Mr. Mick Wilkes reports
OCEANAGOLD DECLARES DIVIDEND FOLLOWING RECORD EARNINGS IN 2014
OceanaGold Corp. has released its fourth-quarter and full-year 2014 financial and operations results for the quarter ending Dec. 31, 2014. Details of the consolidated financial statements and the management discussion and analysis are available on the company's website.
Key highlights:
- Achieved record annual revenue of $563.3-million (U.S.) with a record net profit of $111.5-million (U.S.);
- Declared a dividend of four U.S. cents per common share or CDI for 2014, reflecting the strong performance in 2014;
- Exceeded 2014 consolidated production guidance range with 307,463 ounces of gold and 25,010 tonnes of copper produced;
- Achieved record quarterly gold production at Didipio with 34,783 ounces produced in the fourth quarter;
- Strengthened the balance sheet through total debt repayment of $77.4-million (U.S.) while increasing cash position by $26.4-million (U.S.) to $51.2-million (U.S.);
- Delivered sector leading low cash costs of $418 (U.S.) per ounce and all-in sustaining costs of $785 (U.S.) per ounce, both net of byproduct credits and within the cost guidance range;
- Increased Didipio process plant throughput rate to the planned 3.5 million tonnes per year;
- Continued strong improvement in annual safety performance across the company's operations.
Mick Wilkes, managing director and chief executive officer, commented: "On behalf of the board of directors, I am very pleased to declare a dividend payment for 2014. This follows another strong year of financial and operational performance across the company, where we achieved record annual revenue and earnings and generated significant free cash flow. Despite the lower gold price over the past two years, the company has strengthened the balance sheet through repayment of nearly $150-million (U.S.) in debt while increasing our cash position. Over this period, we have delivered strong returns, positive results and are now further increasing shareholder wealth through a dividend payment."
PRODUCTION AND COST RESULTS SUMMARY
(All currency amounts in U.S. dollars)
Didipio New Zealand Consolidated
Fourth-quarter 2014 results
Gold produced ounces 34,783 57,929 92,712
Copper produced tonnes 6,747 - 6,747
Gold sales ounces 33,088 55,298 88,386
Copper sales tonnes 6,271 - 6,271
Average gold price received $ per ounce 1,180 1,214 1,201
Average copper price received $ per pound 3.00 - 3.00
Cash costs $ per ounce (279)(1) 756 369(1)
2014 results
Gold produced ounces 106,256 201,207 307,463
Copper produced tonnes 25,010 - 25,010
Gold sales ounces 110,510 208,462 318,972
Copper sales tonnes 25,886 - 25,886
Average gold price received $ per ounce 1,261 1,279 1,273
Average copper price received $ per pound 3.11 - 3.11
Cash costs $ per ounce (420)(1) 862 418(1)
All-in sustaining costs(2) $ per ounce (103)(1) 1,255 785(1)
1. Net of byproduct credits.
2. Based on the World Gold Council methodology, expansionary and growth capital
expenditures are excluded from the AISC.
With the strong performance in 2014, the board of directors of the company has established a dividend policy designed to balance competing priorities for the business with a sustainable payment to shareholders while maintaining prudent gearing. Under the policy, an ordinary dividend of two U.S. cents per share is intended to be paid annually. In addition, the policy allows for a discretionary payment that will be based on the profitability of the business while taking into account capital and investment requirements for growth opportunities.
For 2014, the board has declared a dividend payment of four U.S. cents per share (for approximately $12-million (U.S.)). Shareholders of record at the close of business in each jurisdiction on March 2, 2015, will be entitled to receive payment of the dividend on April 30, 2015. The dividend payment applies to holders of record of the company's common shares traded on the Toronto Stock Exchange and the NZX Main Board in New Zealand and holders of CHESS depository interests traded on the Australian Securities Exchange.
Dividend key dates
Last date for processing requests to convert securities between stock exchanges before the record date: Wednesday, Feb. 25, 2015
Shares and CDIs trade on an ex dividend basis: Thursday, Feb. 26, 2015
Record date: Monday, March 2, 2015
Processing recommences for requests to convert securities between stock exchanges: Tuesday, March 3, 2015
Dividend payment date: Thursday, April 30, 2015
Payments to holders of common shares traded on the TSX will be made in Canadian dollars. Payments to holders of CDIs and common shares traded on the NZX Main Board will be made in Australian or New Zealand dollars. All exchange rates will be calculated based on the 'noon rate' prevailing on April 20, 2015, as reported by the Bank of Canada.
For a second consecutive year and despite a lower average gold and copper price received, the company achieved record revenue of $563.3-million (U.S.) and a net profit of $111.5-million (U.S.). Company EBITDA was $239.8-million (U.S.) for the full year 2014.
The company achieved production at the high end of the guidance range with 307,463 ounces of gold and 25,010 tonnes of copper produced. For the year, Didipio exceeded its production guidance range with 106,256 ounces of gold and 25,010 tonnes of copper, which included record quarterly gold production of 34,783 ounces in the fourth quarter. In New Zealand, the company achieved its consolidated full-year guidance for the operations with 201,207 ounces of gold produced.
The company's consolidated 2014 cash costs and AISC were $418 (U.S.) and $785 (U.S.) per ounce sold, respectively, both net of byproduct credits and within the cost guidance range. Total sales for the year were 318,972 ounces of gold and 25,886 tonnes of copper.
In 2014, the company reduced its total debt by $77.4-million (U.S.) while increasing its cash position to $51.2-million (U.S.). Over the past two years, the company has reduced its total debt by $149.4-million (U.S.).
Mr. Wilkes added: "We look forward to 2015 where we expect to continue generating significant free cash flow through strong operating performance and a disciplined approach toward capital investments. We expect to continue to deliver positive results by executing on our well defined and balanced strategy of operating efficiently and safely to maximize value from our assets, strengthening our social licence to operate, and effectively and strategically deploying capital to further increase shareholder wealth. Our strong technical and managerial experience coupled with our high-margin business uniquely positions us to build a solid pipeline of high-quality projects while strengthening our balance sheet and returning cash generated by the business to shareholders through dividends."
Full 2014 results release and conference call
The company will host a conference call/webcast to discuss the results at 8:30 a.m. on Friday, Feb. 20, 2015 (Australian Daylight Savings Time)/4:30 p.m. on Thursday, Feb. 19, 2015 (U.S. and Canada Eastern Standard Time).
Teleconference participant dial-in numbers (required for those who wish to ask questions)
Australia: 1-800-076-068
New Zealand: 0-800-453-421
Canada and North America: 1-888-390-0546
All other countries (toll): 1-416-764-8688
Playback of webcast
If you are unable to attend the call, a recording will be available for viewing on the company's website from 11:30 a.m. on Friday, Feb. 20 (Australian Daylight Savings Time)/7:30 p.m. on Thursday, Feb. 19 (Eastern Standard Time).
Tax information for dividend
Australian income tax
For Australian income tax purposes, the dividend is unfranked and there is no amount of conduit foreign income per security for this dividend payment.
Canadian withholding tax
Holders of common shares or CDIs are advised that this dividend is designated by the company to be an eligible dividend pursuant to subsection 89(14) of the Income Tax Act (Canada) and corresponding provincial legislation. As the dividend originates from Canada, withholding tax at the rate of 25 per cent will be deducted from dividends paid to non-Canadian residents unless the shareholder or CDI holder is a resident of a country with a tax treaty with Canada, in which event a lower withholding rate may apply. Such shareholders or CDI holders must certify their non-resident status by completing the relevant forms required by the Canada Revenue Agency. The company will mail every holder further information following the record date.
Information contained in this media release is based on the directors' current expectations and may be subject to change. If any of the dates should change, the revised dates will be announced by media release and will be available from the company's website.
STATEMENT OF OPERATIONS
(in thousands of U.S. dollars, except per share amounts)
Q4 2014 Q3 2014 Q4 2013 2014 2013
Sales $ 142,655 $ 122,838 $ 170,142 $ 563,328 $ 553,612
Cost of sales, excluding depreciation
and amortization (69,167) (68,995) (64,089) (289,888) (260,651)
General and administration (8,923) (7,870) (8,602) (34,539) (28,423)
Foreign currency exchange gain (loss) 1,188 (2,509) 526 1,711 1,267
Other income (expense) (95) 41 (1,480) (817) (3,445)
---------- ---------- ---------- ---------- ----------
Earnings before interest, tax,
depreciation and amortization
(excluding gain (loss) on undesignated
hedges and impairment charge) 65,658 43,505 96,497 239,795 262,360
Depreciation and amortization (34,111) (30,651) (34,855) (129,561) (129,315)
Net interest expense and finance costs (2,952) (2,980) (7,991) (11,206) (26,978)
---------- ---------- ---------- ---------- ----------
Earnings (loss) before income tax and
gain (loss) on undesignated hedges and
impairment charge 28,595 9,874 53,651 99,028 106,067
Tax (expense) benefit on earnings/loss 2,020 10,814 (7,841) 13,137 (13,290)
Earnings (loss) after income tax and
before gain (loss) on undesignated hedges
and impairment charge 30,615 20,688 45,810 112,165 92,777
Impairment charge - - (107,800) - (193,300)
Gain (loss) on fair value undesignated
hedges 10,019 (5,284) 5,210 (876) (2,083)
Tax (expense) benefit on gain/loss on
undesignated hedges and impairment (2,805) 1,480 28,621 246 54,749
---------- ---------- ---------- ---------- ----------
Net profit (loss) $ 37,829 $ 16,884 $ (28,159) $ 111,535 $ (47,857)
========== ========== ========== ========== ==========
Basic earnings per share $ 0.13 $ 0.06 $ (0.10) $ 0.37 $ (0.16)
Diluted earnings per share 0.12 0.05 (0.10) 0.36 (0.16)
We seek Safe Harbor.
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