Oceanagold Corporation · TSX:OGC
Oceanagold — Merger or Acquisition (August 2015)
45 slides from Oceanagold's merger presentation, Aug 14, 2015
Slide 1: OceanaGold to Acquire Romarco Minerals
The Low Cost Gold Producer Updated August 14 2015 OceanaGold to Acquire Innovation • Performance • Growth Romarco Minerals
Slide 2: Cautionary Notes
Cautionary Notes Cautionary Notes - Information Purposes Only The information contained in this presentation is provided by OceanaGold Corporation (“OGC”) for informational purposes only and does not constitute an offer to issue or arrange to issue, or the solicitation of an offer to issue, securiti
Slide 3: Cautionary Notes (Cont'd)
Cautionary Notes (Cont’d…) OceanaGold Technical Disclosure The Mineral Resources for Didipio were prepared by, or under the supervision of, J. G. Moore, whilst the Mineral Resources for Macraes and Reefton were prepared by S. Doyle. The Mineral Reserves for Didipio were prepared under the supervisio
Slide 4: Transaction Rationale: New OceanaGold
Transaction Rationale New OceanaGold: The Low Cost Gold Producer The Low Cost Gold Producer Diversified Producer Mining operations in 3 Industry best AISC profile jurisdictions Didipio & Haile (+10 years) Best in Class assets Insulated business over the next decade of commodity volatility
Slide 5: Attributes of an Industry Leader
Attributes of an Industry Leader The Low Cost Gold Producer Industry leading share price Low Cost Development Project performance in Construction Proven delivery on commitments Tier One Jurisdiction New >25 years of operational & development experience OceanaGold Long Mine Life Strong free cash flow
Slide 6: Transaction Overview
Transaction Overview OceanaGold to acquire all of the issued and outstanding shares of Romarco Transaction Summary Pro forma ownership of resulting Company would be approximately 51% current OceanaGold & approximately 49% current Romarco shareholders Share exchange ratio of 0.2410x of an Ocean
Slide 7: Pro Forma Capitalization
Pro Forma Capitalization Strong Pro Forma Capital Structure & Implied Valuation Ratios Poised for Re-Rating New Units OceanaGold Romarco OceanaGold (5) Share Price (TSX) (C$/sh) $2.83 $0.68 $2.83 Basic Shares Outstanding (M) 303.5 1,242.6 603.0 Basic Market Capitalization C$m $859 $848 $1,707 Cash &
Slide 8: Overview of the Haile Gold Project
Overview of the Haile Gold Project Haile Represents a Premier Gold Project High Grade, One of the highest grade open pit gold development projects in the gold sector – 2.06 g/t Au (reserves) Open-Pit Mine Manageable Moderate initial total capital cost of US$333mm Upfront Capex Project is curre
Slide 9: Pro Forma Profile: Gold Production and AISC
Pro Forma Profile Well Positioned for Long-term Growth & Free Cash Flow Generation Diversified Production Base & Gold Production (koz) (1) AISC (US$/oz) (1) Increased Gold Exposure RESERVES 600 BY OPERATING DISTRICT (2) $1,000 Industry USA 500 Haile Projected leading Philippines 32% Year 1 $800 AISC
Slide 10: Peer Benchmarking – AISC & Implied Margin
Peer Benchmarking – AISC & Implied Margin The Low Cost Gold Producer – Insulating the Business to Gold Price Volatility Peer 2015E AISC Implied Margin to US$1,100/oz Au (3)(4) $1,200 New Oceana New Gold $900 AISC (US$/oz) Evolution $600 Northern Star Randgold $300 Goldcorp Yamana $0 (1) (2) Eldorado
Slide 11: Peer Benchmarking – 2015E P/CF
Peer Benchmarking – 2015E P/CF Cash Flow Generation to Propel Re-Rating Long-term Cash Flow Profile to be Anchored Execution on Haile Construction & by Didipio & Haile: Strategic Plan will Propel Low Cost & Long Life (+10 years) Projects Cash Flow Re-rating Peer P/ CF (2015E) 10.0x 10.2x 9.6x 8.0x P
Slide 12: Financial Flexibility
Financial Flexibility Current Leverage Profile Plus Free Cash Flow Provides Low Cost Financial Flexibility Haile Construction Advancing & Ability to Fund a Substantial Portion +US$200mm of Combined Pro Forma of Capital Requirements from Cash on Hand Forecasted Free Cash Flow Reinforced by OceanaGold
Slide 13: OceanaGold – Track Record of Delivering
OceanaGold – Track Record of Delivering Relative Trading Performance – Last 3 Years OceanaGold GDXJ GDX 250% 200% 150% 45% 100% 50% (69%) (74%) 0% Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 2013 July 30. 2015 Jan. 2014 Announce Acquisition of Dec. 2012 Mar. 2013 Took Immediate 2013 & 2014 Acti
Slide 14: Benefits to OceanaGold Shareholders
Benefits to OceanaGold Shareholders High Quality Development Haile represents one of the best gold development assets currently owned by a junior Asset Low Cost Production Haile’s year 1 (2017) estimated AISC of US$414/oz Geographic Diversification United States represents a top-tier mining jurisdic
Slide 15: Benefits to Romarco Shareholders
Benefits to Romarco Shareholders Significant premium to Romarco shareholders of 72.7% based on the closing Substantial Premium price of OceanaGold and Romarco on July 29, 2015 and 71.8% based on the 30- day volume-weighted average closing prices Exposure to OceanaGold’s asset portfolio of operating
Slide 16: The New OceanaGold
The New OceanaGold Diversified Asset Portfolio Underpinned by Long Life, High Quality Projects Haile: Didipio: Didipio Long-Term Growth Long-Term Foundation High grade (+2 g/t Au) Significant long-term cash flow reserves, open pit gold project generation from one of the with leading AISC profile & l
Slide 17: Haile Gold Mine
Haile Gold Mine 17 OceanaGold Corporation Innovation Performance Growth
Slide 18: Haile's Favorable Project Location & Jurisdiction
Haile’s Favorable Project Location & Jurisdiction South Carolina & the United States Represent a Tier 1 Mining Jurisdiction Located 3 miles NE of the town of Kershaw in Lancaster County, South Carolina; approx. 30 miles south of Charlotte, North Carolina Deposit sits within the Carolina Slate Belt o
Slide 19: Haile – Project Overview
Haile – Project Overview Project Highlights Mineral Reserves Assumptions Tonnes Contained oz Category Grade (g/t) Gold Price (US$/oz) US$1,250 (000s) (000s) Silver Price (US$/oz) US$20.00 Proven 19,592 2.19 1,382 Discount Rate 5% Project Parameters Probable 10,917 1.82 636 Average Mill Feed Rate (to
Slide 20: Haile – Timeline to Production
Haile – Timeline to Production 2015 2016 Q1 – Q4 Q1 Q2 Q3 Q4 Mining fleet delivered Begin drilling de-pressurization wells Begin stormwater pollution prevention work, mine and plant Execute construction at water treatment plant and other areas Begin mining at Mill Zone Construction of WTP and JPAG B
Slide 21: Haile Long Section
Haile Long Section Significant potential opportunity beyond current open-pit reserves 3.5 km CHAMPION SMALL SOUTH PIT LEDBETTER SNAKE 274 m DEPTH (m) HORSESHOE MUSTANG 62.5 m of 9.6 g/t 117 m of 5.5 g/t PALOMINO 70.1 m of 5.5 g/t 610 m 2m ounces 2P Reserve @ 2.06 g/t ($950Au) 4m ounces M&I + 800 koz
Slide 22: Haile Regional Exploration Opportunities
Haile Regional Exploration Opportunities Numerous regional exploration opportunities identified to date 22 OceanaGold Corporation Innovation Performance Growth
Slide 23: OceanaGold
OceanaGold 23 OceanaGold Corporation Innovation Performance Growth
Slide 24: OceanaGold
OceanaGold 2015 Guidance (excluding Waihi) Gold Production Copper Production Cash Costs All-In Sustaining Costs 295,000 – 335,000 ounces 21,000 – 23,000 tonnes $450 – $530 per ounce $770 – $840 per ounce Didipio LOM: 2030 Gold Copper Gold Standard Ventures Waihi(1) Haile(1) Gold Gold Silver Vancouve
Slide 25: OceanaGold Value Proposition
OceanaGold Value Proposition Sound operators and developers with compelling financial metrics Financial Operational Over 25 years of operating & Strong balance sheet development experience Sector leading free cash flows In-house mine development team Significant experience with different First quart
Slide 26: Executive Management Team
Executive Management Team Mick Wilkes Managing Director & Chief Executive Officer • Over 30 years industry experience • Developed major projects in Australia & SE Asia • Strong Operations background in hard rock mining • Strong in Community and Government relations • Extensive SE Asian experience Ma
Slide 27: OceanaGold Vision & Strategy
OceanaGold Vision & Strategy We will be a mid-tier, multinational gold producer delivering superior shareholder returns in a safe and sustainable manner by developing and operating high quality assets. We will be the partner, employer and mining company of choice. Operating efficiently Maximising va
Slide 28: Financial Position (as at 30 Jun 2015)
Financial Position (as at 30 Jun 2015) LIQUIDITY Total debt at end of 2014 Cash $49m $118 million (interest paid: $12m) Undrawn Revolving Credit Facility* $72m Total debt at end of 2013 TOTAL LIQUIDITY $121m $194 million (interest paid: $27m) DEBT Total debt at end of 2012 Revolving Credit Facility*
Slide 29: New Zealand Overview
New Zealand Overview Over 7 million ounces in resource1 provides strong optionality Municipality 2015 Guidance (excluding Waihi) OGC operation Gold Production oz 195,000 – 215,000 OGC project AISC per oz $1,090 – $1,140 New asset Auckland Waihi Cash Costs per oz $850 – $900 Wellington Guidance Assum
Slide 30: Waihi Transaction Overview
Waihi Transaction Overview Waihi represents a high-grade, low-cost asset in a stable, well-known jurisdiction Signed Definitive Acquisition Agreement with Newmont for US$101m Auckland Waihi Purchase price to be funded from existing cash and increased corporate revolving credit facility Economic inte
Slide 31: Recent Historical Production and Reserves
Recent Historical Production and Reserves Waihi has a track record of reserve replenishment over its 27 year history Waihi Historical Production, Year End Reserves and Cumulative Production since 2007 1,000 1,00 0 900 864 900 800 732 800 700 622 700 555 500 600 600 460 458 500 410 350 500 360 360 36
Slide 32: Waihi's Significant Exploration Upside
Waihi’s Significant Exploration Upside Interests in three groups of highly prospective tenement packages Regional Group (22-75 km from Waihi) • Historical production of 11.3 Moz Au and 53 Moz Ag from 50 epithermal deposits • 4 exploration permits • Includes 150 koz of gold resources in the Ohui regi
Slide 33: Philippines Highlights
Philippines Highlights Significant cash flow generation from one of the lowest cost gold mines globally Municipality OGC operation 2015 Guidance OGC project/tenement Island of Gold Production oz 100,000 – 120,000 Peer Project Luzon Copper Production t 21,000 – 23,000 San Fernando (Port) AISC per oz
Slide 34: Didipio Cash Flow Profile
Didipio Cash Flow Profile Strong, steady free cash flow generation over life of mine After-Tax Cash Flow Profile(1) (USDm) 150 133 135 123 123 100 88 87 84 78 62 69 72 66 60 50 37 USDm 0 -4 -1 -7 -8 -6 -9 -6 -19 -15 -23 -50 -49 -52 -59 After Tax Cash Flow (before Capex) Capex FCF Trend -100 2015 201
Slide 35: Didipio Underground
Didipio Underground Early access to high grade underground ore enhances cash flow profile Underground First high Capex of Expected U/G U/G mining rate portal grade U/G ore $116m over 3 mining costs of 1.6 Mtpa by completed expected in years; avg $27/t 2020 late 2017 $7.5m / yr on sustaining capex 35
Slide 36: FTAA Exploration Opportunities
FTAA Exploration Opportunities Drilling Highlights (MetEx): 31m @ 0.35 g/t Au & 0.85% Cu 28m @ 0.65 g/t Au & 0.27% Cu 13m @ 0.75 g/t Au & 0.25% Cu Cabinwangan Mogambos 7m @ 1.16 g/t Au & 0.57% Cu 1.6 KM Rock Sampling Highlights: 8.09 g/t Au & 4.21% Cu 1 KM 3.20 g/t Au & 1.73% Cu 2.86 g/t Au & 2.09%
Slide 37: Paco Exploration
Paco Exploration Geophysical surveying completed, preparing to drill Adjacent to Boyongan and Bayugo copper-gold porphyry deposits (Salangan - Philex) Drill targets identified; drilling to commence in Q3 2015 37 OceanaGold Corporation Innovation Performance Growth
Slide 38: Expanding New Zealand
Expanding New Zealand Encouraging results from brownfields exploration program Current Drilling Future Drilling Exploration program includes surface and North of Macraes underground drilling NZ$8m spend over next two years on exploration at Macraes Goldfield South of Macraes 12 surface drilling targ
Slide 39: Organic Growth in New Zealand
Organic Growth in New Zealand Organic growth demonstrates potential for increased value from NZ asset base Blackwater Project Macraes Gold-Tungsten Project Near Reefton At Macraes • PEA completed with robust financials • Scoping study complete • Currently reviewing mining method; • Advancing feasibi
Slide 40: Gold Standard Ventures (Nevada)
Gold Standard Ventures (Nevada) Strategic investment in one of the most prolific gold regions globally Private placement in GSV.V for 14.9% of common shares for C$16.2m Technical representation and anti-dilution provision with right to increase equity stake to 19.9%1 GSV holds 2nd largest land packa
Slide 41: Sustainability
Sustainability Unwavering commitment to our Focused on building capacity, communities & environment not dependency Achieved ISO14001 certification Industry best rehabilitation for Didipio programs 41 OceanaGold Corporation Innovation Performance Growth
Slide 42: Investing in Our Local Communities
Investing in Our Local Communities Working together with our communities to leave a positive, long lasting legacy Community Investment Composition COMMUNITY Infrastructure INVESTMENT Education Enterprise Development Health & Nutrition Capacity Building Sports and Socio-Cultural 42 OceanaGold Corpora
Slide 43: Board of Directors
Board of Directors Jim Askew Chairman • Mining engineer with over 35 years broad international experience as a Director/CEO for a wide range of international publicly listed mining, mining finance, and other mining related companies • Served on the board of numerous resource public companies, which
Slide 44: Mineral Resources and Reserves (as at Dec 2014)
Mineral Resources and Reserves (as at 31 Dec 2014) RESOURCES MEASURED INDICATED MEASURED & INDICATED INFERRED RESOURCE Au Au Ag Ag Cu Cu Au Au Ag Ag Cu Cu Au Au Ag Ag Cu Cu Au Au Ag Ag Cu Cu AREA Mt g/t Moz g/t Moz % Mt Mt g/t Moz g/t Moz % Mt Mt g/t Moz g/t Moz % Mt Mt g/t Moz g/t Moz % Mt MACRAES
Slide 45: oceanagold.com
oceanagold.com Innovation Performance Growth