The OceanaGold Corp (ASX: OGC) share price is gaining this morning after the company announced its Didipio Mine’s Financial or Technical Assistance Agreement (FTAA) has been renewed for another 25-year period. OceanaGold also released an operations update.
Shares in OceanaGold are currently trading for $2.52 – 2.44% more than at market’s close yesterday.
Let’s take a look at today’s news from the gold mining company.
The news driving the OceanaGold share price
The OceanaGold share price looks like it’s in for a good day after the company announced the Philippine Government has renewed the Didipio Mine’s Financial or Technical Assistance Agreement (FTAA) for another 25 years.
Didipio is a gold and copper mine. Work at the mine is currently halted as the company prepares to rehire and train its workforce.
Some of the FTAA’s renewed terms include:
- OceanaGold must invest an additional 1.5% of the mine’s revenue into community development.
- The company must list at least 10% of OceanaGold Philippines Inc’s ordinary shares on the Philippine Stock Exchange within the next 3 years. OceanaGold Philippines is a subsidiary of the company.
- Additionally, OceanaGold Philippines must offer at least 25% of the gold it produces to the Philippine Central Bank for a fair market price.
The OceanaGold share price might be one to watch in the near term, as the company plans to announce more details on the Didipio Mine’s production resumption in due time.
It hopes to restart its milling operations soon, using the 19 million tonnes of ore it has stockpiled.
Once work at the mine begins, OceanaGold predicts it will reach full capacity within 12 months. The mine’s expected to produce around 10,000 ounces of gold and 1,000 tonnes of copper each month at first quartile.
Commentary from management
OceanaGold’s president and CEO Michael Holmes said of the news:
We are pleased to confirm the renewal of the Didipio Mine’s FTAA and thank the Philippine Government for their endorsement… We look forward to commencing restart activities and continuing to work in partnership with our regulators, communities, employees, and all stakeholders to contribute to the Philippines’ post-COVID-19 economic recovery.
Also likely affecting the OceanaGold share price is news the company expects all its operational mines to reach their 2021 production guidance.
OceanaGold’s US operation, Haile, is on track to hit its 2021 production guidance of 150,000 to 170,000 ounces of gold.
However, the mine’s production costs have increased and it’s yet to meet the company’s expectations. As a result, OceanaGold is conducting a review of the operation.
News the company’s New Zealand-based operations are tracking in line with their 2021 production guidance could also be boosting the OceanaGold share price.
The Waihi Gold Mine’s production guidance was between 35,000 and 45,000 ounces of gold.
Macreas Gold Mine’s guidance was 155,000 to 165,000 ounces of gold.
OceanaGold share price snapshot
It has been a rough year so far for the OceanaGold share price. It’s currently 5.9% lower year to date. It has also fallen 23% since this time last year.
The company has a market capitalisation of around $1.7 billion, with approximately 704 million shares outstanding.