 5.2 recordable injuries per million hours worked. The operation finished is strong, producing 39,815 ounces of gold in the fourth quarter. Annual gold production was 143,672 ounces for 2022. 10% higher than the previous year, primarily due to higher tonnes milled and higher tonnes mined from both the open cut and the underground operations. Total material mined in the fourth quarter was 12.5 million tonnes, an increase from the previous quarter where mine tonnage was impacted by record rainfall that occurred in July. The development rates at the recently established Golden Point Underground continued to improve throughout the quarter, and the first stope ore tonnes mined were in December. The operation at Golden Point Underground is expected to reach full capacity during the second quarter of 2023, while Fraser's underground mine is expected to complete operations at the same time. As with Didipio, an optimization review is currently underway at Macraes to increase underground mining rates, with the results from this review also expected in 2023. For the full year, Macraes recorded an all-in sustaining cost of $1,510 per ounce, a good result given the weather-related challenges which occurred midyear. As Gerard previously mentioned, production guidance at Macraes for 2023 was impacted by approximately 15,000 ounces due to the discovery of a crack in the feed and train in 1 of our 2 ball mills in our processing facility, which was identified during a planned total planned shutdown last week. The Macraes team is working to develop the optimal recovery plan to reinstate the mill back into full operations. Contingency plans have been developed and some [technical difficulty] impact on production, including processing of higher-grade ore in the short-term to offset the reduced mill feed rate. Now for our Waihi operation. Why he also significantly improved its safety record last year with its injury frequency rate decreasing by 50% compared to the previous year, down to 3.1 recorded injuries per million hours worked. Production also significantly improved in the second half of the year, due predominantly to improved confidence in the underground resource model, which allowed for more accurate planning and adherence to plan. Waihi met its revised guidance and produced 39,109 ounces of gold in 2022, including 10,466 ounces in the fourth quarter. While production decreased relative to plan in the fourth quarter, this was predominantly attributed to slower mining in remnant mining areas during October, plus an unplanned mill outage during the same month. Importantly, the poor performance during October was not related to the reconciliation challenges that occurred in the first half of the year. With the benefit of the grade control drilling program being approximately 18 months ahead of mining, it is expected that the mining performance and reconciliation accuracy will continue to improve in 2023 and beyond. As with the Didipio and Macraes, an optimization review is currently underway at Waihi to increase underground mining rates with results from this review also expected in 2023. Waihi's full year all-in sustaining cost was $2,174 per ounce, while fourth quarter all-in sustaining costs was $2,035 per ounce. Looking ahead to 2023, Waihi is expected to see materially improved performance with guidance between 50,000 to 60,000 ounces at an all-in sustaining cost of between $1,400 and $1,500 per ounce. Waihi as it has experienced abnormally high rainfall since the beginning of 2023, with over 850 millimeters of rain in January followed by over 250 millimeters of rain in the first 2 weeks of February. This has impacted productivity in underground mine, especially in the remnant mining areas of Edwards and Empire West. However, on the expectation that rainfall will moderate, the company expects any first quarter production impacts to be recovered across the balance of 2023. I will now turn the call over to Scott Sullivan to talk about progress at Wharekirauponga.

Scott Sullivan: Thank you, Peter. Good morning, everyone. Last year, we took the important step of lodging the consent applications or permits with the two local councils. The council has formally accepted our application is complete for processing and issued a number of requests for additional information as is normal process, which we will respond to ahead of public consultation this year. At the completion of the consultation stage, the councilors will determine the formal hearing process for considering the consent application. Target indicated resource size of 1.1 million ounces has been determined as optimal for the initial development plans, which provide improved mine design opportunities in support of a pre-feasibility study due to slower-than-expected drilling at Wharekirauponga in 2022 related to drought conditions, the company is now targeting to lease NI4351-compliant PFS in the first half of 2024. Our current -- on current schedules, we're expecting first ore from Wharekiraupongaa in late 2031 with stoping fully underway in 2032. I'll now turn the call over to Craig Feebrey to talk about exploration.

Craig Feebrey: Thank you, Scott. Our 2022 drill programs across the group delivered strong results supporting our focus on creating value through near-mine resource conversion and growth. The Wharekirauponga, outstanding drilling assets continued as reported in December and shown in this slide, including 73 grams per tonne gold over 12.9 meters. Drill meters were down, however, hindered by poor weather conditions and the prioritization of hydrogeological drilling. This year, our drilling at Wharekirauponga continues to focus on resource conversion with 2 rigs and 8,800 meters planned. Also at Martha Underground, 3 rigs are currently drilling with 5,000 meters forecast for Q1, contributing to both resource conversion and growth. At Haile, our focus in 2022 was the Palomino underground target, where we drilled nearly 10,000 meters in 20 holes with a focus on converting the remaining inferred resource to indicate it in support of an updated resource estimate and economic study. We also had several exceptional results, including 6.8 grams per tonne gold over 100 meters as shown on this section. Our goal here is to convert Palomino to reserve in early 2024. Exploration expenditure at Haile this year is expected to range between $6 million and $8 million with an increased commitment to exploration drilling over previous years, focused on resource conversion and replenishing the underground target pipeline. At Didipio, last year, our team was successful in discovering 2 near-mine mineralized structures adjacent to underground infrastructure, encouraging us this year to commit a further 26,000 meters to infill and extensional drilling following up on these and several other priority targets. Looking across our exploration pipeline, I'm very pleased we're continuing to invest in our exploration success with a further $25 million to $35 million earmarked for 2023 with a focus on near-mine resource conversion and growth. I'll now turn the call back to Gerard.

Gerard Bond: Thanks, Craig, and thanks, team. In addition to announcing strong production and financial results, I wanted to take the opportunity to let you know we've also significantly strengthened our management team recently. Today, I'm pleased to advise that Michelle Du Plessis will join us as Chief People & Technology Officer on the first of March, a little over a week away. Michelle has over 25 years of experience in human resources transformation and executive leadership across multiple industries and countries. She joins us in BHP, where over her 15 years since she had numerous operational and strategic roles. -- led a cross-functional improvement in transformation function and most recently led global HR operations. As previously announced, [indiscernible] joined us as Chief Sustainability Officer in December last year. I think it's a highly experienced executive in this area and brings to the role particular expertise in social performance, human rights, climate change, environment and a range of stakeholder engagement functions on larger complex projects in the resources and construction sectors. And today, you heard from Peter Sharp for the first time who joined us as Chief Operating Officer for the Asia Pacific in October of last year. OceanaGold has a stronger executive team, and we've also made a number of key appointments at other levels across the organization. [Indiscernible] confidence that we can drive the full value potential of this business with a target culture throughout the organization. While we're proud of our 2022 accomplishments, there's still plenty of recruitment opportunity and months work to be done. Our focus is on taking responsible delivery and execution this year and beyond. Maximizing the free cash flow generation of the business and improving shareholder returns. Our 3-year outlook represents an annual production growth rate of 9% per annum to over 600,000 ounces of gold at 2025, with an anticipated improvement in margins and declining capital spending, leading to a significant increase in projected free cash flow in that period. This growth is near mine, lower risk and organic with the hole expansion on track to deliver a significant increase in gold production over the next 3 years. We will also continue to invest in the exciting exploration opportunities we have across the portfolio with a focus on near-mine, high return targets at the Didipio, Haile and we see tremendous upside. I'll now hand the call back to the operator and open up the line to take any questions.

Operator: [Operator Instructions] And your first question will be from Ovais Habib at Scotiabank. Please go ahead.

Ovais Habib: Thanks, operator. Congrats, Gerard and OceanaGold team on the Q4 beat and meeting the full year guidance. Gerard, just a couple of questions for me. Just starting off, the first one is regards to the 3-year guidance. Gerard, can you point to any risk and also any sort of areas that you have added conservatism to this guidance?

Gerard Bond: Well, Ovais, thanks for the question. Look, I mean there's always performance risk across any gold mine. But I think we view it as balanced from a risk perspective. We do have programs in place to drive improved performance across the portfolio. And I've spoken about those before. We have some signature programs in asset management, procurement and continuous improvement, all of which we we'll be implementing ore [indiscernible] process of implementing to drive better production and cost outcomes that are in the numbers, but that all remains to be captured. So it's a -- we view it as a very credible, realistic profile of what we can achieve and Obviously, our job is to beat it.

Ovais Habib: Perfect. And just in regards to the 2023 guidance that production is weighted more strongly to the first half of the year. Should we also assume CapEx is also weighted towards the first half of the year as well?

Gerard Bond: [Indiscernible] let's Scott McQueen handle the CapEx question because that's -- I hate to reline the opportunity to answer your question. But yes, the first half is slightly weighted to be more production heavy as a result of basically Haile grade presentation. Scott, do you want to answer the CapEx profile question?

Scott McQueen: Thanks, sir. Good morning. It is actually slightly first half weighted mainly with some carryover from 2023 with the delay in the [indiscernible], but not hugely less to the production profile.

Ovais Habib: Got it. Thanks for that. And then my final question is maybe for David. At Haile, now you've completed -- I remember hearing about 400 meters at the production decline. Any negative or positive surprises, David, that you've seen as the decline continues to progress?

David Londono: Hi, good morning. No, I think we found a little bit more stock to material at the beginning of the quarter and probably more water than expected and that was a result of heavy rains during the month of January and at late in the year. But [indiscernible] -- that was on the first 200 meters. After that, the material is turning back to what we were expecting.

Ovais Habib: Okay. Thanks for that David. That’s for me, that’s for me. Again, thanks for taking my questions.

Gerard Bond: Thanks, Ovais.

Operator: Thank you. Next question will be from Cosmos Chiu at CIBC. Please go ahead.

Cosmos Chiu: Thanks, Gerard and team, and thanks for a very good presentation here. Maybe my first question is in New Zealand. As you talk about Macraes, there's the crack in the tronian. Just wondering, where are you at this point in time, does it need to be replaced? And if it needs to be replaced, what are the supply chains? How do they look like in New Zealand? And then the other part is just to confirm, it sounds like you have two bar mills, one bar mills impacted. So I would imagine you're still processing ore at this point in time. What's the throughput at this point in time compared to run rate?

Gerard Bond: Thanks, Cosmos. I'll let Peter answer the question as it relates to the crack in the milling grade. Just a reminder that the impact we have in relation to this is 15,000 ounces from what it might have otherwise been. And I think, as Peter said in his prepared remarks that we do see the ability to use the new Europe and the ordering of the fleet grade to minimize the impact. But Pete, do you want to talk about the question -- address the questions across Montana?

Peter Sharp: Sure. Thanks, Gerard, and thanks for the question, Cosmos.

Cosmos Chiu: Hi, Peter.

Peter Sharp: [Indiscernible] was picked up. The crack that was identified during the full plant shutdown was in the feed end of the tuning of the ball mill as we talked about. It's a forecast feed in. So the Shell and Trane 1 unit. And what we are looking at doing is ultimately a full year -- the final fix will be to cut that trunnion off and actually bolt on a replacement trunnion which is something that is quite common in those bore mills. So we're getting serious engineering support out of -- opens out of Australia. But we are looking to your point around the supply issues. We are looking if we can to get as much support from in New Zealand itself, from engineering firms with the backup support from Hoffmans who are the technical experts. So we --while we have a quite a, I think, a reasonable handle now on the actual methodology for repair, it's still obviously going through a full review. So that's why at this stage, the estimate of impact is around 15,000 ounces. I think the second question was what is the overall impact. So for Macraes, there's two ball mills, there's two SAG mills at full operation, they've run at around 730 tonnes per hour we've been able to [indiscernible] some of the fee pipe work so that we can run the remaining three mills as 1 SAG and 2 ball mills. And were impacted by around 200 tonnes per hour. But one of the positive things around Macraes is there is a mixture of different grades of ore, the fly grade from the underground some medium grade from the open cut and some lower grade also from the open cut. So the longer this goes on, we are seeing the ability to lift average fee grade, so it minimizes impact as well.

Cosmos Chiu: Great. Thanks for detailed answer. [Indiscernible] maybe switching gears to Waihi. As you talked about, 2022 was good. It sounds like it was okay, but 2023 is going to continue to improve from 39,000 ounces last year to 45,000 to 55,000 ounces in 2023. Two parts, I guess, Q1 2023 impacted by rainfall. I seem to recall that was also an issue in Q1 2022. Have you learned? Is there anything that we can do about heavy rainfall, have you done anything else this year compared to last year? And then the second part is, yes, it's improving year-over-year. But is the 45,000 to 55,000 ounces sort of steady stake, and we -- is that now sort of -- I seem to recall that previously, it got as high as 70,000 to 80,000 ounces. I'm just wondering if 45,000 to 55,000 ounces where we should settle at. But it doesn't sound like because I think previously you talked about some optimization studies that you also have in place at Waihi. So if you can address all those questions, that would be great.

Peter Sharp: Sure. Gerard, did you want me to just [indiscernible] or do you want to?

Gerard Bond: Peter, thank you. So firstly, the guidance for 2023 is 50,000 to 60,000 ounces of gold. So just to be clear on that. The question around the rainfall. Look, 1.1 meters of rain in 6 weeks is highly unusual. And I don't think any mine underground or open cut is not going to be affected by that quantity of rain. You might have seen that cyclone Gabriel impacted the North Island of New Zealand just over a week ago. I was there last week at Waihi and I must say, I was just very impressed with how actually, well, it was managed from both surface runoff perspective and underground water perspective. So I think the team has certainly done a great job learning from history around that. That said, there is an open cut that sits directly above the underground and water does feed from the open cut into the underground. Now we are still looking at ways of minimizing that water getting into the underground. So all future can be mitigated. But I will say, again, the work that's been done is -- it looks -- it doesn't look like they just had 1.1 meters of rain in the last 6 weeks. Just pause there. Was there any other questions?

Cosmos Chiu: Yes, the run rate. Yes, Peter, in terms of like, as you said, thanks for correcting me on the production. I was looking at CapEx. But is that a good run rate in terms of what you're guiding to in terms of 2023? Is that -- can I just take my spreadsheet and equal to 2023 for the rest of time? Or are you looking for higher production?

Gerard Bond: Sure. So the interesting thing about why he is the average mining rate is around 1 million tonnes per annum, and that's what is currently in the forecast. But what we see over time is that the percentage of ore versus the percentage of waste does increase. So in 2023, we've got about a 50-50 blend of order waste, which means that there's just under 500,000 tonnes of ore milled. But in the future years, there is more ore mined than what -- so we do see an uplift in gold production. At Waihi, in the next couple of years, and that's part of our 3-year guidance. But predominantly, it's about that ratio of ore to waste as opposed to an overall uplift in the underground mining performance. But what we are doing, as I mentioned, at all of our three operations in Asia Pacific is undertaking the assessment, how do we actually lift overall production, which for Waihi especially, will automatically turn into more tonnes milled. That’s right.

Cosmos Chiu: Great. Maybe one final question and maybe back to Gerard. I don't want to deny you have a very good opportunity to answer questions, Gerard. Your dividend, it's great to see that. You've now reinstated the dividend. It works out, if my math is correct, to about 0.8% dividend yield. What's your longer-term thinking in terms of dividend? Is there a target that you're trying to get to? How should we think about that?

Gerard Bond: Yes. Thanks, Cosmos. And look, we're equally gelato be back to paying dividends. I said it early in my tenure, real business has paid dividends. So we're back into the position of being able to do so. We think that by putting a dividend out there, it puts the shareholder at the fund of the Q for the cash that's generated by the business .But I think for now and over the next short period of time, I mean, we've got so much growth ahead of us. I think that people should be happy to see a dividend, but it's not -- we don't have a target per se beyond the dividend policy as it stands. And we have every avenue open to us in the future as and when we progress the production growth and the cost reduction that we put out today to either increase it or move to share buybacks affect other forms of capital return. So we -- I want to make it clear that we're very keen to improve and increase returns to shareholders. But the dividend policy is $0.01 per share semiannually, and that's -- that's it for now. But plenty of scope as you would have seen, for that to change as and when those cash flows eventually.

Cosmos Chiu: Great. Thanks guys for answering my questions, and we look forward to the remainder of 2023.

Gerard Bond: Thanks Cosmos.

Operator: Next question will be from Wayne Lam at RBC. Please go ahead.

Wayne Lam: Yes. Thanks, guys. Just wondering for the cost look -- cost outlook, it looks pretty good over the next few years, especially into 2025. Just wondering if that $300 an ounce improvement in ASIC into 25 includes any model tail off in inflation at the other mines? Or what's kind of driving that improvement in cost profile outside of the Haile underground?

Gerard Bond: Yes, I'll the handle the first part --- outside of the Haile underground, well, Haile along is the primary driver of it, right? So that's -- and then obviously, it's Waihi lift, we get a lot of leverage there, too. It had an AISC in the 2000 this year. And naturally, as we lift to the target quantum next year and then beyond, as Peter said, there's a good deal of leverage. But the Haile is the primary driver, both volumetrically and also from a cost perspective and Waihi. From a price outlook figure, I'll let Scott McQueen answer that as well. We're not projecting anything beyond what you would see in the forward curve for any material input costs, whether that be energy, the steel making materials grinding the like in our cost base. We do have a full year of the inflationary impacts this year as opposed to, say, half year the year has gone. But we're not baking in further increase inflation beyond that. What you would see in the forward curves of any varying costs. Scott McQueen, anything to add?

Gerard Bond: No, that's correct. Here are exceptions there. Wayne, on any big step down in cost. And as Gerard mentioned earlier, our strategic pillars include a focus on procurement continuous improvement in asset management. And as we mentioned earlier, those opportunities aren't yet baked into the plan. So it's a pretty achievable outcome. And actually, we can aim to do better.

Alexia Howard: Okay, great. Thanks. And then maybe on the production outlook, is the lower 2024 guidance purely driven by smoothing in the profile at Haile? Or are there other incremental improvements we should be thinking about, like expanded capacity at the Didipio? Or an increase at Macraes? And then just in terms of that smooth profile at Haile, should we just kind of take an average of the '24, '25 profile around the 210,000 ounce level?

Gerard Bond: It's a little different to that. Wayne, I mean, basically -- and we made it very clear when we put out the [indiscernible] review last year. There was a very lumpy 24, .25. You've seen roughly 60,000 ounces go out of 24 and 25, it's up by about 70%. And that's a product of a couple of things. One, we stayed in 1 of the pits in '22 longer than we expected. So you've got a line plan transition issue, often like a smoothing opportunity. And then there's just like an optimization of the mine plan. So overall, the technical report remains intact due to seeing a shifting of the shape of production in the near-term, which is not surprising if anyone looked at what that profile looked at a year ago when we put out that report. But other than that, why he is will be a step up in '24 from '23, all other things being equal, but everything else should be around flat.

Wayne Lam: Okay, great. Thanks. And then maybe just last one at Macraes. Have you seen any similar impact in terms of rainfall and flooding in the South? And just on the 3-year outlook, does that include a relatively flat production profile there around 130,000 ounces? Or is there a scenario where that mine kind of bounces back into the 150,000 ounce range in the future?

Gerard Bond: I will let Peter take the second half. The first half, we did -- just a reminder, in the September quarter, we did report that we were heavily impacted by rain in the month of July. We had record rainfall in July there. So that was an impact. Peter, just on the multiyear apple.

Peter Sharp: Sure. Thanks, Gerard. But just to answer on the January, February rainfall significantly impacted in North Island, but the South Island wasn't impacted by that significant rain. Generally speaking, Macraes is a relatively flat outlook. So not looking at a big number of increases at this stage as part of our forward guidance, however, as I said, we are obviously looking at ways of increasing underground production, which obviously is much higher grade than the stockpiles or the open cut. So any benefit that we can get out of those optimization reviews will flow through to higher outlook. But at this stage, it's relatively flat.

Wayne Lam: Okay, perfect. That’s all for me. Thanks, guys.

Gerard Bond: Thanks, Wayne.

Operator: [Operator Instructions] And your next question will be from Mike Parkin at National Bank.

Michael Parkin: Thanks, guys and congrats on the good quarter. Just one follow-up question on what's happening with the ball mill at the grade. The15,000 ounce impact, is that solely being budgeted based off the reduced throughput? Or have you budgeted in a potential impact on the replacement or I guess, better clarity, are you even running it now or basically, that's my question.

Gerard Bond: Yes. Well, we're not running that ball mill now, Mike, because it's state -- and the 15,000 ounce impact on the guidance that we put out for '23 is inclusive of all the measures that Peter spoke about both our estimate to affect a repair or replacement. -- and the mitigated effects of optimizing the feed grade. And altering the second [indiscernible] still get the ball mill and the [indiscernible] optimally.

Wayne Lam: Okay. Thanks so much.

Gerard Bond: Thanks, Mike.

Operator: Thank you. And at this time, we have no other questions registered. Please proceed with closing remarks.

Gerard Bond: Well, look, thanks to everyone for joining us on the call. That concludes the webcast. A replay will be available on the website later today. On behalf of the entire management team and everyone at OceanaGold, I appreciate you joining us and wish you all a pleasant rest of the day.

Operator: Thank you. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.