Australia’s OceanaGold Corp (TSX,
ASX: OGC) lowered Tuesday its annual gold and copper output targets for
the year after halting processing at its Didipio mine, in the Philippines,
due to an ongoing dispute with the local government around its license to
operate.
The mid-tier gold producer cut its full-year production guidance to 460,000-480,000 ounces of gold and 10,000-11,000 tonnes of copper, assuming no further production or sales for the remainder of the year at Didipio.
Previously, Melbourne-based company
had said it expected to churn out 500,000-550,000 ounces of gold and
14,000-15,000 tonnes of copper for the year.
Since early July, local government units from the province of Nueva Vizcaya have blocked access to and from the Didipio mine site, in response to a directive from the Governor to “restrain” the company’s operations.
Provincial authorities claim they
have been largely bypassed in the permit renewal process, which existing laws
place under the national government’s realm.
Later that month, the company suspended underground mining, but kept processing ore at the site, located 270 km north of capital Manila.
OceanaGold sought a court
injunction in September as part of its appeal against the Nueva Vizcaya
provincial court ruling denying its request to end what it called an
“unlawful restraint of operations”.
“With the timing of the Court of Appeals injunction decision uncertain, and efforts to finalise a renewal of the FTAA (Financial or Technical Assistance Agreement) ongoing, we have no other choice but to temporarily suspend production at Didipio,” president and chief executive, Mick Wilkes, said in the statement.
“This is a very disappointing
outcome for the company, our shareholders and our truly valued Filipino
workforce,” he noted.
OceanaGold has overcome conflict
with the Philippines government in the past, including a 2017 plan by former environment and natural
resources secretary Regina Lopez to suspend several mining
operations in the country.
Didipio, which began production in
2013, has a measured and indicated resource of 1.3 million ounces of gold and
160,000 tonnes of copper.
Other than Didipio, OceanGold has three more mines — Haile in the United States, and Macraes and Waihi in New Zealand.