OceanaGold Corp. [OGC-TSX, ASX] shares rallied Monday December 7 following news that the company has received positive overtures from the government of the Philippines that could lead to a resumption of the company’s Didipio gold-copper mine.
The shares jumped 30% or 54 cents to $2.36 on volume of 5.72 million. The shares are currently trading in a 52-week range of $4.01 and $1.16.
The Didipio Mine is located on the island of Luzon and is held under a Financial or Technical Assistance Agreement (FTAA) with the Philippine government, granting title, exploration and mining rights.
At full speed, the operation directly employs over 1,500 workers, of which 97% are Philippine nationals and 59% are from local communities. Didipio has a measured and indicated resource of 1.3 million ounces of gold and 160,000 tonnes of copper.
The company was notified that the Office of the President of the Philippines instructed the Department of Environment and Natural Resources to engage the company and the Department of Finance to finalize the renewal of the FTAA. This follows the recent granting of a Certificate of Non-Overlap to the company which states that the FTAA area is outside of ancestral domain of the Indigenous Cultural Communities/Indigenous Peoples.
Oceana Gold launched a bid to renew the 25-year permit in 2018. After it expired in June, 2019, the company kept Didipio operating under a temporary license. However, a blockade backed by the local government forced the company so suspend operations a few weeks later.
The company applied for an injunction in the Philippines Court of Appeals in July, 2019 as a temporary measure to allow interim operations of the Didipio Mine while it challenged the legality of the order issued by the Governor of Nueva Vizcaya (where the mine is located) to restrain activities pending renewal of the FTAA.
OceanaGold said it had been made aware from social media that the Court of Appeals had denied the application for an injunction.
The company implemented the permanent layoff of 496 employees who the company said were impacted by the local government blockade of the public road pending the FTAA renewal. In its press release Monday, the company said its FTAA has the strong endorsement of the residents in the local communities near the Didipio Mine, including Indigenous Peoples.