OceanaGold shares rally on U.S. permitting news

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OceanaGold [OCG-TSX, OCANF-OTC] shares rallied Tuesday in active trading after the company said the United States Army Corps of Engineers has issued a Supplementary Environmental Impact Statement (SEIS) Record of Decision for the expansion of its Haile Gold Mine, located in Kershaw, South Carolina.

The company has also been granted a permit under Section 404 of the Clean Water Act, which completes the Federal permitting process.

Also, the South Carolina Department of Health and Environmental Control (DHEC) issued a mine operating permit on December 14, 2022, which, after a 15-day period, will become final and complete the state permitting process.

The shares advanced on the news, rising 12.23% or 29 cents to $2.66 on volume of 1.28 million. The shares are currently trading in a 52-week range of $3.41 and $1.78

The Record of Decision and related permits are required to commence development of Haile underground, and also to expand the site’s operating footprint. Receiving a permit allow OceanaGold to develop additional potentially-acid generating waste containment facilities, overburden facilities, and an expanded tailings storage facility.

During the third quarter of 2022, DHEC approved an early works program enabling the company to commence initial development of the main production portal and drilling of the intake and exhaust ventilation portals.

With the receipt of permits, first ore from the Haile underground mine is on track for delivery by the fourth quarter of 2023.

Gold was first discovered at the Haile Gold Mine in 1827 and a history of significant production has since been established. In January, 2017, the first gold was poured from the modern Haile Gold Mine after OceanaGold acquired the operation in late 2015.

Proven and probable reserves at the site currently stand at 2.84 million ounces, according to company documents.

Permitting provides both a source of growth and optionality through the addition of the Haile Underground mine, as well as the opportunity to extend the life of the existing open pit mine through additional waste containment and tailings storage.

OceanaGold is a multinational gold producer with a pipeline of organic growth opportunities and established assets, including the Didipio mine in the Philippines, the Macraes and Waihi operations in New Zealand and Haile gold mine in the United States.

In the first six months of 2022, OceanaGold produced 246,331 ounces of gold, a 39% increase over the first half of 2021. Of that amount, Haile open pit produced 98,206 ounces, including 37,958 ounces in the second quarter. Total revenue in the first half of 2022 was US$515 million.

The company is targeting overall production of between 445,000 and 495,000 ounces of gold this year.

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