Australian miner re-endorses application for FTAA renewal to OP
In what seems like a desperate attempt to resume operations, Australian-Canadian miner Oceana Gold Philippines, Inc. (OceanaGold) has re-endorsed its application at the Office of the President (OP) for the renewal of its Financial or Technical Assistance Agreement (FTAA).
This is almost more than a year since the firm’s FTAA for the Didipio underground gold and copper mine
project in Nueva Vizcaya expired.
In a filing with Australian Stock Exchange, OceanaGold said that sometime in the second quarter of this year, “a working team created by the President completed a review of the FTAA renewal, which included engagement with the Company, before re-endorsing the renewal to the Office of the President where it remains for a decision”.
It also said that sans the FTAA, the company will be forced to decide by mid-October on the “on-going status of the Didipio workforce as temporary lay-offs commenced in mid-April”.
The Didipio mine remained suspended during the quarter due to ongoing restraints placed on the operations by local government units (LGU) and anti-mining blockade of the access road.
Right now, there can only be two ways for OceanaGold's mining operation in the Philippines to resume, which is either through the OP’s approval of its FTAA renewal or if the LGU of Nueva Vizcaya, the host community for the project, will backtrack on its decision to restrict the company from accessing its mine site.
In July, OceanaGold said its application for FTAA renewal is what matters most for the company right now, following the decision of the Court of Appeals to dismiss its petition to reverse the Nueva Vizcaya Regional Trial Court’s (RTC) decision stopping its mining operations.
In the first half of the year, OceanaGold generated $234.0 million in revenue, a decrease from the prior year period mainly due to limited sales from Didipio and reduced sales from its mining operations in Waihi, New Zealand.
To recall, OceanaGold is a mid-tier, high-margin, multinational gold producer with assets located in the Philippines, New Zealand and the United States.
The firm’s first half earnings before interest, taxes, depreciation, and amortization (EBITDA) also decreased by 59 percent to $54.8 million year-on-year, also reflecting limited sales from Didipio and lower production from New Zealand partly offset by steady production from Haile at improved cash costs.
During this period, the company produced 139,385 ounces of gold, including 58,678 ounces of gold in the second quarter.
This was 45 percent lower than the same period in 2019 primarily due to the temporary suspension of operations at Didipio.
Nevertheless, the company said it “has maintained Didipio in a state of operational readiness for rapid re-start on the expectation that a resumption of normal operations could be achieved” this year.