Good morning and afternoon, ladies and gentlemen, and welcome to the OceanaGold 20 24th Quarter Results and Investor Day Webcast and Conference Call. At this time, all lines are in a listen only mode. But following the presentation, we will conduct a question and answer session. This call is being recorded on Thursday, February 18, at 5 pm Eastern Time. And I would like to turn the conference over to Sam Pizzuti.
Please go ahead.
Hey, Sylvie. Good evening, good morning, and welcome to OceanaGold's 2020 Results and Investor Day Webcast and Conference Call. I am Sam Fazucchi, Senior Vice President of Corporate Development for OceanaGold. I am joined today by members of the management team, including Michael Holmes, President and CEO Scott McQueen, Chief Financial Officer Sharon Flynn, EVP, Sustainability Jim Whitaker, Executive General Manager of the Haile Operations David Wei, Executive General Manager of New Zealand and Philippine Operations Craig Febre, EVP Exploration and Mark Kaslow, Chief Development Officer. Before we proceed, note that the references in this presentation adhere to International Financial Reporting Standards And all financial figures are denominated in U.
S. Dollars unless otherwise stated. Also 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 and the forward looking statements in our presentation.
I'll now turn it over to Michael Holmes, President and CEO of OceanaGold. Michael?
Thank you, Sam, and good evening, good morning to all. I hope everyone is staying healthy, and thanks for joining us today to review our 2020 results and outlook for the company. Turning to Slide 3, Delivering on our commitments is our mandate. This includes executing on our operating plans, making prudent investments and being a responsible gold We are excited about our future and our long term vision for shareholders. And this chart says it all, increasing gold production, Lowering costs and growing margins in excess free cash flows.
We expect to bring online 3 new underground mines and expand our existing open All in geopolitical stable jurisdictions. What's also very exciting about this chart Is that we have a significant upside potential as our game changing prospect near Waihi, Whara Kiiraponga Deposit, known as WKP, is just outside this 5 year plan, and we are looking at opportunities to bring it into this plan. Additionally, we have made good progress at Didipio and are committed to restarting operations once the FTAA renewal is finalized and thus bringing it into the plan. These two potentials are not included in this outlook. More on all of this later.
Turning to Slide 4 and before we jump into the outlook, we reflect on 2020, where we ended the year with a series of positive We achieved several of our key initiatives while navigating an operating environment complicated by the effects of a global pandemic to ensure we stayed on track to deliver on our commitments both in the near term and the long term. We delivered on our revised guidance with Haile, delivering an exceptional 4th quarter despite managing the ongoing external factors. Waihi Processing restarted at the end of the year, and we announced a couple of days ago, we achieved first Gold production at Martha Underground, which continues to ramp up nicely. Adding to an already robust 4th quarter, We hit key milestones for our growth projects throughout the year and successfully strengthened our balance sheet to ensure delivery of projects on optimal time lines irrespective of Didipio's status. Moving on to Slide 5.
The health and safety of our workforce is paramount, and we can continue to drive a strong safety culture Across our organization. Although our health and safety record is one of the best in the industry, we strive to do even better. The COVID-nineteen global pandemic impacted all of us personally and professionally, and I commend our team for their agility and commitment to safety to the extent that it was in our control. Our protocols kept our workers safe while on-site, And we will continue to have these stringent safeguards in place for the remainder of the year. I'll now turn it over to Scott, He will go through the 2020 results overview.
Thank you, Scott.
Thank you, Michael, and hello, everyone. As Michael said, the next few slides summarize our Q4 and full year 2020 financial results. Pleasingly, the Q4 was our strongest quarter of the year, delivering approximately 1 third of our full year production at the lowest cost. Higher gold sales from both Haile and Macraes combined with the resumption of production at Waihi Delivered $169,000,000 in revenues $61,000,000 of EBITDA in the 4th quarter, more than 4 times that recorded in the preceding quarter. For the full year, just over 310,000 ounces sold, combined with a higher average annual gold price, Generated just over $500,000,000 in revenue and $130,000,000 in EBITDA.
Didipio transitioned To a state of operational standby during the quarter, reducing holding costs materially. During 2020, we did incur $36,000,000 Including $9,000,000 in the 4th quarter to restructure the Didipio workforce and maintain the asset in the state Optimal state where we continue to progress the renewal of the FTAA. Net profit was recorded in the Q4 despite non cash headwinds, including unrealized currency translation losses and some charges reflecting enhancements to our final rehabilitation plans at Reefton. However, based on the results for the 1st 3 quarters, on the full year, we recorded a net loss of $150,000,000 which included the aforementioned Didipio holding costs, plus the $80,000,000 impairment charge previously recognized. Small negative operating cash flow reported in the 4th quarter largely reflects the reversing impact The 36,000 ounces physically delivered into the gold prepay arrangement during the quarter, along with an $18,000,000 tax payment in respect to our New Zealand operations.
That said, the full year operating cash flow of $199,000,000 was relatively unchanged year on year. Investing cash flows reflected the capital plans for the year, with a decrease year on year primarily due to lower capital spend at EBITDA plus the sales of non core equity investments and other surplus assets undertaken to enhance liquidity in 2020. Cash from financing reflects the $50,000,000 debt drawdown in the Q1 and the proceeds from the issuance of shares settled in the Q4, both net of finance lease activities. Turning to Slide 7 and our capital investments. Our 2020 capital investment program focused on progressing our organic growth pipeline.
4th quarter capital expenditures totaled $72,000,000 well over half of which was allocated to growth investments, Including $36,000,000 for Texas and Ag Infrastructure as part of the Haile Expansion and $16,000,000 at Waihi, where Martha Underground Development continued, totaling 2,300 meters during the quarter. For the full year, growth capital investment totaled 150,000,000 This was primarily divided between the aforementioned growth initiatives at Haile and Waihi. Exploration spend totaled $23,000,000 for the full year, The major focus being the Waihi District where 28,000 meters of infill and extensional drilling were completed during the year and continue to yield very strong results. Turning to Slide 8, which provides a snapshot of our balance sheet. As at December 31, our total available liquidity was $229,000,000 including $179,000,000 in cash, Our net debt stood at $134,000,000 As previously discussed, we've been actively managing our liquidity in response to the suspension of Operations at Didipio as well as the near term risks associated with the COVID-nineteen pandemic.
In 2020, this included executing the gold prepay arrangements To re profile and better align operating cash flow with our near term growth plan, the well supported equity raise And finally, in December, the refinanced of our revolving credit facility, which increased to $250,000,000 with the maturity extended from 2021 out until December 2024. After having taken these steps, we believe we can now move forward with confidence Commitment to deliver our promising value enhancing growth projects, while at the same time retaining their full value and optionality in the hands of the shareholders. The near term, we are prioritizing the reinvestment of cash flow into our high margin growth projects, which we believe represent highly attractive investment returns and will drive long term sustained value to shareholders. As we move through this period of investment And as the production margins increase, the forecast was just allocating free cash flow to shareholders and debt. I'll now turn the presentation over to Michael, who will provide additional detail on the company's short term and longer term outlook.
Thanks, Scott. And moving on to Slide 9. We're excited about our 5 year plan and beyond. We are working diligently to drive shareholder value by investing in what we believe to be one of the best organic growth opportunities in the industry. The acquisitions we made at the low point of the gold cycle have allowed us to focus internally to drive value.
As Scott just stated, our ability to drive long term value for shareholders is predicated on the prudent capital allocation And maintaining the optimal balance sheet structure to fund our organic growth. Turning to Slide 10. The drive for long term sustainable value for shareholders is underpinned by excellence in ESG performance and our responsible mining practices. Delivering on our commitments is a core value for OceanaGold. And for us, that means achieving our 2021 guidance as well as progressing organic growth on budget and on time.
In addition, restarting Didipio remains a key focus for our team. Through the 2020 festive holiday period, we had several meetings with the Philippine government agencies Upon the direction of the President to finalize terms related to the FDA renewal. The discussions were very productive, And we remain cautiously optimistic of re endorsement to the President for approval. Before we go into the details of our 2021 expectations, Sharon Flynn, our EVP of Sustainability, We'll take briefly take you through our top rated ESG performance and focus. Sharon has over 20 years of
Thanks, Michael, and hello, everyone. It's a pleasure to be here to discuss the subject that I've dedicated well compared to. Turning to Slide 11. We have operated a responsible business for the last 30 years by applying robust ESG practices across the company. And this year, we will continue to advance key initiatives to keep us at the forefront of best practice globally.
These key areas include climate change, Biodiversity, human rights and the responsible gold mining principles. We are progressing our approach to climate change with the development of work Plans and targets related to this very pressing global issue. This includes our commitment to publicly report on our climate change work in line with the task force on climate related financial disclosures, otherwise known as TCFD, by the end of 2022. This year, we are working to establish interim 2,030 targets with a focus on decarbonizing mine production, Clean Energy and Offsets, Energy Efficiency and Physical Risk Assessments to identify the impacts of climate change on our land's biodiversity assets and Infrastructure. Implementation of our biodiversity standards is a key focus for us.
In 2021, operations will establish biographies based ons and management approaches consistent with our corporate standards, which commits to no net loss in areas of natural habitat and net gain in areas with critical habitat. In line with our human rights policy and global best practice, we are assessing how we respect and protect Human Rights across our operations in the Philippines, New Zealand and the United States. These assessments will be finalized in Q1, and we will We received assurance on our first phase of compliance with the World's World Council's Responsible Gold Mining Principles. In 2021, we will continue to progress towards the goal of 100% compliance by the end of 2022. Our progress and the compliance will be externally assured at the corporate level and the asset level.
Our overall ESG performance has been recognized by the major ESG ratings agencies. And most recently, We maintained our A rating with the MSCI and an outperformer ranking by Sustainalytics, putting us among the elite Our focus is to ensure that we remain on the forefront of global best practice when it comes to sustainability performance and reporting. With that, I will turn it back over to Michael.
Thanks for that, Sharon. And moving to Slide 12, our organic growth. Over the next 3 years, we expect to deliver 3 new underground mines in attractive jurisdictions, all of which will leverage existing infrastructure. Concurrently, we look forward to expanding existing open pit operations at Haile and Macraes. 2 of the 3 new underground mines will come online this year in New Zealand Martha Underground, which we achieved first production in January ahead of schedule and Golden Point Underground, which will achieve 1st production in the Q4 of this year.
At Haile, we began preparing ourselves to commence portal development of the Haile underground in the second half of this year with first production expected in the Q4 of 2022. At WKP, although it is not contributing to the 5 year plan, we are looking at opportunities to bring it forward in a responsible way. WKP represents a very good opportunity to develop a new high grade, low cost underground gold mine that will leverage the existing process plant at Permitting and exploration is ongoing and setting the stage to realize the full potential of the Greater Waihi District well into the next decade. Turning to Slide 13. I will reiterate again how robust our organic growth While many of our peers are growing through M and A today, we are growing significantly through prudent investments in our opportunities that leverage existing infrastructure, personnel and our track record as a responsible mining company.
To that end, we are forecasting 75% higher production and 25% decreased costs over the next 5 years, representing not only a production growth, but a margin growth. We also expect our growth investment To decrease over the next several years as we bring the organic growth projects online, meaning we can then consider the allocation of capital to shareholder returns and deleveraging the balance sheet. Turning to Slide 14. More specifically on 2021, we expect 20% higher production at a lower all in sustaining cost from 2020, with strong production from Haile and Waihi. Our guidance has factored in risks that we continue to face across the company, specifically related to the ongoing global pandemic, which is still being actively managed, particularly at Haile.
We have laid on additional risks related to weather delays at Haile given the year we've just had last year and resulting in lower mining movements and reduced production. The good news for this year is that mining of the high grades at Haile is slated for the first half of the year. We have a healthy capital budget that will sustain production levels and allow for growth over the year over the near, medium and long term. Subject to any potential to accelerate the WKP project, We believe this year is our peak capital year, particularly for growth capital as we bring on our significant organic growth projects over the next few years. Exploration will continue to be one of our main drivers for growth, particularly in New Zealand, where we see multiple I will now turn the presentation over to Jim Whitaker, our Executive General Manager at Haile Operations to go through Haile.
Thank you very much, Jim.
Thank you, Michael. We have made significant improvements in mining and milling productivity at Haile this year as well as step changes in retaining and training personnel and project development. We continue to view Haile as Before we review the 2021 outlook, I would like to point out that our focus on health and safety has gone very well. Amidst the global COVID-nineteen pandemic last year, we cut our accident frequency by half and delivered a record year of safety performance. The health and well-being of our employees is a top priority for us, and we remain focused on maintaining a safe operating environment for our workers and contractors.
Looking ahead to 2021, we are focused on delivering on our commitments And our 2021 guidance was developed with that in mind. We expect to produce more gold year over year at Lower ASIC. We have provided you with more granularity on the operation to deliver these expectations, including our estimates of mining and milling rates, Grades and recoveries, which are appropriately conservative given the last two years of operations. Turning to Slide 16. What I can share with you is that 2020 was a challenging year.
It was an extraordinary year from a weather and health perspective, and sometimes the best laid plans don't work out as seamlessly as you would like. Site recorded rainfall that was one of the highest on record and 25% higher than the 35 year average. In addition, the global COVID-nineteen pandemic set in and at Ravage, South Carolina and Hales local community. Nearly all of our 500 plus workforce have had to spend 2 weeks in precautionary quarantine. This is in line with our COVID management policies to limit the spread of the virus in the workplace.
Out of those 500 plus precautionary quarantines, 63 positive cases of COVID have been diagnosed. Thankfully, all have recovered and notably our strict protocols in place have prevented the spread at site thus far. The weather and COVID-nineteen disruption in workforce resulted in haul truck utilization rates of 57% of available time in 2020, which was much lower than our expectations for the year. And we now have a mine plan whose success It is extremely sensitive to us achieving our mining advance rates. That said, we are focusing on what we can control And we have the right work streams in place to mitigate these risks moving forward and deliver on our current and long term expectations.
For example, when it comes to weather, our constant focus on haul roads, ramp design improvements, Hippie watering tactics and in bench sumps have dramatically improved our ability to work through inclement weather periods. This is reflected by the steady increase in mining rates despite the excessive rainfall and absenteeism. And through our workforce turnover rates have decreased significantly, we continue to actively recruit to mitigate this turnover and illness related absenteeism. COVID continues to be a challenge for us in 2021. As of early February, we have 24 new positive COVID cases among our workforce and we continue to manage this risk and to date given our strict health and cleaning protocols in place, We have prevented the spread of COVID at site.
Turning to Slide 17. Despite the impediments we faced in 2020, the team has kept the operation moving forward in all aspects of mine activity and project development. We achieved total mining movement of 38,000,000 tonnes in 2020, up over 50% from 2019 And concurrently reduced mining costs by 25%. The commissioning of the 19 new Komatsu 730 trucks Helped with this initiative and effectively increased hauling college capacity by 30%. With reduced impacts to operations from external factors, we would expect to move a lot more material, which provides upside for production and unit costs in 2021 and beyond.
We attribute ongoing improvements in mining productivity to haul road construction, Increasing truck loading, achieving constant availability and improving manageable utilization. As you'll see on Slide 18, process plant milling rates and associated costs have also improved significantly. The plant's performance have benefited from the planned expansion to increase milling throughputs and the installation of the ISO mill in mid-twenty 19. Full year 2020 mill feed achieved 3,500,000 tonnes from the 3,200,000 tons the year before. And at times, we were hitting annualized run rates of 3,900,000 to 4,000,000 tons.
Recoveries also improved materially over 2019, averaging 80% at significantly lower fee grades And milling costs decreased 9% year over year. Wet in circuit material proved to be a challenge for us, Particularly in the Q4, given the wet material from ore mining in the bottom of Snake Phase 2 and drove down our annual average milling rate. However, we do not view this as an issue that we can't manage or which we would have a material impact to operations. 2020 figures over prior year's results show significant improvements across the board. Total material mined increased, Ore mined increased, mill feed increased, recoveries generally improved and costs improved.
Turning now to Slide 19. Progress we've made from improving mining and milling helps us to deliver an optimized near term and life of mine plan. For 2021, Over 60% of production is expected to be delivered in the first half of the year as we complete ore mining in Snake Phase 2 And reach higher grade ore portions of Ledbetter Phase 1. We expect to continue development of Ledbetter Phase 2 and Hale Phase 1 and transition to ore mining in Mill Zone Phase 2 in the second half of the year. The optimized life of mine plan at Haile will require additional tailings storage capacity and PAG storage facilities to ensure we have matched site infrastructure with material balances.
We expect to invest $60,000,000 to $70,000,000 in these areas this year, while continuing to simultaneously advance the development of the Haile Underground. Over the life of mine, the capital investment will ensure Haile can achieve its full potential and more. We envision Haile as a +200,000 ounce producer at sub-nine hundred dollars ASIC. The near term capital investment supports this vision and generates attractive life of mine free cash flows, particularly through the expansion of the asset underground as you see on Slide 20. We finalized the optimization of the Haile Underground Feasibility Study last year, including pursuit of a bottom up mining approach Surface infrastructure contracts have been issued for construction and portal development to access the Horseshoe ore body in Q3.
First stope production is on track and expected by Q4 of 2022. We see an exciting underground future for Haile, supplementing the open pit operations, and it is our desire to increase the life of the underground project through the drill bit. Turning to Slide 21. The future of Haile is underground As we continue to explore and envisage matching the underground life of mine with the open pit life of mine, Transition to underground mining results in minimal additional surface disturbance, the ability to use waste to backfill, The decreased need for more peg waste dumps, improved operational flexibility and extends the life of mine. As you can see, Horseshoe Underground is one of several underground exploration targets at Haile, which was recognized as part of the original due diligence.
These targets stretch over 1 kilometer from Horseshoe in the East to Palomino in the Southwest. In 2016, we drilled off the upper portion of Horseshoe with some excellent results that we now have converted to a reserve of approximately 500,000 ounces, along with substantial inferred component still to be converted at deeper levels. Significant extensions to Horseshoe also remain to be tested, As highlighted on the figure on the left with approximately 64 meters at 15 grams per tonne of coal. Pala Mina was the next opportunity to be drilled with a substantial inferred resource of approximately 600,000 ounces being booked in early 2020. As part of this work, we also identified the Horseshoe Extension targets, Formally, Snakeshoes and Pisces targets with excellent drill intercepts, in addition to the large conceptual targets still to be tested, call it, Aquarius.
Each of these substantial opportunities will be advanced over the next several years. The company is in the final stage of the supplemental environmental impact statement process to expand the Hill operation. We are expecting the imminent release of the draft SEIS document from the Army Corps of Engineers We'll be quickly progressing a virtual 45 day comment period for the public. The SEIS We'll allow continued development of the existing Haile footprint, expansion of the TSF and PAG cells and development of the Haile underground. To date, there have been no objections by any stakeholder group to the SEIS.
And at this stage, the company anticipates receipt of a record decision after the comment period and completion of this process by mid year. It has been my pleasure to share the many exciting activities we have going on at Haile. And I'll now turn it over to David Wei, our Executive General Manager for New Zealand and the Philippines to review our Macraes and Waihi operations and the organic growth.
Thank you, Jim, and hello, everyone. I'll spend the next few slides reviewing our Mac Praise and Waihi operations in New Zealand, a jurisdiction that we intimately know and in which we have operated successfully in for over 3 decades. Beginning at Macraes, it's an asset that continues to be an attractive source of free cash in our portfolio, given the relatively low capital intensity and industry leading mining and processing unit costs. For 2021, we expect increased production with our guidance range between 155,000 At 165,000 gold ounces at an all in sustaining cost of approximately $1100 per ounce. Without any hedging at Macraes, we expect it to be a substantial source of free cash flow After investment to deliver the mine life extensions that we announced in 2020.
Turning to slide 24. In the second half of twenty twenty, we announced the mine life extension at Macraes, Including our expectation to produce over 1,000,000 ounces at all in sustaining costs of approximately $1,000 per ounce through 2028. The development of Golden Point Underground and additional open pit opportunities at Deepdale, Ennis Mills and Gaetan are the primary sources for the extension. As you can see, We have additional open pit sequenced over the next 5 years, including the Stage 1 Round Hill open pit, which is a smaller open pit at Round Hill for which we do not require to relocate the process plant. Moving on to slide number 25.
Golden Point underground development is well underway With first gold production expected in the Q4 of this year. Eventually, Golden Point underground will replace production from Frasier's Underground. Portal development commenced at the end of the Q4 of 2020 after receiving key permits. Receipt of these consents for both Golden Point and the open pit opportunities is a testament to our track record of environmental stewardship and social engagement in the region. Turning to slide 26.
Our focus today is on delivering the current life of mine ore sources through 2028, while continuing to evaluate other brownfield opportunities within the Macraes District. We are currently accelerating our exploration focus at Macraes to convert resources to reserves, better define our assets in development And deliver the enormous potential we see today. Turning to Waihi And the development of Martha Underground on Slide 27. We were pleased to announce first production after advancing nearly 7.5 kilometers of development in 2020. First gold production was achieved at the very end of 2020 And we will continue to ramp up mining to steady state mining rates as the year progresses.
We will continue to batch process in the Q1 ahead of the planned middle shutdown in March to install a new SAG middle shell, Which remains on schedule for completion in the late Q2 as originally planned. Once back on, we will have continuous production at Martha Underground. As previously forecast, we expect Waihi to produce between 35,000,45,000 ounces of gold in 2021. Ramp up of gold production will continue and we expect a steady state production rate of 90,000 to 100,000 gold ounces per year. Turning to slide 28.
Development of the Martha Underground continues to progress on budget and on schedule. And in our view, this is a producing asset with significant upside potential. Following our successful 2020 infill drill campaign, we converted inferred resources and increased Mark's indicated resource Our 36 percent to 1,000,000 ounces of gold grading 5.2 grams per ton. We also revised the operations exploration target to 5,000,000 to 7,000,000 tons with a grade of 4 to 5 Grands per tonne gold. To date, we have added ounces to the resource at an all in cost of $20 per ounce.
We expect to drill an additional 27,000 meters at Martha Underground with a focus on resource conversion and extension in 2021, as well as complete a feasibility study, including an initial mineral reserve by the end of the Q1 of this year. Turning to Slide 29. Located 10 kilometers to the north of Waihi, we continue to believe that WKP We'll grow into a multimillion ounce deposit and our recent drill results from the 2020 program highlight this. WKP is a major discovery with a resource of 1,100,000 ounces grading between 12 13 grams per tonne based on only 35,000 meters of drilling thus far. In 2020, the company completed approximately 4,000 meters of extensional and infill drilling of the East Graben vein to further delineate the resource.
The East Graben vein is only 1 of 3 currently identified major mineralized structures at WKP And drilling to date is identified in excess of 1,000 meters strike and the current vertical extent of at least 200 meters. The E Scrub and Vein System remains open in multiple directions. Our next mineral resource update for WKP is expected in mid-twenty 21. However, It's important to note that we believe that drilling at WKP will continue for several more years and beyond including throughout production. Thus far, we have added ounces at an all in cost of approximately $17 per ounce, similar to the team's performance to date at Martha.
And in 2021, we expect to use 2 rigs to complete a 10,500 meter Drilling campaign with a focus on infill drilling at the East Graven vein and extensional drilling for all 3 major mineralized structures at WKP. Moving on to slide 3. As shown on the slide, the resource consenting process is a critical path item to advancing our organic Growth projects at YYI. The resource consenting process is highly prescriptive, which is a good thing. More importantly, we have intimate knowledge of it and the regulator along with the stakeholders know Oceania Gold as a Successful responsible mining company that takes no shortcuts and is engaging with key stakeholders throughout the permitting process.
We kicked off the consenting process last year with the start of stakeholder engagement and feedback processes, along with finalizing scope elements and assessment of project impacts. These engagement and and assessment activities are expected to continue into the first half of twenty twenty one, leading to a formal consent application submission to the Hodaki District and Waikato Regional Councils by early 2022. This is followed by a 4 month open comment period when the regulators review and engage on all submitted concerns and ultimately The council submits its recommendation with a hearing and decision over the next 5 weeks. Once a decision is made, there is a 6 week appeal period when anyone who has been involved in the process can appeal the decision. From there, any appeals can involve engagement between the company and the appealing party.
If there is no resolution in this way, In the matter goes before the environment court of appeals for further hearings and the decision. This process could take up to 12 months. Our base case assumption is based on the permitting process proceeding to the Environment Board for the full duration of 12 months And puts first production from WKP at 2026. We're investigating opportunities where we can responsibly bring underground operations at WKP into our 5 year plan. Whenever WKP is in production, it will be a major contributor of free cash flows to the business and Socio Economic Benefits for New Zealand.
We have estimated over 300 jobs for the communities in the Coromandel along with a significant amount of in country investments. We are also looking at WKP being a state of the art operation, Potentially utilizing an all electric mining fleet. With that, I will now turn the presentation back over to Michael to discuss Didipio and our company's long term vision.
Thank you, David, and thanks for the overview on the Citing growth ahead of us in New Zealand. Moving on to Slide 31. Didipio and its potential restart Represents one of the most significant near term catalysts for the company. Didipio is a world class operation with a fantastic Filipino workforce And
one of
the most responsible mining operations on the planet. We believe Didipio has been and can continue However, the time line for renewal is uncertain despite several positive meetings held prior to the 2020 year end. We appreciate the patience that our shareholders have had with this process, and I share your frustrations, But our resolve remains strong to restart operations and included in the 5 year plan and beyond. Turning to Slide 32. With the permanent layoff of the majority of the workforce in the second half of twenty twenty, our expected time line for resumption to full operations has now extended up to 12 months, primarily driven by the considerable time and effort required to rehire and retrain our highly skilled Philippine workforce.
We remain in dialogue with the appropriate representatives at national and local levels on the renewal status. And currently, our understanding is that the FTAA renewal Remains with the Department of Finance for Signature before re endorsement to the Office of the President. In the meantime, We are maintaining Didipio in a state of operational standby, planning for the transition to full production when the renewal comes through. Once fully ramped up, Didipio will produce approximately 10,000 ounces of gold and 1,000 tons of copper per month at the 1st quarter all in sustaining costs. In summary, we're focused on what's to come.
We are confident of our organic growth delivering real value over the long term, and that is critical to creating shareholder value. Turning to Slide 34. The future of OceanaGold is in 2 attractive jurisdictions, New Zealand and the Americas. Progressing our most promising organic growth projects in these regions is expected to deliver significant growth, low cost production within the next 5 years. And this includes building 3 underground mines and expanding existing open pits, while continuing to explore the Greater Waihi District.
On Slide 35, Oceania Gold is a resilient and dynamic gold miner with a strong and sustainable future. And although our current valuation certainly does not reflect this, our organic growth pipeline is one of the best in the industry and represents decades of opportunity for our company. My team and I look forward to delivering that value. Thank you. And now back to Sam.
Thank you, Michael. So that concludes the formal presentation segment of this webcast. Will now turn it over to the moderator to facilitate the Q and A session. Over to you, Sylvie.
Thank And your first question will be from Levi Spry at JPMorgan. Please go ahead.
Good morning, Michael and thanks for The call and all of the detail, which I'm still to work my way through, but maybe just two questions on costs and then one on funding. So firstly, Haile. So just the longer term target of 200,000 ounces at $900 an ounce all in sustaining cost, When is that when does that come through? Can you just talk me through that a little bit?
Yes. Thanks, Levi. And there's a lot of information and trying to sort of give The runway of what we're doing with regards to the organic. We'll find that as we sort of move through this year With regards to sort of understanding the impacts and where we are, the idea was bringing the underground online is to get to that Sustainable 200,000 ounce production and as we bring the underground and the high grade as we open up the open pits. So we'll see that in the next couple of years and then we'll continue that process going forward.
Yes. So we're still sort of a bit
of difficulty in matching the 40three-1 101, slightly higher production rates out further. Yes. Okay. I'll work my way through that. Costs at Waihi, so in the PEA for WKP, I think you talked about $627,000,000 all in sustaining costs.
Can you just kind of put that in context? And again, how that profile might look over the next over the 5 years?
Yes. As we sort of ramp up the Martha Underground, so you'll see that this year's cost is predominantly based on Really only putting half well, less than half, about 400 around that 380,000 tons through the process plant, and if the process So as we ramp up the Martha Underground, you'll see those costs coming down. Then we'll start including the Gladstone open pit. So that will take the sort of the processing abilities Up to that 1.6 and then WKP comes in on top of that. So WKP will have the ramp up of the from 2026 first production That will be ramped up over a year, year and a half, before it gets into full production and those costs coming through.
Yes. Okay. Thank you. And just one on the funding for Scott. So there's an extra $50,000,000 available in the facility.
I assume you'll draw that pretty soon. Confirming, are there any CPs or anything related to that? And Just also confirming, does that mean there's nothing due until December 24? What are your requirements in the meantime?
Yes. Hi, Lito. Thanks for that. Look, yes, there's no CPs that's the revolving facility available for us to draw All going well. We shouldn't need to draw that anytime soon, but it's available there and that's the intent to have it available so we can Be flexible in our approach moving forward.
Okay. Thanks. And that's what is drawn is due December 24. There's nothing in between. Is that right?
That's right. Yes. Full repayment December 24.
All right. Thank you. Thanks. Thanks for taking my questions. Thank you.
Thank you. Your next question will be from Habib Alvais at Storozhe Bank. Please go ahead.
Hi, Michael and team. And thanks for taking my questions. And Thank you for providing all this detailed guidance. I've got several questions. I just might ask a couple and then pass it over To the rest of the people on the call, my first question just on Hill.
Obviously, you had a really strong quarter With the high grades coming in, is that you talked about that's expected to continue into the first half. Should we assume that that's going to continue as similar kind of Great into Q1 and Q2. Can you give us a little bit color on that?
Yes, certainly. Getting to the better grades did happen. What we'll find is that 60% of that grade will come out in the first half with the sort of I suppose higher than the Q1 is what we're sort of looking at as we sort of square up some of the phases that we've been working on at the end of last year.
And then just on that, should we then assume a first half weighted year in terms of consolidated production as well? Or does YE kind of replace some of the lower production in from Hale In the second half?
Yes, that's correct. So WAI sort of really ramps up in that second half of the period and replaces some of the Haile's production in the first half. Macraes is Pretty well steady going all the way through.
Got it. And then just sticking with Hale, This question might just be directed to Jim then. In terms of contingency, obviously, it looks like you've Added in some contingency for COVID and weather for 2021 guidance. Now can you give us any sort of color in terms of What kind of contingencies are placed for downtime or absenteeism or even equipment availability? You compare to what you saw in 2020?
Yes. Hi, Stuart. Thanks for that question. These are things that we've worked on a lot, learning a lot from the 2020 year and then taking it into where we want to Position guidance for 2021. There's 2 main issues there.
One is looking at what the fleet can do. Obviously, there's a lot of variables that The availability isn't really too much for concern through the fleet because it's new and also in the plant, it's fairly Constant, but it's actually the utilization of the equipment that we're focused on. That's affected, 1, by weather. It's also affected by where we are in the ore body. As Michael mentioned, going to an underground is going to give us an optional phase with a higher grade, But we will continue to dig through the upper parts of Haile into the 2023 year And then it will be really widened out.
We'll be able to really push the productivities of the open pit. And as Michael said, as well as having the underground as a feed. So a lot of the concern that we've had when we said guidance is around the total utilization of the property, what we see as material characteristics And also what we see as last year with respect to weather and then under the shadow of COVID affecting And pushing us to think of new ways that we can handle absenteeism through the operation.
And just, I mean, in terms of the downtime, I mean, Saw downtime approximately about 60 days last year. Is that kind of similar to what you're expecting in 2021?
Yes, that was a factor that we used through to the guidance, was the total downtime that we'd see on the site both in the mine and Possibly in the plant as well.
Okay, sounds good. Thanks, Jim. And just my last question before I pass it on. Just moving on to Didipio. Obviously, you've talked about having several meetings with the Philippines government officials in December.
Now is there any kind of part of the negotiation that's pending? What I'm basically asking is, Have the Office of the President come back with any additional demands or any other negotiations that are pending?
Thanks, O. A. It's an interesting question. The technical working group that was put together By the different departments on the instruction of the office, the President, the President, have worked with us over that festive period. Currently, what we're seeing more so is clarification and further information That's being sought by the government bodies, not necessarily changing to the negotiated terms.
So That's what we're currently seeing, and that's sort of the conversations that we're having backwards and forwards at this point in time.
Got it. Okay. Thanks a lot again guys and thanks for taking my questions and I'll jump back in the queue. Thanks,
And your next question will be from Mike Parker at National Bank. Please go ahead.
Hey, guys. Just one question.
With the water at Haile in terms of rainfall exceeding what the technical report was based on, do you see any need for additional discharge capacity for what's accumulating in the tailings So, there any need to kind of bring forward additional tailings lifts to accommodate for the capacity of the excess water that you Kind of experience year to date or not year to date, to date.
Yes. Look, thanks, Mike. Jim, do you want to ask this one?
Sorry, Michael. Sure. That's actually a great question. And it is in line with a couple of very important kind of triggering projects that we have currently ongoing That are part of the 42,101. With respect to the tailings, yes, it is the target of ours to reduce the water in the tailings and that actually Pushes off capital future list.
That is currently in the 42N01 and that is based around an in pond evaporation system We're currently designing and that will have running in Q3 of this year and that will effectively start to evaporate at a higher rate, the water and tailings. The other part of the question of the water that is in the mine and in the ponds and in the pit, that's also something with that we manage on a daily basis, But it also requires an expansion of the existing water treatment plant that is also currently in the capital plan for 2021.
All right. Thanks for that.
Any further questions, Mike?
No, that's it for me. Thanks very much.
Thank you. At this time, we have no other phone questions.
Thank you, operator. There's a couple of questions that have been forwarded to us from different means. So the first one here, which I'll read out, is related to the 5 year plan, basically states here that it looks like a very compelling 5 year plan With production going in the right direction and costs going down, what based on this here, what is what are other factors that could Improve this chart that you show in the repeatedly in the presentation.
Thanks, Sam, and thanks to whoever sent the question through. It is a compelling profile and it's something that we're working on and continuing to try and improve. The 2 catalysts that I mentioned that weren't in the plan is the Didipio restart, which will have a significant step change And the other one that we're working on as well is to try and bring the Waihi WKP project Forward. And so if we can work with the government in a responsible manner To look at fast tracking some portions of the plan and certainly get into the development That was shown in the development project plan. If you can bring that forward, then we can actually access the ore body Earlier and get that into the 5 year plan.
So they're the 2 catalysts that we're working diligently on and continue to work on. It does show a very good margin growing margin as we sort of progress through the year. And then certainly working with the underground and the open pit To improve the efficiencies and the productivities is the other part of the plan. Thank you.
Michael, next question here is related to WKP exploration. Much of the drilling to date has been focused on the East Graben vein. What are the plans to drill out the other veins? And more broadly, what are the plans for For the exploration program at WKP over the next several years?
Yes. Look, that's a very good question. And we have been focusing On building the reserve around WKP, which has been sort of the major focus that we have got. Craig, I'll hand that question over to you to probably add a bit more color to the exploration plan that we do have In that district, in that fantastic deposit. So with that, I don't think Craig's on the line at this point in time.
So with the Eastern Graben vein, there is the multiple veins off that to the footwall of the vein. And so we will Continue exploring those as we do it and then stepping out for the Tstream And the Western Grabenbahn. So our process is to ensure that from the platforms that we've currently got, We can actually improve the confidence within the resource to turn it to reserve and then do the step out drilling as we move forward. So I think this year, we've got around about 28,000 meters or 38,000 meters planned, and that will be a combination of both Rizzo Conversion Drilling and Expansional Drilling.
All right. Thank you, Michael. Next question here is just related to Didipio. Specifically, can you comment on any changes To the support that you guys have from the community from the communities around the Didipio, has it changed? Are they do they continue to be supportive?
And what efforts are they making to push for the FDA renewal?
Yes, again, thank you for that question. It is something that We're very cognizant of and we have been working very, very well with the media community. We as everybody knows, one of the focuses was on getting critical supplies to the mine to ensure the integrity of the mine. And that was And that has continued and continued with the assistance of the Baron by Catan and the Council. So We're now in a position where we have got a good supply of critical fuel at site.
And so the community is still very supportive And the community, they're heavily invested in getting the mine up and running. They've written numerous times to the office, The President showing their support and we have some great support from One of the provinces from both the governor and the congressman from one of the provinces that's supporting us as well. So happy and pleased to say that the support has been continuing with the good work and the good Relationships that we do have on the ground. So thanks very much.
Thanks, Michael. Last one that I have here on the list is related To hedging, does the company plan on pursuing additional hedging programs going forward?
At this point,
Moe, we've just come out of the hedging program for And we generally hedge at Macraes to lock in the margins. Currently, I think we're all sort of Looking at a higher gold price, albeit there's some volatility, but certainly a solid gold price in the future. But it's certainly something that we will continue to monitor, But we don't have any plans for continuing the hedging at this point in time.
Okay. So Michael, there's no questions on the queue. I haven't received any other questions. So that concludes our webcast and conference call. A replay will be made available on our website later today.
On behalf of Michael, Scott, Mark, Sharon, David, Craig and the rest of the team, thank you for joining us. Bye for now.
Thank you. Ladies and gentlemen, this does indeed conclude your call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.