Mine preparation work is under way at the Haile gold mine site in North Carolina.
(Photo: Romarco Minerals)

OceanaGold is headquartered in Melbourne, Australia, and owns and operates three gold mines in New Zealand and a gold-copper mine in the Philippines. The company is forecasting its 2015 gold production to be in the range of 295,000 to 335,000 oz, excluding production from its recently acquired Waihi mine in New Zealand, and copper production to be in the range of 21,000 to 23,000 mt of copper in concentrates.

Romarco is headquartered in Toronto, Canada, and has the Haile open-pit gold mine project in South Carolina, United States, as its key asset. The company began construction of the project in May and is targeting a start of production in the fourth quarter of 2016. Mill throughput is planned at 7,000 st/d. Gold production is scheduled to average 126,700 oz/y over a mine life of 13.25 years.

Initial capital costs to develop the Haile project are estimated at $333.1 million. Total cash costs of production (including mine development, salvage value, mitigation and reclamation closure) are estimated at $564.12/oz, net of a byproduct credit for silver.

If Haile’s low estimated production costs are realized, the combined Oceana/ Romarco company has the potential to be among the lowest-cost gold producers in the world. Company-wide production is estimated at about 540,000 oz/y of gold from 2017 going forward at an all-in sustaining cost of less than $600/oz.

The combined company will gain financial flexibility through its increased cash position, OceanaGold’s free cash flow from its existing operations, and access to low-cost credit facilities. As a result, the cost of capital for Haile development is expected to be meaningfully reduced, while OceanaGold will maintain sufficient leverage to continue to invest in organic growth opportunities.