Join our daily newsletter At The Bell to receive exclusive market insights
- The New Zealand government’s new pandemic measures have forced OceanaGold Corp (OGC) to cease mining operations at the Macraes Mine
- The company is reducing staff at the site but continues to process stockpiled ore
- Furthermore, the company has halted development of the Martha’s Underground project at the Waihi Gold Mine to comply with the Alert Level Four
- The government mandate is expected to last four weeks and aims to stem the spread of COVID-19 throughout the country
- OceanaGold (OGC) is down a slight 0.55 per cent, with shares trading at $1.80 each
The New Zealand government’s new pandemic measures have forced OceanaGold Corp (OGC) to cease mining operations at the Macraes Mine.
New Zealand has officially moved into Alert Level Four and, as a result, all non-essential businesses and industries will have no choice but to close.
The government has implemented this plan while case numbers in the country are relatively low, at only 238 confirmed cases.
As mining does not qualify as an essential service, operations at OceanaGold’s Macraes and Waihi properties have been hindered.
Even though mining at Macraes has ceased, the company continues to process stockpiled ore. OceanaGold claims that stockpiles are more than sufficient for four weeks’ processing and therefore shouldn’t impact overall quarterly production.
The development of the Martha’s Underground mine expansion at Waihi has also ceased. Maintaining the project during the interim is likely to cost the company around A$2.1 million.
Despite the halt, OceanaGold expects the Martha Underground project to meet its planned completion date.
OceanaGold’s Acting President and CEO, Michael Holmes, appears to be in favour of the government’s efforts.
“These unprecedented times require all of us to follow the strict guidance of government authorities, to minimise and contain the spread of COVID-19 for the health and wellbeing of our global team, operations, and the communities where we work and live.”
“We remain in close contact with government authorities and are working closely with our workforce to support them through this global crisis,” Michael said.
The company was quick to point out that the Haile gold mine in the U.S. remains fully operational. As a result, OceanaGold has not withdrawn its 2020 guidance and still expects to meet its quarterly production figures.
However, if the outbreak impacts Haile or Macreas much further, the company may have to withdraw its previous guidance.
OceanaGold (OGC) is down a slight 0.55 per cent, with shares trading at $1.80 each at 11:29 am AEDT.
