The OceanaGold Corp (ASX: OGC) share price will be one to watch when the market reopens tomorrow after the company made an announcement at the close of trade today.
What did OceanaGold announce?
OceanaGold announced an updated mineral resource estimate for the Martha Underground Project at the company's Waihi Gold Mine located in New Zealand.
As per the announcement, the Martha Underground resource continues to grow following further investments in exploration drilling in 2019. Infill and extensional drilling has resulted in an additional 440,000 ounces of gold, accompanied by an increase in average grade of both Indicated and Inferred resource categories.
OceanaGold commented that the development of the Martha Underground Project continues to progress well with first production expected in the second quarter of 2021.
The Martha Underground along with the Wharekirauponga (WKP) prospect form the basis for the Waihi District Study. This will be published as a preliminary economic assessment and is expected to be completed in the second quarter of 2020.
Drilling at the Martha Underground commenced in 2017 and since that time, the company has drilled nearly 100 kilometres from both surface and underground drilling. Over the past two years, underground drilling has taken place along 1.8 kilometres of drill drives beneath the Martha open pit.
OceanaGold outlook
For 2020, OceanaGold expects to drill 25,000 metres in the Martha Underground with a primary focus on resource definition.
In addition to the significant resource at Martha Underground, the company has a revised exploration target of 6 to 8 million tonnes of ore grading 4 to 6 grams per tonne. The company will continue to target new resources and their conversion throughout the following years.
In all, OceanaGold continues to be very excited for the future of Waihi.
Previous FY2020 guidance
Today's announcement follows a release from the company at the beginning of the week regarding its FY 2020 guidance. According to the release, the company expects to produce 360,000 to 380,000 ounces of gold in FY20. This compares to gold production of 470,601 ounces in FY 2019.
FY20's guidance comprises 180,000 to 190,000 ounces from OceanaGold's Haile operation; 160,000 to 170,000 ounces from its Macraes operation; and 18,000 to 20,000 ounces from its Waihi operation. The company's troubled Didipio operation was excluded from its guidance.
