OceanaGold income plunged 48% in Q1

MANILA, Philippines — Listed mining firm OceanaGold Philippines Inc. (OGPI) saw its net income plunge by 48 percent to $11.5 million (or about P663.2 million) in the three months ending March this year due to lower production and a significant increase in expenses.

In a disclosure, OGPI said revenues reached $92.1 million, an increase of less than 1 percent from last year while the cost of sales rose by 1.5 percent to $54.6 million.

For the comparative period, gold production declined by 20 percent to 26,312 ounces while copper output decreased by 14 percent to 3,015 tons.

OGPI registered a lower mill throughput, or the quantity of raw material processed in a given period, primarily due to a five-day plant shutdown in February this year.

READ: OceanaGold debuts on PSE in the red

Aside from that, the firm mainly focused on “mining the comparatively lower-grade monzonite ore as opposed to the higher-grade Breccia ore mined in the previous quarter.”

Lower-grade ore

Opting to harness lower-grade ore was in line with OGPI’s mine plan for the Didipio gold-copper mine in Nueva Vizcaya province.
OGPI said gold price averaged $2,136 per ounce while the average copper price reached $3.90 per pound.

It managed to sell 31,863 ounces of gold and 3,180 tons of copper, in line with this year’s guidance. Some 33 percent of gold output was sold to the Bangko Sentral ng Pilipinas.

Amid higher average metal prices, the company incurred higher costs. General and administrative expenses surged by 138 percent to $18.3 million as it remitted an additional government share of $9.3 million, which was not a requirement in the first half of last year.

READ: OceanaGold Philippines budgets $7M for Didipio, new mine site

Meanwhile, the cost of sustaining current mining operations went up by 62 percent on the back of lower gold sales along with the increased processing costs related to the plant shutdown and higher expenditures.

OGPI is expecting to produce 120,000 to 135,000 ounces of gold and 12,000 to 14,000 tons of copper for this year.
It also expects to allocate $10 million to $15 million for its growth capital.

“Exploration expenditure at Didipio in 2024 will focus on extension and conversion drilling in the underground as well as planned regional exploration activities,” OGPI said.

The firm’s Didipio mine is an underground gold-copper mine that is covered by a 25-year financial and technical assistance agreement with the government.