Oceanagold starts construction at Didipio project

Manila Times.net

Australia-based OceanaGold Corp. on Wednesday announced that it has started construction at the Didipio project in northern Luzon.

Mick Wilkes, Oceana Gold managing director and chief executive, expressed confidence that construction will be completed as scheduled, and the project will see commissioning in the fourth quarter of 2012.

“Over the past six months we have been working hard to unlock significant value through adjustments to the design of the mine, process plant and infrastructure which has seen average annual gold production increase by 45 percent and average annual copper production increase by 69 percent over the life of the mine,” Wilkes said in a report.

The executive also said the “robust” Didipio project will be transformational for OceanaGold, giving a significant platform to expand into the Philippines and other Asia Pacific countries.

The Didipio project is expected to produce on average 100,000 ounces of gold and 14,000 tons of copper a year at cash costs of $356 per ounce of gold, net of bi-product credits at $3.00 per pound of copper.

For the first six years of operations, gold production will be approximately 100,000 ounces per annum, Wilkes said.

“However, with higher annual copper production of 18,000 tons per annum, cash costs will average a negative $79 per ounce, net of bi-product credits, over the same period,” the executive said.

He said the project demonstrates an internal rate of return of 48 percent at spot metal prices.

Wilkes said the mine life has been shortened to 16 years with the open pit operating throughout and the underground operation expected to commence in 2020.

“With the larger open pit design, the strip ratio has increased to 3.45:1,” he said, adding that the increased mining rates and larger open pit will allow for quicker access to the higher grade gold than would have been mined using underground methods later in the mine’s life.

He said the new open pit design would also allow for high feed rates to the process plant to be sustained as well as greater leverage to strong metal prices by converting more of the resource into reserves.

“Additional inferred resources totaling 15 million tons fall within the currently designed open pit. These could potentially add 200,000 ounces of gold and 20,000 tons of copper to the mine plan,” he said.
JAMES KONSTANTIN GALVEZ