OceanaGold Corporation (OGC) Earnings Call Transcript & Summary

Hello, and welcome to the Annual General and Special Meeting of Shareholders of OceanaGold Corporation. During the meeting, we'll have a question-and-answer session. You can submit questions or comments at any time by clicking on the Q&A icon. It is now my pleasure to turn today's meeting over to Paul Benson, Chair of OceanaGold Corporation. Mr. Benson, the floor is yours.

Thank you. Good morning, ladies and gentlemen. My name is Paul Benson, and I am the Chair of the Board of OceanaGold Corporation, I'd like to welcome you to today's Annual General and Special Meeting of Shareholders. In accordance with the articles of the company, I will act as Chair for this meeting. Later on, I'll ask Ms. Liang Tang, Company's Secretary, to take you through the voting process and formal business of the meeting. Please be advised that today's webcast is being recorded. Some of the statements made at this meeting may be considered forward-looking. We caution you that the results of future operations may differ from those anticipated. We urge you to review the cautionary statements and other information contained in our filings on SEDAR+, which identifies a number of factors that could cause actual results to differ materially from those mentioned in any forward-looking statements made at the meeting. As it is now past 9:00 a.m. Canadian Eastern time, and a quorum is present, I declare the meeting open. To begin, I'll introduce my fellow directors on the call today. Mr. Ian Reid joined the company in April 2018 and was Chair of the Board between June 2019 and September 2021. Ian brings more than 30 years' experience in managing the successful growth and operations of major multinational companies. Ian Chair's Sustainability Committee and is a member of the Governance and Nominations Committee and the Audit and Risk Committee. Mr. Craig Nelsen joined the company in February 2019. Craig brings extensive exploration, management and capital markets experience. He Chairs our Remuneration, People and Culture Committee and is a member of our Sustainability Committee and the Technical Committee. Ms. Sandra Dodds was appointed a Non-Executive Director of the company in November 2020. She has over 25 years of operational and financial experience as an executive responsible for business strategy, operations and performance across Australia, New Zealand and Asia. Ms. Dodds is the Chair of the Audit and Risk Committee and is a member of the Remuneration, People and Culture Committee as well as the Governance and Nominations Committee. Mr. Alan Pangbourne, was appointed Non-Exec Director in October 2022. Mr. Pangbourne has over 35 years' experience in global mining operations. Alan is the Chair of the Technical Committee and is a member of the Audit and Risk Committee as well as the Sustainability Committee. Ms. Linda Broughton was appointed Non-Exec Director in April 2023. Ms. Broughton is an experienced and highly successful mining executive with over 35 years of experience in both corporate and operational roles in a variety of environmental and mining related fields through North and South America. Linda is a member of the Sustainability Committee, the Technical Committee and the Remuneration People and Culture Committee. Mr. Gerard Bond, the President and CEO of OceanaGold since April 2022. Mr. Bond is a seasoned mining executive with extensive background in corporate finance, mergers and acquisitions, treasury and human resources and has held numerous senior executive roles in gold, nickel and aluminum sectors across North America, Europe and Australia. And finally, I'd like to welcome our newest member of the Board, Ms. Stefanie Loader, who was appointed in February 2025. Stefanie is a highly accomplished geologist and mining executive with a track record in successful mining operations, mineral exploration and project development. Her appointment brings tremendous value to our Board and to our shareholders. For today's meeting, all of our current directors of OceanaGold will be seeking election or reelection to the Board. Also on the call today are members of our executive leadership team, including Marius Van Niekerk, Chief Financial Officer; and Liang Tang, General Counsel and Company Secretary, as well as [ Eric Talbert ] signing partner of OceanaGold's annual financial statements from our auditor, PricewaterhouseCoopers LLP. I'll now pass the floor to Ms. Tang to take you through the voting process.

Thank you, Mr. Chair, and good morning, everyone. For governance purposes, particularly considering the various locations from which attendees are joining us and as provided for in the company's articles, I would like to advise that voting on all matters will be conducted by electronic ballot. Registered shareholders and duly appointed proxy holders who have properly logged in with their control numbers or user name will be able to vote. When you are invited to vote, click on the option to vote on the Computershare virtual interface, and you can register your vote for each item of business. If you are a registered shareholder or a duly-appointed proxy holder and have already voted by submitting your proxy form in advance of the meeting, it is not necessary for you to vote again today. Today, we'll be using the Computershare virtual interface to allow attendees to view the webcast, submit questions and for registered shareholders and proxy holders who have not already voted to cast votes on the items of business. Pressing the Q&A icon will open the messaging facility. From here, you can send in questions and comments. Please note that due to the time available, we may not address all questions sent through. When we arrive at the formal business of the meeting, the Chair will call for a poll to be opened on all items. For the registered shareholders and proxy holders the resolutions will appear on the Computershare virtual interface along with for and withhold or for and against voting options depending on the resolution. Simply select one of those options to cast your vote. You can change your vote as many times as you wish up until the close of the polls. When voting is closed, the final voting selection entered into your app will be recorded. These votes will be added to proxy votes received prior to the meeting. The results of the meeting will be tabulated and publicly announced after the conclusion of the meeting. If you are logged in with Computershare, you can switch between screens of the presentation, voting resolutions and messages and questions from attendees. If there is a pertinent question from the shareholders through the Computershare dashboard, I will voice this at the meeting at the appropriate time. We will now move to open the meeting, and I will turn the meeting back to the Chair, Mr. Benson.

Thank you. I've requested Ms. Tang, Company Secretary, to serve as recording secretary for the meeting. Jenny Karim of Computershare Investor Services, the registrar and transfer agent of the company is present and will act as scrutineer for the meeting. As noted, our attendance records indicate that the required quorum is present. . Computershare has provided a declaration that the notice calling this meeting of shareholders and a proxy form or voting instruction form were mailed on April 30, 2025, to all shareholders, on the record as of April 23, 2025, and the other meeting materials, including the management information circular were made available to shareholders per the notice and access provisions under applicable securities laws. Notice having been properly given and a quorum being present, I now declare the meeting to be regularly called and properly constituted for the transaction of business. Unless there is an objection, I will dispense with reading of the notice of meeting. As specified in the notice of meeting, the items of business for the meeting are receiving the financial statements of the company; the reelection of 8 directors of the company, the appointment of PricewaterhouseCoopers as auditor of the company; the approval of a nonbinding advisory resolution regarding executive compensation, the approval to hold the next Annual General Meeting of Shareholders exclusively in a virtual-only format. The approval to effect to share consolidation of all issued and outstanding common shares of the company, on a consolidation ratio of pre-consolidation common shares for one post-consolidation [indiscernible] votes cast either in person or by proxy, approval of the share consolidation and amendments to the articles require a special majority of 2/3 of votes cast, either in person or by proxy. In order to ensure this meeting covers the required business in an efficient manner, I will move all motions that are identified in the notice of meeting and we'll dispense with the seconding of such motion [indiscernible] auditors report. Copies of the financial statements and the auditor's report have been made available to shareholders as requested and have also been filed on the company's SEDAR+ profile. This is an item for the discussion and does not require a vote. Are there any questions. If there is no discussion, I'll now declare that the OceanaGold's audited consolidated financial statements for the fiscal year ended December 31, 2024, and the accompanying auditor's report have been received by shareholders as submitted to this meeting. We will now open the voting on all resolutions specified in the AGM Notice of Meeting and Management Information Circular. You can only vote for or withhold on the first 2 resolutions. The app will now display the resolutions and your voting options. Voting will remain open during the discussion of the resolutions. I'll also provide you with notice that the polls are about to close. I will ask Ms. Tang to take you through the relevant resolutions.

Thank you. The first item of business is to consider, and if thought fit, pass the following 8 items as ordinary resolutions to elect or reelect the directors. The Board has set the number of directors at 8. Details of the person seeking election or reelection are set out in the management information to hold office until the next Annual Meeting of Shareholders. Item 1 that Mr. Paul Benson to be reelected as a director. Item 2, that Mr. Ian Reid be reelected as a director. Item 3 that Mr. Craig Nelsen be reelected as a Director. Item 4 that Ms. Sandra Dodds be reelected as a director Item 5, that Mr. Alan Pangbourne, be reelected as a Director. Item 6 that Ms. Linda Broughton be reelected as Director. Item 7 Ms. Stefanie Loader to be elected as a director. Item 8, that Mr. Gerard Bond be reelected as a director.

Are there any questions in relation to the resolutions. These 8 nominees are the only persons who have been nominated to stand for election or reelection as company directors in accordance with the procedures set forth in the advanced notice policy of the company. Accordingly, no further nominations will be accepted and I declare the nominations closed. Because a poll has been demanded, I now direct that we proceed to take a vote by ballot. Please vote now. [Voting]

We now move on to Resolution 2.

The next item of business is to consider, and if thought fit, pass the following resolution as an ordinary resolution and I hereby propose that the following resolution be approved and adopted to appoint PricewaterhouseCoopers LLP as auditor of the company for the ensuing year and to authorize the directors to fix their remuneration.

Are there any questions in relation to the resolution? As there is no discussion, because a poll has been demanded, I now direct that we proceed to take a vote by ballet. Please vote now. [Voting]

We now move to the third resolution.

You can only vote for or against on this resolution. This item of business is to consider and if thought fit, pass the following resolution as an ordinary resolution and I hereby propose that the following resolution be approved and adopted. Be it resolved on an advisory basis and not to diminish the role and responsibilities of the Board of Directors that the shareholders accept the approach to executive compensation as more particularly described in the company's management information circular.

Are there any questions in relation to the resolution? If not please vote now. [Voting]

We now move to the fourth resolution.

The fourth resolution relates to approval of holding the company's AGM in 2026 exclusively in a virtual-only format. You can only vote for or against on this resolution. This item of business is to consider, and if thought fit, pass the following as an ordinary resolution to approve the company holding the next AGM in 2026, exclusively in a virtual-only format.

Are there any questions in relation to this resolution? If not, please vote now. [Voting]

We now move on to Resolution 5.

The next resolution relates to the share consolidation. You can only vote for or against on this resolution and the resolution requires approval by at least 2/3 of the votes cast by shareholders present in person or by proxy at the meeting. This item of business is to consider and if thought fit pass the following resolution as a special resolution to approve the share consolidation and offer all issued and outstanding common shares of the company on a consolidation ratio of 3 pre-consolidation common shares for one post-consolidation common share as more particularly disclosed in the company's management information circular.

Are there any questions in relation to the resolution? If not, please vote now. [Voting]

We now move to the final resolution.

You can only vote for or against on this resolution, and the resolution requires approval by at least 2/3 of the votes cast by shareholders present in person or by proxy at the meeting. This item of business is to consider, and if thought fit, pass the following as a special resolution -- resolved the articles of the company be replaced in their entirety with the form of the amended and restated articles set out in the amended and restated Schedule B to the company's management information circular.

Are there any questions? So there's no further discussion, I will close the poll on the final resolution in 30 seconds. [Voting]

Ladies and gentlemen, I now declare the polls closed, and we are pleased to announce that management holds sufficient proxy votes in favor of each of the above resolutions. Accordingly, all resolutions have been passed. Detailed results of the meeting will be announced by the company on SEDAR+ and by press release later today. I'd like to take this opportunity to thank [indiscernible] and CEO to provide an update on the company.

Thank you, Paul, and hello to all shareholders listening in, and thank you for joining us today. Though this meeting is about 2024, I will be making forward-looking statements during this presentation. So please refer to these cautionary notes as well as the risk factors set out in our 2024 Annual Information Form. 2024 was a good year in many respects for OceanaGold. We delivered strong operational and financial performance, all aligned with our overarching goal which is to increase and sustain a higher value for OceanaGold shares. Let's look at our 2024 achievements through the lens of our 5 strategic pillars. First, from a production perspective, we responsibly produced over 488,000 ounces of gold, a slight increase in production from the prior year, in line with our updated guidance. Haile was a standout, ramping up the Horseshoe underground and accessing high-grade open pit ore. We closed the year with record quarterly production in Q4 at an all-end sustaining cost that was very low. Waihi saw significant improvement throughout the year and saw its best quarterly production in 3 years in the fourth quarter. Macraes achieved record annual mill throughput without any major capital investment reflecting the strong technical capabilities of the team there. Didipio faced operational challenges with weather, mine plan changes and the effect of two fatalities, but the team responded to each of these very well, and Didipio is once again well positioned for long-term success. Operating safely and responsibly is a foundational imperative for us. So we were devastated to have had two unrelated fatal accidents at Didipio during the year. The first fatalities in many, many years. We responded to this by developing and commencing the implementation of a comprehensive safety improvement plan across all of our sites, focuses on enhancing our core safety programs, increasing the understanding of the risks of stored energy and improving the level of infield leadership. More broadly, we were again rated AA and a leader in sustainability by MSCI. Our 2024 Sustainability Report, which was released last month, highlights our achievements and ongoing commitment to workforce safety, environmental stewardship and community engagement. Our second pillar is about culture. Culture really matters as the results of the company are delivered by its people, to be a company where people want to work requires our people to feel valued, respected and empowered to contribute their skills, experiences and perspectives. I was pleased this year to say that our employee engagement score increased significantly to a score of 80% assisted by a number of company-wide programs. This outcome demonstrates that our people feel a strong level of connection to and satisfaction with working at OceanaGold. And it is disengagement that helped deliver our strong performance in 2024 and underpins our confidence in our team continuing to deliver in the years ahead. In 2024, we received over 350 nominations for our Living Our Values awards program. An internal program, which recognizes and celebrates our employees who exemplify our values of care, respect, integrity, performance and teamwork. We are extremely proud of our cohort of winners and all of those who are nominated. From a growth perspective, our third pillar, I'm pleased by the progress we made in the year on our near-mine organic growth opportunities. Mineral reserves increased by 27% to a record 6.2 million ounces and measured and indicated mineral resources increased by 8% to 8.9 million ounces, both net of mining depletion. At [indiscernible], we announced initial reserves of 1.2 million ounces an increased indicated resources to 1.4 million ounces, while also readying for the fast track approval process. We released promising drill results at Haile, Didipio and Waihi, including [indiscernible] ongoing drilling continues to present a significant opportunity for future growth. I'm delighted with our performance on our fourth pillar, financial strength and returns. Our strong production performance, supported by a rising average gold price and the ability to convert most of that higher price to the bottom line, generated a record $245 million of annual free cash flow in 2024 and record net profit of $192 million. And to be clear, that is real free cash flow. All operating cash flow minus all investing cash flow. That is this strong free cash flow was generated after funding our exciting organic growth opportunities. In line with our disciplined capital allocation framework, we use this cash to strengthen our balance sheet by repaying in full our revolving credit facility, and we ended the year with a net cash position of $192 million. We delivered shareholder returns for our dividend, and we announced a new share buyback program in the year, and we're active on it, repurchasing $24 million of shares in 2024. I look forward to another year of strong financial performance supported by operational delivery and record gold prices. Year-to-date 2025, we've continued to deliver on our commitment of enhancing shareholder value, announcing earlier this year that we have doubled our annual dividend, and we have a Board approved $100 million share buyback program for 2024. Finally, from a market rating perspective, we strengthened our market presence through consistent and broad investor engagement. We had a site visit at Haile, and we had a successful Investor Day. We also completed the successful IPO of OceanaGold Philippines, reinforcing our commitment to that region. All these efforts increased our [indiscernible] relative to our PR average over the course of the year. Looking ahead, OceanaGold has an exciting and differentiated organic growth plan. We are in a high-growth phase and expect production growth rate of around 20% from 2024 to 2026. This year's activity is laying the groundwork. Haile and Macraes will progress waste stripping to unlock high-grade ore by the fourth quarter of this year. Didipio is expected to increase underground mining rates over the next 18 months and Waihi's 2025 higher production guidance reflects our confidence in sustaining the improved mining performance there. Our activities and investments in 2025 underpin our expectations of growth in production and improved all-in sustaining costs in 2026. In addition to our existing development plans, we are continuing in 2025 with an exciting exploration pipeline. At [indiscernible], we have been continuing to drill to extend the existing resource which remains open in all directions and is our highest value exploration opportunity. At Haile, we announced exciting parties discovery in February and we are very optimistic about its size potential as it remains open in multiple directions. In fact, 2025 will see our largest exploration investment in years and I look forward to sharing these results from that program as they come in. In summary, we are pleased with our 2024 accomplishments and remain committed to our goal of safely and responsibly delivering on our 2025 guidance. We have a strong debt-free balance sheet and plenty of cash. We have no gold hedges, we have no gold prepays, and this allows us to benefit from higher gold prices. We have been able to internally fund our growth projects and exploration to clear a quarterly dividend, add cash to the balance sheet and continue our share purchases. Looking ahead, we expect 2025 to be another year of significant free cash flow generation, and we remain focused on safely driving growth and shareholder value. Thank you for joining us today and for your continued support. I will now open up the line to take any questions from shareholders.

As there are no questions, this is the end of the presentation, and I'll now turn the call back to the operator.

Thank you. This concludes the meeting. Thank you once again for your attendance. You may now disconnect. And we are clear from the call.