Good morning and afternoon, ladies and gentlemen. Welcome to the OceanaGold 2022 second quarter results webcast and conference call. At this time, all participant lines are in a listen-only mode, but 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 the call is being recorded on Thursday, July 28 at 5:30 P.M. Eastern Time. I would like to turn the conference over to Sabina Srubiski. Please go ahead.
Thank you Sylvie. Good evening and good morning. Welcome to OceanaGold's second quarter 2022 results webcast and conference call. I am Sabina Srubiski, Director of Investor Relations for OceanaGold. I'm joined today by Gerard Bond, OceanaGold's President and CEO, Scott McQueen, Chief Financial Officer, Scott Sullivan, our current Chief Operating Officer, Asia Pacific, and soon to be Chief Technical and Projects Officer, and David Londoño, our Chief Operating Officer, Americas. Brian Martin, our new Senior Vice President, Business Development and Investor Relations, is taking time to be with his family following the birth of their second child, and we wish them all the best. Before we proceed, please note that references in this presentation adhere to International Financial Reporting Standards, and all financial figures are denominated in US dollars unless otherwise stated.
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 the forward-looking statements in our presentation. I will now turn the call over to Gerard Bond.
Thanks Sabina. Good evening, good afternoon, good morning, everyone. Thanks for taking the time to dial in today. I've now been President and CEO of OceanaGold for four months, and some of you may recall that on joining the company, I stated my goals were to safely and responsibly drive improved operating and financial performance, realize the full potential of the company's growth opportunities, and to maximize free cash flow generation value and returns to shareholders. In recent months, I've met with a large number of our shareholders, some of whom have been strong supporters of OceanaGold for many years. It is clear that our shareholders see the growth and value potential in our portfolio of assets and are relying on management to execute to plan.
Today, I'm pleased to report on how we've gone in the second quarter and year to date, which is very much in line with plan. Also, what we expect for the remainder of the year, and to take the opportunity to update you on a few other developments. I describe our second quarter results as solid. They were in line with plan and led to a strong first half performance. As a result, we've been able to strengthen our balance sheet from where it was at the start of the year with lower drawn debt and an improved leverage ratio. Today, we're also updating our 2022 guidance. Gold production guidance is unchanged, with expected higher gold production from Haile and the Didipio offsetting lower production expected from Waihi.
The Didipio's strong production performance, both year to date and looking forward, has also allowed us to increase copper production guidance for the full year. Our expected all-in sustaining cost has increased by around $100 per ounce or 7.5%, primarily due to inflationary impacts. We're now expecting lower total capital expenditures for the 2022 year. Scott McQueen will walk you through our guidance changes shortly. Early this week, we announced some new executive leadership appointments, and today I'm pleased to announce one more new appointment to the team, our new Executive Vice President, Sustainability. Finally, later in the presentation, I'll cover off on our delisting from the ASX, which was separately announced this morning, and the planned move of our corporate headquarters to Vancouver in coming months. First, let's review the highlights of the second quarter results.
Just before I do, operator, can you just check that I'm online? I've got calls from the backup line from you. Is everyone able to hear me?
Yes sir. You're coming in nice and clear.
Oh, fantastic. Okay. Well, everyone can take comfort that the backup line also works. So if I just start with the highlights of the second quarter. The health and safety of our workforce is our top priority. At the end of the second quarter, we had a total recordable injury frequency rate of 2.7 per million hours worked, which is an improvement from the previous quarter and a good reflection of the care being taken across our business to keep each other safe. Our injury rates are currently highest at Macraes, and as part of the focus to reduce injuries there, the site held two safety stop days in the quarter to make clear our commitment to a safer workplace. In the quarter, we also commenced safety maturity assessments at all of our sites, which have now been completed.
What these will do, feed into the development of a new three-year safety strategy that will look to make all of our workplaces even safer. COVID-19 had a variable impact across our business during the quarter. There was a quarter-on-quarter increase in COVID-related absenteeism at Macraes, where 70% of the workforce experienced a COVID-19-related absenteeism during the quarter. At Waihi, the level of COVID-related absenteeism was down quarter-on-quarter, but still disrupted the attendance of around a third of the workforce in the period. Haile had no COVID-related absenteeism, and the Didipio reported only one case in the quarter. Going forward, we expect COVID-19 related absenteeism to persist in New Zealand over the rest of this year, and we'll continue to monitor and manage COVID-related risks at all of our operations. On to production.
Consolidated gold production in the second quarter was 112,000 ounces, in line with our full-year plan. As we said at the start of the year, we anticipated that the second and third quarter production for 2022 would be softer than the first quarter, mainly due to grade, before strengthening again in the fourth quarter. Second quarter consolidated cash costs were $903 per ounce, and our all-in sustaining cost was $1,430 per ounce, reflecting both lower production and also inflationary pressures, mainly higher fuel and energy prices. Lower copper prices also impacted our unit costs. Year to date, our all-in sustaining cost is $1,243 per ounce. For the third quarter in a row, we delivered positive free cash flow.
This enabled us to repay $50 million of drawn bank debt in the quarter, which further strengthens our balance sheet and will reduce future financing costs. Our leverage ratio was below 0.4 times at period end. Free cash flow generation, balance sheet de-leveraging, and a return to paying dividends in due course remains an important focus for the company, as this allows us to both invest in high-value growth opportunities whilst also providing a return to shareholders. Because it's so important, I will touch on the delayed receipt of the Haile SEIS and the associated permits. We've been recently advised by the regulators that the SEIS is in the very final stage and is close to being published. I know I've been saying this for around two months now.
Well, ever since I've been told by the regulators that it was close to being published. However, all indications are, and our expectation is, that the SEIS will be issued imminently. David Londoño will talk about this later in the call. First, I'll just hand over to Scott McQueen to provide an overview of our financial results. Scott.
Thank you Gerard and hello everyone. Starting on slide five, which includes an overview of our financial results. As Gerard mentioned, and we previously flagged, the second quarter was not expected to be as strong as the first, due largely to changes in the grade profile at Haile. Nonetheless, it's pleasing to report that the second quarter results were in line with expectations, and as a group, reflect continued delivery to plan. As illustrated on the slide, our second quarter revenue came in at $229 million. EBITDA was just on $75 million, while our adjusted net profit after tax was $32.5 million. This equated to $0.05 per share, fully diluted, a slight beat when compared to analyst consensus of around $0.04 per share.
It's worth noting that the primary adjustment to earnings for the quarter was a $12 million unrealized non-cash FX translation loss on the revaluation of US dollar debt held by our New Zealand subsidiaries. While this is negative noise in the P&Ls during the quarter, the lower exchange rate does provide real benefits in terms of costs and cash flow through lower New Zealand dollar-denominated expenditure in US dollar terms. Operating cash flow for the quarter was just on $80 million. While this was lower than the first quarter, it is a significant improvement over the same period last year. Net operating cash flow before working capital movements was $0.13 per share fully diluted, which was in line with analyst consensus. The company generated a further $9 million of free cash flow in the second quarter, lifting first half free cash flow to a strong $72 million.
This could have been stronger, but weather during the final week of the quarter delayed our final 3,000-ounce doré shipment out of the Didipio. Our solid financial performance has translated to a strong balance sheet. As at 30 June, the company held immediately available liquidity of just over $230 million, including $150 million in cash and $80 million in undrawn credit facilities. This is after our $50 million discretionary debt repayment, which we made in June. Net debt, inclusive of equipment leases, as at the 30th of June, stood at $156 million, a 34% reduction relative to December 31, 2021. Moving to slide six, which provides an overview of our updated 2022 production and cost guidance.
Our delivery to plan across the first half has provided a foundation from which we were able to reaffirm our 2022 consolidated production guidance, as we continue to expect to produce between 445,000 and 495,000 ounces of gold over the full year. However, as Gerard mentioned, like many others in our sector, we have seen material inflation-related increases in key input costs across the business. The largest single driver being increased diesel costs, driven by high oil prices. However, we have also seen notable increases to varying degrees across our operations in the cost of energy, explosives, mechanical parts, consumables, and labor and services. While each operation continues to face some site-specific cost inflation challenges, many of which we can't directly control, our focus remains on what we can control, cost optimization through operational productivity and efficiency improvements.
We have a number of programs in progress to do this. As a result of these inflation impacts, combined with reduced copper and silver prices, impacting expected by-product revenue, the company is increasing full-year consolidated all-in sustaining cost guidance by $100 per ounce or around 7.5%. As illustrated, we now expect our full-year 2022 consolidated all-in sustaining costs to range between $1,375 and $1,475 per ounce. This is of course subject to achieving our production guidance and the ongoing direction of cost inputs, oil prices, and copper prices. Looking into each asset, at Haile, it's pleasing to report that we are increasing the full-year gold production guidance by around 15,000 ounces to 165,000-175,000 ounces.
This increase reflects the strong production across the first half of 2022, driven by consistent operations and a positive reconciliation on ore tonnes relative to plan. This higher production, combined with the sustaining capital reductions, has allowed us to maintain Haile's all-in sustaining cost guidance unchanged at $1,500-$1,600 per ounce, despite the inflationary cost pressures experienced at Haile to date. While it also represents no change in total cash spend, we have included a $20 million reclassification of waste mining costs, which were previously included and capitalized as part of sustaining capital, which we now expect to expense directly to mining cash costs. Production profile at Haile is expected to be marginally lower across the third quarter as mining continues in lower grade zones at the Haile Pit before grade and production increases in the fourth quarter.
Haile's all-in sustaining cost profile is expected to reflect the production profile. Moving to Didipio, where a strong ramp-up and steady progress at full capacity across the second quarter has also allowed us to increase full-year production guidance there by 10,000 ounces to 110,000 to 120,000 ounces of gold. Copper production guidance for 2022 is also increased 1,000 tonnes to 12,000 to 14,000 tonnes. However, the recent sharp decline in copper prices combined with cost inflation impacts, primarily grid power, has led to an increase of Didipio's all-in sustaining costs to $600-$700 per ounce, up from $500-$600 previously. Gold production is expected to taper off slightly in the third quarter based on the grade profile before returning to previous quarterly production rates in the fourth.
We are reaffirming Macraes' full-year production guidance at 145,000-155,000 ounces of gold as the operation makes steady progress against its plan. However, due to inflationary cost impacts there, we are increasing the site all-in sustaining cost to $1,450-$1,550 per ounce, up from the $1,300-$1,400 previously. Gold production is expected to be spread evenly throughout the remaining two quarters of the year at Macraes. We're revising guidance at Waihi due to the reconciliation and pro-productivity challenges experienced in the first half. We now anticipate 2022 full-year production at Waihi to be between 35,000 and 45,000 ounces of gold. Based on this lower production, all-in sustaining costs are now expected to range between $2,000 and $2,100 per ounce.
This is despite some cost reductions and deferral of sustaining capital the team has identified in response to the first half challenges. On a positive note, the production in the second half at Waihi is expected to be significantly stronger than the first half at a lower corresponding all-in sustaining cost than what's been reported to date. Moving to slide 7, which provides a visual summary of the changes to our all-in sustaining cost guidance for 2022. What we are showing on this slide is indicative terms from left to right are our estimates of the drivers of change from the midpoint of original all-in sustaining cost guidance per ounce to the midpoint of our updated all-in sustaining cost per ounce. As mentioned, diesel is the largest impact which affects our open pit operations most acutely.
Combined with energy costs, which have been most materially impactful at Didipio, where grid tariffs have increased given the coal and gas mix included. However, the inflationary impact has been broadly felt across a range of inputs, including but not limited to explosives, mechanical parts on mobile and fixed equipment, general consumables, labor and services. As represented by the middle green bar, costs have benefited from a significant decline in the New Zealand dollar exchange rate. Meaning, in US dollar terms, our New Zealand dollar denominated costs are reduced. As a significant copper and silver producer, we are also forecasting the recent metal price reductions to deliver lower revenue and therefore lower by-product credits across the second half. Finally, we have, ignoring reclassification of mining costs, some modest reductions in sustaining capital, mainly at Waihi.
While we can't control inflation impacts, we are focused on productivity and efficiency improvements and procurement excellence to mitigate the impact. Moving on to slide eight and our capital expenditure. In addition to revising our production and cost guidance, we are also revising our capital expenditure with several reductions expected across the full year. Starting with Haile, where we are reducing total capital expenditure by approximately $20 million to between $145 million and $165 million. This mainly reflects the previously mentioned reclassification of waste material included as capitalized mining, now moving into mining cash costs. At Waihi, we have reduced both sustaining and growth capital, which combined represent a $10 million reduction in guidance to between $50 million and $60 million. Both are deferrals as the team focus on operational delivery.
The largest change being deferral of a planned power upgrade not required at current or expected operating levels in 2022. A small reduction in growth capital is also included at Macraes, mainly the result of less than planned allocation of development costs at Golden Point underground to growth capital. Timing is important to touch on also, given the lower year-to-date expenditure relative to our full-year guidance. This reflects the second half weighting of our capital plans, especially at Haile and to a lesser extent, the Didipio, where it reflects the ramp-up of capital projects. At Haile, the weighting of CapEx to the second half reflects the timing of the SEIS and associated permits, where approximately $35-$40 million in sustaining capital and $30-$35 million in growth capital expected in the second half of the year, but is dependent on the timing of the SEIS.
I will now turn the call over to our Chief Operating Officer, Americas, David Londoño, to talk about the Haile operation.
Thank you Scott and hello everyone. The Haile operation has maintained a low injury frequency rate over the last 12 months and reported 1.7 recordable injuries per million hours at the end of the second quarter of 2022. I'm very proud of the team for continuing to place their health and safety above all else. Haile continues to deliver to plan, with mining at Ledbetter phase I completed the first quarter, after which mining transitioned to the lower grade Haile Pit in the second quarter. As a result, second quarter production was 37,958 ounces, a decrease of 37% compared to the first quarter. Year-over-year, this represents a 34% decrease, also due to lower mining grades period-over-period.
Second-quarter site-only sustaining cost was $1,432 per ounce, with cash cost of $905 per ounce. Quarter-on-quarter, the 32% increase in all-in sustaining costs reflects the lower grade mine, resulting in lower production on sales and taking into account the inflationary cost impacts that were previously mentioned. Tonnage mined was 21% lower quarter-on-quarter as a result of mining at Haile Pit, which is consistent with the mine plan. This was partially offset by positive reconciliation on ore tons from the Haile Pit, with ore found in areas of historical workings that were previously assumed to be voids in the resource model. Mill throughput continues to improve as a result of the operational improvements, such as increased ore fragmentation and mill utilization.
Total mill feed was 0.9 million tons, 3% higher than the prior quarter. It is important to note that these operational results were achieved in conjunction with a planned mill shutdown that took place in the quarter. This included some maintenance activities scheduled for completion in the fourth quarter of this year. Works completed in the second quarter included a full SAG mill reline, ball mill gearbox alignment, precautionary nondestructive testing of both mills, which found no issues, as well as crusher works. Progressive carbon-in-leach work, which has been ongoing over the past two years, was also completed during this shutdown. While these activities may result in increased maintenance costs in the second quarter, this will reduce fourth quarter planned maintenance, increase in availability, and utilization of the grinding circuits.
Average mill feed gold grade of 1.67 grams per ton was approximately 34% lower quarter-on-quarter, mainly due to material supplied from Haile Pit phase I being at a lower average grade, which is consistent with the mine plan. Mining unit cost increased 5% quarter-on-quarter, primarily as a result of higher consumable prices, including diesel and mechanical parts. Unplanned maintenance work on the mobile fleet also contributed to the variance. Reducing unplanned maintenance continues to be a primary focus of the Haile management team. Processing unit cost per ton milled increased 5% quarter-on-quarter due to higher costs related to reagents and mechanical and electrical parts. These inflationary impacts were partially offset by lower consumption of reagents, which was achieved through a more effective ore blending plan.
This plan was implemented to optimize throughput and counteract the rising cost of reagents that we have seen. We've been able to optimize blending through improved communication between processing, mine operations, and mine planning, using long and short-term planning to anticipate ore characteristics. This, along with blast fragmentation, is helping improve the mill's performance. Consistent mill performance and blend optimization has also led to optimal reagent use per ton milled. Additionally, by effectively using the advanced control system to determine reagent needs based on throughput and ore characteristics, we're able to reduce wastage and therefore better control the volume of reagents used. The technical team continuously conducts and constantly collects data to analyze and better predict how recovery can be maximized without wasting reagents. Now for an update on permitting at Haile.
During the second quarter, we received a National Pollutant Discharge Elimination System permit and the construction permit for the water treatment plant expansion. This allows us to increase water discharge rates to 3.5 million gallons per day, up from 1.75 million gallons. Expansion of the water treatment plant is well advanced, and we expect this to be fully commissioned by the first half of next year. The company views this as a substantial development which will allow the operation to better manage water levels, thereby reducing operational risk and improving operational efficiency. I will also reiterate that the publication of the final SEIS is imminent, as we have been advised that the document is in the final stages of formatting before it's ready to upload into the national register and go into production for publication.
The final SEIS, the Record of Decision, and all related permits are required to start the development of the Haile underground mine and to expand the operating footprint to allow for additional potentially acid generating waste containment facilities, overburden facilities, and expanded tailings storage facilities. During this past year, and while this permit has been progressing, we have been reviewing and implementing alternatives to reduce any potential impacts that the delay has caused. As an example, we're using more accurate interpolation techniques that help us reduce the volume of PAG material, extending the life of the current storage areas. We have also modified the design of the waste pad area to allow for equipment to continue excavations in the areas that are within the current permitted area. By reducing PAG block sizes, we have extended the life of the current PAG storage area to the third quarter of 2023.
The delay in receipt of the final SEIS, the Record of Decision, and subsequent permits does not affect 2022 production and has very limited impact on the 2023 mine plan. There is, however, potential for first underground ore production to slip beyond 2023. I will now turn the call over to Scott Sullivan to discuss the results from the Didipio and our New Zealand operations.
Thank you David and hello everyone. After an exceptional ramp up, the Didipio continued its excellent operational performance and operated at its full underground mining rates of 1.6 million tonnes per annum throughout the entire quarter while continuing to maintain a strong standard of safety. The site reported one reportable injury per million hours worked at the end of the quarter, and pleasingly had only a single case of COVID-19 in the quarter. The Didipio maintained steady production and produced 29,269 ounces of gold and 3,794 tonnes of copper during the quarter. The Didipio's second quarter AISC was $609 per ounce, while cash costs were $519 per ounce. The quarter-on-quarter increase mainly related to lower copper byproduct revenue and higher sustaining capital expenditure.
Despite the increase, this operation continues to generate strong margins. Total material mined in the second quarter was 397,000 tonnes, a 29% decrease compared to the prior quarter, as during the prior quarter, the operation mined 177,000 tonnes of material from the base of the open pit related to the crown pillar strengthening project. The second quarter did see an increase in underground tonnes mined as a result of achieving full mining results for a full quarter. Mill feed in the second quarter was 1.06 million tonnes, an increase of 22% quarter-on-quarter as the mill control expert system came back online in the second quarter after waiting on parts which arrived late in the first quarter.
Mill feed grade was 0.97 grams per tonne gold and 0.4% copper, slightly lower than in the first quarter as a result of less high-grade ore being blended during the period. Mill feed composition for the second quarter was approximately 34% from underground ore and 66% from low-grade surface ore stockpiles. In the second quarter, the company received the amended Environmental Compliance Certificate from the Department of Environment and Natural Resources. This raises the regulated throughput limit on the Didipio processing plant from 3.5-4.3 million tonnes per annum. The company expects to process approximately 3.9-4 million tonnes this year, and will also pursue several operating efficiencies in order to further increase plant throughput into the future.
It's also important to note that in accordance with the FTAA renewal terms signed in July 2021, Didipio Mine made the first delivery of gold doré to the Central Bank of the Philippines following the signing of the purchase agreement between OceanaGold Philippines and the government. In line with the terms of the FTAA renewal, OceanaGold Philippines shall offer for purchase no less than 25% of its annual gold doré production at fair market price and mutually agreed upon terms to the Central Bank of the Philippines. I'll just move on to slide 13. Macraes continues to work on instilling a stronger safety culture. During the quarter, reported the total injury frequency rate of 6.6 per million man hours, down from 7.8 in the first quarter.
Despite impacts from the workforce from COVID-19 related absenteeism, as previously mentioned on the call, Macraes delivered another steady quarter, producing 36,868 ounces of gold. Production decreased slightly quarter-on-quarter on the lower underground grade mined, resulting in lower mill feed grade, which was partially offset by higher recoveries. Cash costs were $942 per ounce, while AISC was $1,458 per ounce. With the primary driver for the quarter-on-quarter increase being inflationary cost impacts from diesel, explosives, and parts for mobile fleet maintenance. Total mining movements increased 3% quarter-on-quarter and were in line with the mine plan. Mining activities occurred in Deep Dell, Frasers West, Gaytan, and Innes Mills open pits, and at Frasers and Golden Point Underground.
Development rates at Golden Point Underground during the second quarter continued to be impacted by poor ground conditions encountered as development continued to cross the Golden Point Fault at several planned points. During the quarter, the mine plan was reassessed to reduce the planned number of fault crossings, which is expected to reduce the impact of poor ground conditions on development rates moving forward. In early July, first stope development ore at Golden Point Underground was mined. Mill feed increased slightly quarter-over-quarter, despite an increased percentage of hard Deep Dell ore being processed during the quarter. Mill feed grade was 0.96 grams per tonne gold in the second quarter, which was marginally lower than the first quarter due to average underground grade mined being lower.
Macraes has been in operation for more than 31 years, and studies are currently underway to support a resource consent application that would expand brownfields operations and extend the life of our mine beyond 2028. These studies are expected to be completed in the fourth quarter of this year, and we anticipate lodging the resource consent application in the first quarter of 2023. Moving to slide 14. On to Waihi. Waihi's total recordable injury frequency rate increased slightly from 3 - 4.5 per million hours worked. Given that our priority is to safely deliver production, site management, and our people are focused on bringing this injury rate down. While challenges still persist at Martha Underground, the operation did see improved mining rates and reconciliation as mining centered on areas better defined by grade control drilling.
In the second quarter, Waihi produced 8,201 ounces of gold, representing an increase of 21% quarter-over-quarter. This improvement was supported by the accelerated grade control drill program, increased development, and improved stoping performance. During the quarter, the first remnant stope was successfully mined, and it delivered slightly higher tonnes and grade than planned, although it took longer than scheduled to mine. Waihi is looking to optimize the remnant mining areas which represent approximately 30% of the resource post 2023, and we expect improved productivities moving forward. During the quarter, Waihi mined 204,500 tonnes of material, including 77,600 tonnes of ore.
Mill feed for the second quarter was 78,000 tonnes, 6% higher than the first quarter, and gold recoveries increased 2% quarter-over-quarter as a result of accessing higher grade areas of the mine and process improvements within the plant, including adjusting mill operating parameters to improve grind performance and throughput. This quarter's reconciliation of ore mined as reserved was 87% on tonnes, 82% on grade, and 71% on metal. While the initial Martha underground mining areas have been challenging from a reconciliation perspective, the grade control drilling data we now have has directed mining into areas of higher confidence. We expect mining rates will continue to increase over the coming quarters as capital development is reestablished and mining schedules rebalance.
However, there is a risk that annual production rates may not reach levels previously anticipated in the March 2021 feasibility study report. Longer term production targets will be clarified once the life of mine plan design and scheduling is completed later this year. We still anticipate that Waihi production in 2023 and beyond will be materially higher than 2022, and we are laser-focused on ensuring the redesign process results in positive free cash flow over the mine's operating life as we continue to advance the Waihi North project. Turning to this project, we have lodged a consent application with the Hauraki District and Waikato Regional Council. The councils are undertaking a completeness review of the application, which is to be followed by a phase of public consultation.
Once completed, the councils will determine the hearing process, formally considering the consent application. Alongside the consent application, the company continues to advance technical studies and exploration at Wharekirauponga to support the delivery of pre-feasibility study. As drilling to date strongly supports further growth of the resource, analysis is being undertaken to better understand mine design opportunities and the optimal target size for the mine's resource in support of the pre-feasibility study. I'll now turn the presentation back over to Gerard. Thank you, Gerard.
Thanks Scott. All in all a busy and solid quarter, and a big thank you to everyone at OceanaGold for their dedicated hard work to safely and responsibly deliver the outcomes we've shared with you this morning. I thought I'd take the opportunity on the call to cover off some recent announcements. We announced earlier this week a change in structure and additions to our technical bench strength at the executive team level. These changes include the addition of Peter Sharpe as Chief Operating Officer, Asia-Pacific. Peter is a very experienced mining executive with over 25 years of industry experience, having previously worked with Newcrest Mining, South32, and BHP. He's an excellent safety, people, and business leader and will be based in Brisbane when he commences with us in October 2022.
David Londoño previously Executive General Manager of the Haile Gold Mine in the U.S., has been promoted to be Chief Operating Officer, Americas. David has done a tremendous job at Haile so far, and this is a well-earned promotion as he continues his transformation of Haile. Scott Sullivan, previously our Chief Operating Officer, will take on the new Chief Technical and Projects Officer role in October and will lead group-wide technical functions and provide strategic direction on studies and execution of major projects across our business. There is an enormous amount of value here, and Scott's deep technical expertise, combined with his understanding of our business, makes him a clear choice of person for such a role. Craig Feebrey, our current EVP, Exploration and Development, will return to his previous role of Exploration EVP to focus fully on the company's mineral resources, exploration portfolio, and future exploration opportunities.
This is a critical area for any gold mining company, and I'm pleased to have someone of Craig's experience and capability in this role. Today I'm pleased to advise that Megan Saussey is joining us as Executive Vice President of Sustainability towards the end of this year. Megan is a highly experienced executive in this area and brings to the role particular expertise in social performance, human rights, climate change, environment, and considerable stakeholder engagement experience on large and complex projects. I'm delighted that she's joining the team, and I'm really pleased to get these critical leadership roles filled by highly experienced and committed leaders. I look forward to them making a strong positive impact, and to help accelerate the realization of the company's strategy.
Today you'll also likely have seen that we announced we've received in principle approval from the Australian Securities Exchange of our request to delist from the ASX. There are a number of drivers of this decision, mainly that the level of shares held and traded via the ASX has reduced to very low levels, and there is a cost and operational simplification benefit for us to consolidate our trading on the one larger and more liquid exchange, the TSX. Though the delisting occurs relatively promptly, we're taking great care to ensure that share entitlements listed on the ASX can transition to the TSX as seamlessly as possible, or have access to a share sale facility to allow a fully reflective share price to be obtained by anyone needing to sell their ASX shares at no cost.
Separately we also announced today that I expect to be relocating to Vancouver, Canada, in coming months, which in due course will become the corporate headquarters for the company. This change is driven by the fact that most of our equity analysts, most of our shareholders, most of our trading is done in North America. The time zone is also more favorable for coverage for all the sites in our portfolio. Finally, I'd like to close out the formal presentation by reiterating our focus on delivering value to shareholders. The strong first half results prove that our business sits on solid operational and financial foundations. However, we have plenty of opportunities for improvement, which is particularly important in the current context of increased input costs and lower, though still very attractive metal prices.
Our core focus remains working safely and responsibly, managing risks, and executing on business plans in an operationally disciplined way, optimizing production and lowering costs to maximize the generation of free cash flow. Investing capital and using our exploration capability wisely to deliver profitable growth and attractive returns to shareholders. I'll now turn the call back to the operator to take 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 touchtone phone. You will then hear a three-tone prompt acknowledging your request. If you would like to remove yourself from the question queue, please press star followed by two. If you're using a speakerphone, we do ask that you please lift the handset before pressing any keys. Please go ahead and slowly press star one now if you have any questions. Your first question will be from Ovais Habib at Scotiabank. Please go ahead.
Hi, Gerard and OceanaGold team. First of all please pass my congrats to Brian. Going forward, just a couple of questions from me. Just number one, Gerard, in regards to the SEIS and how you've, you know, consistently pointed out, towards the delay in receiving the permit, not impacting the 2022 guidance. At what point do you think this starts to impact 2023 guidance from where we are sitting at right now? And second part of the question is, if you do receive the permit in the next 30 days or so, how fast can you start the development work at Haile?
Yeah thanks Ovais. I'll have a go at answering the question. David, if you can supplement anything that I've missed. A reminder that the 2023 contribution from Haile underground is actually quite small. You know, if you look at the technical report that we put out, you know, you can see that there was a very small percentage of ore feed impact in 2023. If there is delay, the consequence of that is not a loss of feed in total, but a slight loss of a grade, because we know the underground feed is going to be higher grade than the open pit material.
There would be a small impact if there was further delay that caused that underground ore feed to slip one year. All that would happen, and from a value perspective is, you know, has minimal impact because it just means that more of the ore will feed into the later years. In summary, Ovais, a very small impact on 2023 numbers that we've put out to date. How fast can we go? Well, look, I can.
Having been there twice in recent months, I can tell you the team there are absolutely ready, and they've taken great care to make sure that the delay has meant that their time has been spent doing everything to enable a very clean run at developing the underground once they do get the nod. This is probably gonna be the best prepared underground mine commencement in history because we've had the benefit of readying everything in relation to it.
Taking the opportunity to optimize other associated projects that are going to give us some benefit such that when we do go underground, you know, again, the linear and critical path to getting the ore feed is going to be very narrow and much more in our control than it might have otherwise been. David, is there anything you wanna add to that answer?
I just add Ovais, pretty good Gerard. Thank you. One comment is on the feed in 2023 to replace underground ore, because the underground ore is harder. We will process less tons. Now, if we can process underground ore, we will process much more open pit ore, which will probably be similar ounces output for 2023.
Okay. Thanks both David and Gerard for that. Then just a you know question on you know what you've produced so far in first half versus going into the second half. Maybe you've covered it and I missed it. I apologize for that in advance. In terms of the second half, I mean, is there a significant kind of movement in terms of going from Q2 to Q3 and then Q3 to Q4 in terms of production and cost guidance?
If you're referring to the company as a whole, Ovais or Haile specifically?
No company as a whole on a consolidated basis.
Primarily due to grade we expect the third quarter to be as we said at the start of the year, to be not as strong as the first, probably in line with the second or thereabouts, and then finish strongly in the fourth. Now, from a cost perspective, as Scott McQueen mentioned, our capital expenditure works we expect to be higher in the second half. You know, you could expect that the sustaining capital element of that would have an impact on all-in sustaining costs. Inflationary impacts, you know, we've made an estimate, using, you know, market prices today and our best knowledge, and that's reflected in the guidance.
The third quarter from a unit cost perspective, you can imagine, you know, will be weaker than what we expect to get with much better volumes in the fourth and final quarter.
Perfect. That's it for me. Really good to see, you know, Haile, Didipio as well as Macraes looking stronger going into the second half and production guidances increases there.
Thanks Ovais.
Thank you. As a reminder ladies and gentlemen, if you would like to ask a question, please slowly press star followed by one on your touch-tone phone.
I've actually got a question from somebody who's on the webcast. The question is, does the relocation of the corporate HQ to Vancouver mean OceanaGold's M&A strategy will be geared towards North American assets?
Thanks Sabina and WebLink. Look not necessarily. I mean, I think it's fair to say that there are a number of opportunities that are in North America. Certainly to the extent that they present themselves as interesting to us, being located there would make such activity easier. That's not the primary reason. The primary reason, as we said, is to be close to our market, close to our equity analysts, closer to our shareholders. Just a reminder too, the head company of OceanaGold is actually Canadian. It's more of a coming home than anything else. Operator, are there any other questions?
Actually we do now have another phone question from Mike Parkin at National Bank.
Hi, guys. Thanks for taking my questions. Can you just go into, I think you called it the Crown Pillar Strengthening Project at Didipio. Can you just remind me exactly what's involved there and what's driving that?
Sure. Scott Sullivan that's for you.
Thank you. Yeah. The bottom of the open pit was in a fairly weak ground that given that we're mining underneath it to be able to extract you know safely underneath it to the levels that we wanted a plan that basically was to mine out layers of that from the bottom of the pit and replace it with a cemented fill which was actually stronger than the initial ground. We got two benefits out of that. One we created a I guess a artificially strengthened crown pillar for subsequent underground operations. We also got some extra ore out of the open pit which was slightly higher about the same gold grades and slightly higher copper grades than underground. We benefited from that displacing the open cut stockpile ore. Dual benefit there.
Is that, I recall you pulling additional tons out of the pit, like a couple, maybe it's like three years ago now. Is that the last time you extracted ore from the pit and now you're just finishing off the strengthening component of it?
Yes, this is the recent mining has been purely in this Crown Pillar Strengthening Project, nothing out of other, you know, residual cutbacks or anything in the open pit. That's fully completed.
Okay. All right. Thanks. That's it for me, guys.
Pleasure.
Thanks, Mike.
At this time, we have no other phone questions.
Okay. Well look that concludes our webcast and conference call. A replay will be available on our website later today. On behalf of the management team and everyone at OceanaGold, I appreciate you joining us and wish you a very pleasant rest of day. Bye for now.
Thank you sir. Ladies and gentlemen this does indeed conclude your conference call for today. Once again, thank you for attending, and at this time we ask that you please disconnect your lines.