Good morning and afternoon, ladies and gentlemen, and welcome to OceanaGold 2022 Third Quarter Results Webcast and Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. Also note that this call is being recorded on Thursday, October 27 at 8:00 A.M. Eastern Time. Now I would like to turn the conference over to Brian Martin. Please go ahead, sir.
Good morning. Welcome to OceanaGold's Third Quarter 2022 Results Webcast and Conference Call. I'm Brian Martin, Senior Vice President of Business Development and Investor Relations for OceanaGold. We're joined today by Gerard Bond, President and CEO, Scott McQueen, Chief Financial Officer, David Londoño, Chief Operating Officer, Americas, and Scott Sullivan, Chief Technical and Projects Officer. Though Peter Sharpe has joined us as our Chief Operating Officer for the Asia Pacific region, he is currently visiting the operations as part of his onboarding, so Scott Sullivan will talk to the results for those sites. Before we proceed, please note that references in this presentation adhere to international financial reporting standards and all figures are denominated in U.S. dollars. Also, please note that the presentation contains forward-looking statements, which by their very nature, are subject to some degree of uncertainty.
There can be no assurances that our forward-looking statements will prove to be accurate, as future results and events could differ materially. I refer you to the disclaimers, including those on forward-looking statements in our presentation. I will now turn the call over to Gerard Bond for opening remarks.
Thank you, Brian, and good morning, everyone. Thanks for taking the time to join with us today. I'm happy to say that our third quarter results were broadly in line with plan, and while it was the low quarter for production as we guided to at the start of the year, we achieved some significant accomplishments in the period. Notably, we continue to have strong safety performance during the third quarter, which is the number one priority across the business. We achieved a very pleasing 15% reduction in the total recordable injury frequency rate relative to the previous quarter. At 2.3 per million hours worked, we had the lowest ever total recordable injury frequency rate for the company on a 12-month rolling basis. This is a reflection of the care being taken across the business to keep each other safe.
We will remain focused on this and strive to reduce the severity of any injuries that do occur. I'm also happy to report that we remain on track to deliver our full-year guidance. We've produced 351,000 oz of gold year-to-date, which puts us pretty much bang on 75% of the midpoint of our full-year gold production guidance range. With a strong fourth quarter expected due to high grades at Haile, we remain well on the way to delivering on this key commitment to the market. The permitting process at Haile is progressing, albeit with a slight change in the sequence of permit issuance from which we previously thought. Pleasingly, the Supplemental Environmental Impact Statement was published in August, and we understand that the Army Corps of Engineers is satisfied we have addressed the few comments received.
Last week, the Section 401 water quality certification permit notice was issued by the South Carolina Department of Health and Environmental Control, or DHEC, which we expect to take effect in mid-November. There are a few permits to come, but the 401 certification sets the stage for the remaining permits to follow. We have good engagement with all regulatory agencies and remain confident of obtaining them in the fourth quarter. In the interim, we were delighted to have received approval during the quarter to commence early preparation of underground operations, which has allowed us to begin development of the underground portal and decline and the two ventilation portals. This work is progressing well with us having completed to date 50 m of the 180 m permitted in relation to the production portal. David will talk about this a little more later.
Although the permitting process for the Haile expansion has taken longer than we originally expected, we're very pleased to have the SEIS published, the comments on it fully addressed, the Section 401 notice issued by DHEC, and to be progressing well with the production portal and ventilation early works. We are very much in the final stages of getting the permits. Finally, I'm happy to report that the operational and financial outcomes from Waihi have significantly improved quarter-over-quarter, with the benefit of completed grade control drilling, improving our mining performance, and leading to Waihi generating positive free cash flow in the third quarter. Now for some of the highlights from the third quarter.
We safely delivered 105,000 oz of gold production at an all-in sustaining cost of $1,554 per oz, generating $214 million in revenue, and EBITDA of $40 million. Our free cash flow in the quarter was negative $17 million, which we expected would be the case given the production and CapEx profile. We've generated $55 million free cash flow year-to-date. Our balance sheet remains strong and is well positioned with $130 million in cash and $174 million in net debt, and that includes finance leases at the quarter end. I'll now turn over to Scott McQueen to provide more detail on our financial results.
Thanks, Gerard, and good morning, everyone. As Gerard outlined, our third quarter financial results were in line with expectations. While gold production was, as expected, lower compared to the previous quarter.
Gold sold was relatively consistent quarter- on- quarter due to the timing of sales and inventory movements. However, despite the consistent sales volume, third quarter revenue of $214 million was 7% below the previous quarter due to lower average realized gold and copper prices. EBITDA was $40 million, reflecting the lower revenue, but also approximately $17 million of non-cash unrealized foreign exchange losses arising on the revaluation of our U.S. dollar-denominated revolving credit facilities. After adjusting for this non-cash charge, our third quarter adjusted net profit after tax was $6 million. This equated to an EPS of $0.01 per share, fully diluted, while operating cash flow per share was $0.08, both in line with analyst consensus. Looking ahead to the fourth quarter and as outlined at the start of the year, we continue to expect stronger gold production relative to the third quarter.
At Haile, gold production in the fourth quarter is expected to increase as mining progresses into higher grade zones. Haile's all-in sustaining cost per ounce is also expected to increase despite the higher gold production. This reflects higher expected capitalized pre-stripping, the early works underway at the Haile Underground and planned capital expenditure on waste containment facilities. The precise timing of some of these works is subject to receipt of the SEIS final record of decision and related operating permits. While the approved early works program at Haile Underground is underway, based on the expected timing to conclude the permitting process, as outlined by Gerard, Haile's 2022 full year capital expenditure is now expected to be approximately $20 million lower, with some planned works moving into 2023.
As a result, the group's 2022 full year consolidated capital expenditure is now expected to be towards the lower end of the guidance range. At Macraes, gold production in the fourth quarter is also expected to be higher than the third quarter, driven by higher feed grade and recoveries, while Macraes' all-in sustaining cost profile is expected to be lower, consistent with the higher expected gold production. At the Didipio and Waihi, gold production and all-in sustaining costs per ounce at both operations are expected to remain relatively consistent in the fourth quarter as compared to the third. Copper production at the Didipio is also expected to remain relatively consistent in the fourth quarter. I'll now turn the call over to David Londoño to discuss Haile's performance during the quarter.
Thank you, Scott, and good morning, everyone. The Haile operation continued to maintain a low injury frequency rate with 1.8 recordable injuries per million hours worked at the end of the quarter. Safely and responsibly delivering production is the highest priority at OceanaGold. I am very pleased with the efforts of the Haile team to keep each other safe. Mining at the lower grade Haile pit continued this quarter as planned, and the resulting production was 36,500 oz of gold, a slight decrease when compared to the previous quarter, but better than originally planned. Total material mined in the third quarter was 8.2 million tons, a decrease from the previous quarter due to lower equipment availability and longer haul cycles. Total ore mined, however, was 1.1 million tons, a 50% increase quarter-over-quarter.
This significant increase was a result of positive ore tonnage reconciliation in areas of historical workings, combined with faster advance rate in the pit. Mining in the Haile Pit was completed at the end of the quarter and the mine transitioned to a Mill Zone and Ledbetter phase II areas in line with the mine plan. Total mill feed was in line with the prior quarter, reflecting the ongoing benefits of improved ore fragmentation, improved ore pit blending, and much better mill utilization due to less chute blockages. Average mill feed gold grade was lower than the previous quarter, mainly due to lower-grade ore supply from Haile Pit phase I, consistent with the mine plan. Hurricane Ian made landfall in South Carolina on September 30, delivering high winds and heavy rainfall to Haile.
Recently, as a result of improved wet weather planning, better drainage systems, and better road base on the pit ramps, the mine was able to maintain operations with no material disruption either to mining or processing during this period. Mining unit costs increased compared to the previous quarter, primarily due to lower total mining movements. High implant maintenance work on the mobile fleet also continues to impact productivity and mining unit costs, and those on plant maintenance is a primary focus of the Haile Asset Management Plan and continuous improvement initiatives. Processing unit costs increased marginally compared to the previous quarter due to higher cost of reagents and mechanical and electrical parts, which were partially offset by lower reagent consumption. Third quarter all-in sustaining cost was $1,552 per oz, with cash cost of $1,175 per oz.
Now for more detail on the permitting process. During the quarter, the U.S. Army Corps of Engineers published the Haile SEIS, which was followed by a scheduled 30-day public comment period. No material comments were received. The United States Army Corps of Engineers has advised us that all comments received in the review period have been adequately addressed, and that it is ready to issue both the final record decision and the Clean Water Act Section 404 permit. The expectation is that this will occur once the Clean Water Act Section 401 water quality certification that was recently issued by DHEC will take effect. On October 21st, DHEC published a notice that it has issued the Section 401 certification, which will be effective in early November 2022, unless a request for DHEC board review is submitted.
We do not anticipate that any review will be requested, given the agreement reached earlier this year with the conservation community in South Carolina to provide additional financial assurance to the state as part of the SEIS process. We also engaged with these groups throughout the project permitting process. Shortly after the SEIS record of decision on 404 permit is issued, DHEC will issue the mine permit, which will effectively conclude the permitting process for Haile Mine expansion. We expect this all to occur in the fourth quarter. As Gerard mentioned, DHEC also approved an early works program which allowed the team to begin preparation of underground operations, including advancing initial development of the main underground production portal and decline, and drilling of the intake and exhaust ventilation portal. All of this is within the current permitted area.
This approval was granted late in the third quarter, and as of today, the main decline has advanced approximately 50 m and the intake and exhaust ventilation portals have advanced a combined total of approximately 75 m. With the early work programs underway and our expectations around the issuance of the final record decision and the mining permits to be provided in the near term, we continue to expect ore to be delivered from the Haile Underground in the fourth quarter of 2023, and remain on track to deliver significant production growth at Haile over the next couple of years. I will now turn the call over to Scott Sullivan to discuss the results from the Didipio and our New Zealand operations.
Scott, are you there? Okay, Scott may be having some problems with his audio, so I'll take it from here. We'll start with the Didipio. The Didipio continues to be one of the safest operating mines in the industry, and it reported a recordable injury rate per million hours worked of 0.8 by the end of the quarter. The operation mined at its full 1.6 million tons per annum underground and produced over 25,000 oz of gold and over 3,500 tons of copper. That's a slight decrease when compared with the previous quarter due to lower copper and gold grades mined, but was in line with the full year mine plan.
Total mined material in the third quarter slightly decreased due to a minor reduction in underground development rates as the operation advanced through areas with wetter ground conditions. Mill feed in the third quarter also slightly decreased when compared to the previous quarter due to variations in planned maintenance, which included a SAG mill reline. There were also multiple power interruptions to the mill at the end of the quarter due to impacts to the network during Typhoon Karding. Underground mining unit costs and processing unit costs both increased as a result of increased electricity tariffs, consumables, and other costs, while processing costs were also impacted by the planned plant maintenance shutdown.
Didipio's third quarter site all-in sustaining cost was $913 per oz, while cash costs were $818 per oz, generating strong margins despite the decrease in average realized gold and copper prices. We're moving on to Macraes. Macraes had a 23% reduction in its total recordable injury frequency rate quarter-over-quarter, and reported 5.1 recordable injuries per million hours worked. The team there is doing a lot of very targeted work to improve the safety performance of the site and pursue the elimination of high impact injuries, and we're starting to see some early signs of this having the desired effect. The operation experienced record monthly rainfall in July of 200 mm.
Naturally, this impacted negatively on open pit mining and underground mining operations as access to the Frasers Underground via the Frasers West pit was restricted. Along with lower grade from Golden Point Underground, this resulted in lower quarter-over-quarter gold production of 29,400 oz. During the third quarter, open pit mining occurred in Deepdell, Frasers West, Cayton and Innes Mills, while underground mining was at Frasers Underground and Golden Point Underground. While development rates at Golden Point Underground continued to be impacted by poor geotechnical conditions around the Golden Point fault, progress was made, and decline development during the quarter opened up access to the Round Hill ore system, with first ore drive turnouts commencing at the end of the quarter.
Mill throughput decreased slightly compared to the previous quarter, despite a higher percentage of harder Deepdell ore and a planned stoppage to conduct SAG mill maintenance during the quarter. Gold recovery was lower compared to the previous quarter due to a high percentage of carbonaceous ore from Deepdell phase IV. This adversely impacted carbon-in-leach recoveries. We expect that optimized blending strategies and increased underground ore volumes in the fourth quarter of the year to improve recoveries. The third quarter site all-in sustaining cost was $1,924 per oz, with cash costs of a shade under $1,300 per oz. Both an increase from the previous quarter due to lower mining productivity and gold production and sales combined with higher costs. If I move now on to Waihi.
Waihi's total recordable injury frequency rate was consistent with the previous quarter as this team continued to safely deliver production. In the quarter, Waihi produced 13,690 oz of gold, an increase of 67% compared to the previous quarter. This is a significant quarter-on-quarter increase, which we did expect because mining during the third quarter progressed into higher confidence areas of the Martha underground deposit, which resulted in improved stope performance, increased ore tons, and higher grade mined. Mill feed increased 37% from the previous quarter. With the benefit of the grade control drilling program data and as mining has progressed into these areas of higher confidence, it's expected that mining rates will continue to increase over the coming quarters.
However, there remains a risk that annual production rates may not reach levels previously projected on a multi-year basis. Underground mining rates, processing unit rates, and site G&A all decreased quarter- over- quarter, primarily as a result of increased mined and milled tons. Last quarter, we lodged the Waihi North project consent application, and the receiving councils formally accepted the application as complete for processing and issued a number of requests for additional information, which we will respond to ahead of public consultation next year. At the completion of the consultation stage, the councils will determine the formal hearing process for considering the consent application. Along with the consent application, we continue to advance various technical studies and exploration at Wharekirauponga to support the Waihi North pre-feasibility study. Drilling to date and mining optimization studies strongly support further growth of the indicated resource.
As we've mentioned before, a targeted indicated resource size of 1.1 million oz has been determined as optimal for initial development plans, which provide improved mine design opportunities in support of a pre-feasibility study, which is expected to be completed around the end of 2023. Moving to the final slide. After three solid quarters, we are well on our way to safely and responsibly delivering on the production and financial expectations set out at the start of this year. We know that to be a key requirement of the market. We are focused on maximizing production and free cash flow, and we have three key new programs addressing the value potential here, namely asset management, procurement, and continuous improvement. We've recently recruited proven experts in each of these areas to accelerate the realization of this potential.
We've seen some early-stage successes in the procurement space because our procurement expert has been the longest serving new joiner, and there's a lot of opportunity for improvement in the other two areas as well. We've made good progress in our journey of realizing the organic growth in our portfolio, and shareholders can be certain that we remain focused on creating shareholder value and higher returns to shareholders. I'll now turn the call back to the operator and open up to any questions.
Thank you, sir. Ladies and gentlemen, if you would like to ask a question at this time, please press star followed by one on your touch-tone phone. You will then hear a three-tone prompt acknowledging your request. If you would like to withdraw from the question queue, please press star followed by two. If using a speakerphone, you will need to lift the handset before pressing any keys. Please go ahead and press star one now if you do have a question. Your first question will be from Ovais Habib at Scotiabank. Please go ahead. Please unmute your line, Ovais. Hello, Mr. Habib, can you hear us? Your line is open. Getting no response. Next question will be from Wayne Lam at RBC.
Yeah, thanks. Morning, guys. Just wondering at Didipio, you guys have seen quite a big increase in unit costs with the higher energy rates and labor. I just wondering as you look into next year, how much of that you see as transient? Or, should we anticipate costs to be relatively similar to the implied H2 guidance given the cost pressures you're seeing on multiple fronts?
Yeah. Thanks, Wayne. Look, Didipio's energy costs are primarily impacted by coal costs in the Philippines, and your view on what they're going to be in the next few years is as good as mine. Overall, year-to-date, I mean, its performance is broadly in line with the guidance that we've given for the year. As we said during the prepared remarks, the production volumes and certainly their stability in the relative rate of increase of costs. We don't expect the cost performance to be any worse.
I would note that as it relates to labor costs, the Philippine peso, a bit like as we've experienced in New Zealand as well and also Australia, to the extent that we have costs in Australia, the depreciation of those operating currencies against the U.S. dollar has given us a really good buffer in a U.S. dollar unit cost sense.
Okay, got it. Thanks.
Thank you.
Just wondering on the increase in the plant capacity there, the targeted mill feed for the year would imply relatively flat throughput quarter-over-quarter. Just wanted to confirm whether the mill is already able to achieve the higher max throughput. What would you need to see from the optimization study, and can you give us a sense of timing on when you might be in a position to make a decision on the higher limit?
Yeah. Well, for the benefit of all, you know, we guided this year for the mill rate to be somewhere between 3.9 million-4 million tons for the year, even though, as your question implies, we got an increase to take the mill to 4.3 million tons. The studies that we have underway both relate to mining and the plant. We just gotta try and find that peak point of value relative to, you know, the costs of, you know, any downstream works to accommodate that extra milling rate, and also make sure that the interplay between underground ore feed and the utilization of the above ground stockpile is optimized. We're not just going to chase to fill the mill.
There's this nice blend of the underground mine plan and obviously we'd love to get more from the underground, given that's where the higher grade gold is. The ore body, as you know, is open at depth. Again, we want to make sure that that interplay between those two sources, underground and open pit, is optimized rather than rushing to fill the mill, necessarily. But it's nice to have that little bit of headroom. As to the timing of the studies, I think they'll be finished early next year.
Okay, perfect. Maybe just last one from me. Just wondering at Haile, how far are you guys able to ramp down before the record decision is fully in hand?
Oh, ramp down? Yeah, probably about another month, roughly. I mean, we're advancing at a good rate. In terms of the permit that we have, we've got a bit of headroom there to go. But around a month from now.
Okay, great. Thanks.
You know, we hope to get it all done in that period of time.
Perfect. Thanks for taking my questions.
Thank you, Wayne. Appreciate it.
As a reminder, ladies and gentlemen, if you do have a question, please slowly press star followed by one on your touch-tone phone. At this time, it appears that we have no further questions. Please proceed.
Sorry, was that an attempted question there?
Yes. Sorry, there's actually a question. Sorry to jump in. There is a question on that we got through the webcast, and this is from Ovais . He would like to know that at Haile, the receipt of the SEIS permit seemed to be close. Based on DHEC approving early works and assuming SEIS permit in 2023, how are we looking at 2023?
David, I'll have a go, and then you can color it in. I mean, I think as David said, you know, based on the work that we're doing now and the expected timing of the receipt of all associated permits, we're on track to get first ore out of Haile Underground towards the end of 2023. Which, if you go back to the technical review that we put out back in February, is broadly consistent with that. We always knew that there would be. The first ore we were targeting to get in towards the end of, and be a small sliver of the 2023 ore feed. As David said earlier, that remains the current expectation.
David, anything you wanna add to that?
No, that's pretty good. With the current advance, with the early advance, we are targeted to deliver first ore in fourth quarter, early in the fourth quarter.
Thanks, Ovais. We appreciate your persistence by having a web-related question. Any other questions?
There's actually one more from him, actually.
Oh, okay.
At Waihi we saw production coming up nicely due to grade control drilling. How far is grade control drilling ahead of production? Are you now confident that production has stabilized?
Oh, great question. Yeah, we've grade control drilled the remainder of this year and all of next year. Naturally, you can expect that we're going to be, you know, keeping well ahead of it going forward. We expect that next year's production will be higher than this year's production. As I think I was alluding to in the comments, it may not get. We're due in the middle of our life of mine planning now, and we've obviously got the better drilling data that allows us to inform the rate over a longer-term period. Our expectation is that it may not get up to the circa 90,000 oz, 90,000 oz-100,000 oz that we had previously.
It would be certainly much higher on a go-forward basis sustainably than the rates that we will achieve in this year. Pleasingly, just to make the point again, you know, we expect, as we saw, if the rates of performance in the quarter just gone were achieved, to be free cash flow positive as a result.
We've got another question coming in from the webcast. It's from Michael Parkin at National Bank. Does Waihi's grade control drilling flow through OPEX and total cash costs in AISC?
Yes, it does. Certainly does, Mike.
He is also on the phone. I will put him through. Mr. Parkin, your line is open.
Thank you. That was good color. Thanks, guys.
Thanks, Mike.
At this time.
Operator.
We have no other phone questions.
Great. Thank you. Look, thanks everyone for joining us. That concludes the webcast and conference call. A replay will be available on our website later today. On behalf of the management team and everyone at OceanaGold, thanks for joining us, and I wish you a very pleasant rest of the day. Bye for now.
Thank you. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we do ask that you please disconnect your line. Enjoy the rest of your day.