OceanaGold raises $150 million from bought deal offering

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OceanaGold Corp. [OCG-TSX, ASX, NZ; OGCDF-OTC] said Monday October 19 that it has raised $150.4 million from a bought deal financing comprised of 73 million common shares priced at $2.06 per share.

Net proceeds of the offering will be used to fund organic growth projects, including the Haile Mine underground development in South Carolina, ongoing exploration and development of its mineral properties in New Zealand as well as for working capital and general corporate purposes.

The company said it has granted the underwriters the option to purchase an additional 10.9 million common shares (representing an additional 15% of the offered shares) on the same terms to cover over-allotments. That option remains open for the next 30 days, OceanaGold said in a press release.

OceanaGold shares advanced on the news, rising 1.5% or $0.03 to $2.03 on volume of 762,749. The shares are currently trading in a 52-week range of $4.01 and $1.16.

OceanGold is a shareholder of Canadian companies Nulegacy Gold Corp. [NUG-TSXV] and Gold Standard Ventures Corp. [GSV-TSX, GSV-NYSE], both of which have gold projects in Nevada.

OceanaGold is also a multinational gold producer with operating assets that include the Didipio Mine on Luzon Island in the Philippines, the Macraes Operations on South Island, New Zealand, the Waihi Gold Mine on New Zealand’s North Island and the Haile Gold Mine in South Carolina.

The company produced 470,601 ounces of gold and 10,255 tonnes of copper last year. The copper output was from the Didipio Mine in the Philippines, where the operation remains suspended.

Back in February, 2020, OceanaGold released its production guidance for this year, saying it expects to produce between 360,000 and 380,000 ounces of gold at an estimated all-in-sustaining cost (AISC) of US$1,075 and US$1,125/oz.

The company’s 2020 forecasts included 180,000 to 190,000 ounces of gold from the Haile Mine at a cash cost at an AISC of US$1,080 and US$1,130 per ounce sold. This would have amounted to a 25% increase over the previous year, mainly as a result of expected higher throughput rates and better recoveries.

As previously forecast, approximately two-thirds of Haile’s 2020 production is expected in the second half of the year as production progressively increases each quarter.

However, the company has since revised its production forecasts and now expects to produce between 295,000 and 345,000 ounces of gold at an all-in-sustaining cost range of between US$1,150 and US$1,250 an ounce sold.

The revised outlook is based on the company’s best efforts to estimate the ongoing impacts of the COVID-19 global pandemic.

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