OceanaGold Corp T.OGC

Alternate Symbol(s): OCANF

Metals & Mining Gold

OceanaGold Corp is an intermediate gold and copper producer. The Company has a portfolio of four operating mines: the Haile Gold Mine in the United States of America; Didipio Mine in the Philippines; and the Macraes and Waihi operations in New Zealand. The gold, copper, and silver that the Company produces are essential to the renewable energy and transport sectors, life-saving medical devices and technology, which connects communities around the world. The Didipio gold and copper mine is located in Luzon, Philippines. It produces gold and silver as dore bars and copper in concentrate. The Macraes Operation on the South Island of New Zealand is an active gold producing mine. The Company's Waihi Operation in the North Island of New Zealand is an underground operation. The Haile Gold Mine located in Kershaw, South Carolina is a gold mine on the East Coast.

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OceanaGold Corp > Scotia Take Mildly Positive: Maintains SO and $5.00 Target

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Post by echo2on Feb 21, 2021 9:30pm

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Post# 32623516

Scotia Take Mildly Positive: Maintains SO and $5.00 Target

Latest Research (February 19, 2021):
OUR TAKE: Mild Positive. OceanaGold reported in-line Q4/20 results with EPS of $0.01 vs. our $nil est and cons

$0.01. Q4/20 production of 99koz Au with preliminary AISC of ~$1,080/oz had been pre-released. OGC also released 2021 and 5-year guidance; in 2021, OGC plans to produce 340-380koz Au (vs. our 367koz Au est ; ~20% increase YoY) with AISC of $1050-$1200/oz (vs our AISC est of $1242/oz; ~12% lower YoY).
Five year guidance (production to grow by 75% and costs to decrease by 20%) was in line with our estimates. OGC expects to produce an annual average of ~450koz with AISC averaging $1,050/oz.Note the forward guidance does not include any contribution from Didipio nor WKP, which is expected to come online in 2026 (OGC is pursuing options to bring WKP into the 5-Year plan).

Assuming zero production from Didipio in 2021 and 2022, the company is expected to grow from negative FCF in 2021 (capex intensive year; building 3 underground mines) to positive FCF in 2022, generating ~$115M (FCF yield of ~10%). Assuming Didipio comes back online in 2022, we expect OGC to generate ~$194M or a FCF yield of ~17%. Following model updates, our C$5.00 price target and SO rating is maintained.

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