OceanaGold to start mining at Didipio

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OceanaGold Corp. disclosed Friday that it expects mining at the Didipio gold project in Nueva Vizcaya to start within the first quarter of this year.

Commercial production or gold plant commissioning is expected to start around the end of 2012 to early 2013.

The Australian miner aims to expand production to a range of 300,000 to 350,000 ounces of gold in 2013, when production at Didipio complements output from New Zealand.

Concrete pouring for the plant at Didipio started in November 2011 as scheduled. OceanaGold said that despite heavy rain during the quarter, bulk earthworks for the plant site was completed and excavation progressed reasonably well for the power station.

“The mining contract was awarded and the contractor commenced mobilizing to site in late December,” according to the company disclosure to the Australian Securities Exchange.

OceanaGold said the construction camp is nearing completion with about 550 construction contractors and staff on site.

All major construction contracts are either awarded or in the process of being tendered.

The Australian miner said it spent $30.9 million on construction works for Didipio in the fourth quarter of 2011.

Total construction costs since June 2011 has so far reached $65.6 million.

OceanaGold’s total exploration expenditure for the fourth quarter of 2011 reached $3.4 million.

In the Philippines alone, further soil sampling activities near Didipio and geological mapping at other tenements were conducted.

Also during the quarter, the company said it hosted a site visit where analysts and investors had the opportunity to meet the project team, see the construction progress, and witness the company’s ties with the local community.

The mayor of Kasibu, the barangay captain (village chief) of Didipio and the president of the Didipio Community Development Corporation (Dicorp) participated in the site visit.

Total fourth quarter gold production was up 11 percent on the previous quarter to 65,750 ounces bringing the total for 2011 to 252,499 ounces.

“This was slightly below expectations for the quarter and subsequently the year,” OceanaGold said.

For the full year 2011, including a year-end adjustment for inventory, the unaudited cash costs were $875 an ounce, which is within the guidance range of $850 to $890 per ounce.

OceanaGold owns and operates New Zealand’s largest gold mine, Macraes (Open Pit and Frasers Underground) and Reefton Goldfields. The assets are located on the South Island of New Zealand.

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