Good morning and afternoon, ladies and gentlemen, and welcome to the OceanaGold 2019 full year financial results webcast and conference call. At this time, all audio lines are in a listen-only mode. Following the presentations, we will conduct a question and answer session. If at any time during the call you require immediate operator assistance, please press star zero on your keypad. Note that this call is being recorded Thursday, February 20th at 4:30 P.M. Eastern Time. I would like to turn the conference over to Sam Pazuki. Please go ahead, sir.
Thank you, operator. Good evening, good morning, and welcome to OceanaGold's fourth quarter and full year 2019 results webcast and conference call. I am Sam Pazuki, the Vice President of Investor Relations for OceanaGold. I am joined today by Mick Wilkes, President and CEO of OceanaGold, along with Michael Holmes, Chief Operating Officer, and Scott McQueen, Chief Financial Officer. For this webcast, we will initially discuss our 2019 operational and financial performance. We will then shift the focus of the presentation to the upcoming year before turning it to you for questions. Moving on to slide number two. 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. Please refer to the disclaimer on forward-looking statements in our presentation. I will now turn it over to Mick Wilkes.
Thank you, Sam, and hello everybody. It's a pleasure to be with you today from New Zealand. As I've noted before, 2019 was a challenging year for us. We did close the year on a positive note, with strong operational and financial performance from Haile and our New Zealand operations, which delivered an increase of nearly 20% in gold production quarter-on-quarter, while all-in sustaining costs decreased 13%. At Haile, production increased 26% from the third quarter while costs continued to trend lower. In fact, since the start of 2019, we've reduced our all-in sustaining costs by approximately 40% over the course of the year. Mining unit costs decreased from $5.55 per tonne mined in the fourth quarter of 2018 to just under $3 per tonne mined in the fourth quarter of 2019.
Processing unit costs were $14.81 per tonne milled in Q4 2018 and just over $12 per tonne milled in Q4 2019. We expect the unit cost to continue to trend lower in 2020. Macraes also delivered a strong quarter of production, which increased 20% quarter-on-quarter, while Waihi delivered steady production as expected. Fourth quarter adjusted earnings per share on a fully diluted basis was better than the previous quarter, in line with analyst consensus figures. Despite improved performance at the other sites, fourth-quarter earnings were impacted by the continued suspension of operations at DPI, with higher corporate, general and administrative costs, including approximately $10 million in carrying costs to maintain DPI in a state of operational readiness. Fourth quarter cash flow per share before working capital and on a fully diluted basis was $0.02 higher than the previous quarter, at $0.07.
In the fourth quarter, we continued to advance the Martha Underground development with approximately 830 m of development and completion of the ventilation shaft between the levels 800 and 900 drives. Development over the course of the year is expected to gradually increase. We are on track for first production in the second quarter of 2021. Exploration continues to yield positive results, particularly at Waihi, where we focus drilling at the Martha Underground and WKP projects. Just last week, we announced an updated resource for Martha Underground project, which included a significant increase to indicated resources, which now stand at 824,000 ounces of gold, while inferred resources sit at 614,000 ounces. The average grade for both categories at Martha have also increased from the previous resource. Moving on to slide four and our ESG update.
OceanaGold has operated a sustainable business for the past 30 years by applying robust ESG practices across our business. We are proud of our ability to discover ore bodies, build projects, operate mines, and rehabilitate depleted mines. This is clearly demonstrated by the work we've been doing at the Reefton mine on the west coast of the South Island of New Zealand. You can see from the photo on the left that the pit, which operated for about nine years, is transforming into a new freshwater lake surrounded by native forest. Since the mine closed in 2016, we have completed over 100 hectares of rehabilitation and planted more than 700,000 native seedlings, with another 300,000 seedlings to be planted over the next three years.
On the social front, we are grateful for the strong show of support for the company, for the DPI mine, and the renewal of the FTAA at a large public rally in Manila, as shown on the middle photograph. Approximately 1,200 members of host communities, including indigenous peoples, traveled 10 hours each way to rally for two hours in front of the presidential palace. OceanaGold is a top ESG performer as measured by the major ESG rating agencies. Although we are proud of our ESG performance and the programs we have, we can always do better. Driving for improvements in health and safety continue to be a critical component of our business, and our total reportable injury frequency rate improved in 2019. Moving on to slide five and discussion about DPI. The resumption of DPI operations is our top priority.
The FTA renewal process currently sits with the Office of the President after it was re-endorsed by the Department of Environment and Natural Resources and the Mines and Geosciences Bureau before Christmas. We've had good engagement with national and local stakeholders and support from different levels of government and the regulatory agencies. We have retained our workforce to continue in a state of operational readiness, so we can ramp up following a resolution. We've maintained this state of operational readiness since we were forced to suspend operations in October 2019. We cannot continue this state indefinitely. If operations are permitted to recommence, we believe we can achieve full rates of production of 10,000 ounces of gold plus 1,000 tons of copper per month within four to six weeks.
If operational permits are not received and we decide to proceed to full care and maintenance, significant workforce reductions would result, and we may be looking at a ramp-up to full production of up to 12 months. Moving on to slide six and the voice of our host communities. As I mentioned before, we are thankful for the overwhelming support from our host communities. Since July 2019, thousands of people have come together to organize rallies to support the renewal and the lifting of the barricade imposed by the provincial governor. Community groups have held dozens of meetings with government officials and submitted dozens of letters of support to the Office of the President. The communities want this mine, and they want OceanaGold work to continue. The DPI mine has changed the lives of tens of thousands of people for the better.
Families across the provinces of Nueva Vizcaya and Quirino have jobs, access to improved health services, better schools, better roads, access to markets, and a better quality of life because of the DPI mine. We are proud of the work that we have done at DPI and the partnerships we have built with communities. I'll now turn it over to Scott to discuss the financial results.
Thank you, Mick, hello, everyone. Over the next few slides, we'll cover some key aspects of our fourth quarter and full year 2019 financial performance. Moving on to slide eight. Revenue in the fourth quarter increased approximately 14% from the previous quarter due to higher gold sales from Macraes and Haile, which both demonstrated strong fourth quarter operational performance. Full-year revenue of $651 million was lower than the previous year due to the absence of sales from DPI in the second half of the year. This was partially offset by a higher average gold price received. EBITDA increased 33% quarter-on-quarter on our higher revenues, which was partially offset by higher corporate general and administrative costs. Note that the costs incurred to maintain DPI in its state of operational readiness were included as part of corporate G&A costs in the fourth quarter. These totaled approximately $10 million.
In addition to this, we had a $3.4 million non-cash write-off related to prior production taxes in the Philippines. These two factors combined to reduce earnings in the quarter by around $0.02 a share. Lower year-on-year EBITDA reflects the second-half suspension at DPI and the associated cost to maintain the asset in a state of operational readiness. Net profit for the quarter was $8.7 million, while adjusted net profit was a - $0.7 million, after adjusting for unrealized gains on hedges of $13.4 million and a write-off of approximately $4 million of exploration costs, which were associated with joint venture agreements terminated during the quarter. Net profit for the year was $14.5 million, and the adjusted net profits for the full year was $32.1 million. Moving to the cash flow summary on slide nine.
Operating cash flows increased quarter-on-quarter to $46.7 million or $0.07 per share, with a minimal change in net working capital. The increase in operating cash flow was a result of a higher gold sale in Haile, which was partially offset by the absence of sales from DPI and the associated carrying costs already noted. Investing and financing cash flows were similar quarter-on-quarter. For the full year, the increase in investing cash flow largely reflected higher exploration costs related to the growth projects in the Waihi district. Year-on-year decrease in financing cash flow relates mainly to the discretionary debt repayment we made in 2018. In slide 10, which includes some additional detail on our capital expenditure. Full year capital expenditure in 2019 was at the bottom end of the guidance range at $240 million.
Our investments in growth capital were mainly at Waihi with the start of development of Martha, and of course, the continuation of the Haile expansion. Our investment in exploration in the Waihi district continues to yield strong results, with resource growth just announced for Martha Underground last week. Moving on to slide 11 and a snapshot of our balance sheet. As at the end of 2019, our cash balance was $49 million, giving us immediately available liquidity of $99 million. Our net debt increased slightly to $179 million, primarily as a result of the increase of approximately $32 million in equipment leases, mainly at Haile, where the new fleet is being progressively added in support of the expansion and increased production rates. Our balance sheet continues to have relatively low financial leverage, with a net debt to EBITDA ratio of 0.84x.
With the support of our long-term bank group, as previously announced, we agreed amendments to our corporate debt facilities in November, whereby we eliminated the $50 million step-down and extended the maturity until the end of 2021. Before moving to the outlook for 2020, let's spend a minute just having a look at slide 12, which shows how we've managed our balance sheet over the past several years. Balance sheet's always been managed in a prudent manner by not carrying excess levels of debt. Leverage has been increased as required to support growth and then reduced when production made and free cash flow allows. Clearly demonstrated by the graphs where leverage increased through peak construction in DPI around 2012 and also Haile in 2017, both followed by periods of debt reduction. Most recently, you'll recall our discretionary debt repayment of $50 million in late 2018.
The continued suspension of operations at DPI is impacting cash flows. We are monitoring liquidity levels constantly and have options at our disposal to manage through the uncertainty and continue to support the growth projects in our business. The first step in that process was the amendments made to the debt facilities in late 2019. We will continue to focus on executing prudent options as required to support the continued delivery of key growth projects, including the expansion of the Haile Mine, the development of the underground at Martha, further drilling at WKP, and life of mine extension options at Macraes. Moving to the outlook on slide 14. As you know, we published our 2020 guidance a couple of weeks ago.
On a consolidated basis, excluding DPI at this stage, we expect to produce between 360,000 and 380,000 ounces of gold, which is similar to what we delivered in 2019 from those operations. All-in sustaining costs are expected to range between $1,075 and $1,125 per ounce sold. We're expected to produce approximately 25% more gold this year, offsetting the decrease in production at Waihi, where we will complete mining of Correnso ore body this quarter before production from Martha Underground in Q2 2021. Our capital investment program for 2020 includes an increase in pre-stripping and site mining infrastructure associated with the Haile expansion, where we are bringing forward two open pits originally planned for mining in 2021. Capital associated with the development of the Martha Underground project and the road realignment and movement of underground mine infrastructure at Macraes to allow for future production.
Year exploration spend is approximately half that of the previous year, as we have narrowed our focus to support the current mine plans, Martha Underground, and WKP. I'll now turn it over to Michael to discuss in more detail the outlook for each operation.
Thank you, Scott, and hello, everyone. Moving on to slide 15 and the overview of Haile for 2020. Haile ended 2019 on a high note with 26% higher production and lower costs relative to the third quarter. In fact, Haile improved every quarter through 2019 as productivity increased and unit costs decreased. We expect continued improvement this year through our larger mine program and utilization of the newly built and commissioned mining equipment. Haile is expected to produce between 180,000 and 190,000 ounces of gold, which represents an approximate 25% increase in gold production from 2019. The site, all-in sustaining costs are expected to decrease and range between $1,080 and $1,130 per ounce sold, while mining unit costs are expected to decrease as the year progresses.
Haile's production profile is second half weighted, with two-thirds of the year's gold output expected in the second half of the year, which is driven by the mining schedule. Higher recoveries are expected in the second half, consistent with higher grades and embedded process plant improvements. We expect production to increase every quarter of the year, while the all-in sustaining costs are expected to decrease each quarter. Haile's all-in sustaining costs will be significantly higher in the first half of the year, significantly lower in the second half to average out to our guidance range. Mining rates will increase significantly this year as we plan to mine between 50 and 55 million tonnes of material, including 3.5 to 4 million tonnes of ore. This compares to approximately 25 million tonnes of material mined in 2019.
The mining activities will be supported by the new 15 Komatsu 730E 200 ton haulage trucks, of which we currently have 12 in service and expect all 15 to be online by the end of the first quarter, which is ahead of schedule. In addition to these large trucks, we have upgraded the fleet with one Komatsu PC3000 excavator, two Komatsu PC4000 shovels, and four new Sandvik DR410i drill rigs to support the increased mining rates. The process plant continues to achieve higher throughput rates, and we expect to mill approximately 14% more ore this year than in 2019. We have recently completed the commissioning of the pre-aeration thickener, which is the last new component of the upgraded regrind circuit. Our focus for the processing plant now turns to improving recoveries while continually increasing throughput.
As I mentioned, with the enhancement of the open pit operations, we are revisiting the Horseshoe underground mine plan. This study work is underway and will include further analysis of the appropriate backfill to use, which will dictate the mining sequence. We will also select the mining fleet that will support underground operations and use technology similar to what we implemented at DPI. We expect to have more details on this work in the second half of the year. However, we will likely defer the start of the portal development to 2021. The growth capital for 2020 does not include the Horseshoe underground development. In the meantime, the permitting of the Horseshoe underground is progressing to plan, and we expect the notice of decision from the U.S. Army Corps of Engineers in the near term.
The growth capital investments at Haile are focused on the expansion of the mining operations, which includes a 3 m lift of the tailings storage facility, which represents half of the growth capital investment for 2020. In addition to the TSF, we are investing in the construction of a large Potentially Acid Generating or PAG cell, which is currently under construction and costs approximately $20 million. In addition to these investments, we are upgrading the water treatment plant, expanding our dewatering facilities, and relocating an overhead power line to allow for the mining of Mill Zone Phase 2, which was brought forward by six months from the original mine plan. Moving on to slide 16 on Haile physicals. It has been a challenging start as we ramp up Haile. However, we are feeling much better with how the operation is progressing.
We do still consider Haile to be a new mine with a long mine life. We have been ramping it up since it went into operations. Mining was challenged by the extreme weather events in quarter four 2018 that took us by surprise, and the recovery was much longer than expected. The U.S. economy has been very strong, which has led to a labor shortage and impacted our employee turnover, which we have now stabilized. We have upskilled the workforce by recruiting from hard rock mining states as well. While all this has been going on, we have been expanding our mining operations and the process plant, which is now operating with throughput rates that are 50% higher than the nameplate capacity. We have the right leadership and team in place to drive further improvements and advance the continued expansion of the operations.
As we mentioned, we expect continued improvement for the operation, particularly on the mining front, where productivity significantly improved over the course of year last year, and expect to further improve as this year progresses. Unit costs are also expected to decrease as well. Moving on to slide 17 on Macraes. Macraes continues to be the mine that keeps on giving with consistent positive performance and cash flows. There is plenty of opportunity to convert the large resource base to reserves and extend the mine life for a low capital investment. For 2020, Macraes is expected to produce a similar amount of gold to 2019 while costs are steady. We will mine a lot of material as we do normally at Macraes. However, we will do so with a lower strip ratio this year of approximately 7.5 to one.
The mining operations will be supported by another new 3600 Hitachi excavator, which is now in service. The Golden Point underground study is advancing well. We expect to complete it in the second half of the year. Our objective with Golden Point underground is to replace the Frasers underground. This, together with the additional open pit opportunities, form the basis for a potential mine life extension. I would like to point out that the resource at Golden Point underground is a new discovery following initial drilling of the Round Hill project. With drill results better than expected, we have decoupled the underground portion of the Golden Point from the Round Hill project. The Round Hill project remains as an option for us, however, this is an end of mine life opportunity.
In the meantime, we are advancing several open pits, including new stages of Coronation and Coronation North, Gay-tan Phase 1, Deepdell, and Innes Mills. We will also be updating the NI 43-101 for Macraes in 2020. Moving on to slide 18 on Waihi. We are transitioning from Correnso to the Martha underground. We will complete mining of the main veins from Correnso this quarter and produce approximately 11,000 to 12,000 ounces of gold. We will continue mining the narrow veins from the underground, which we will stockpile ahead of batch processing in the fourth quarter. In the fourth quarter, we will expect to produce an additional 7,000 to 8,000 ounces of gold.
The processing plant will be shut down after the first quarter, then restarted in the fourth quarter before we shut it down again ahead of processing from the Martha underground in the second quarter of 2021. The growth capital at Waihi for 2020 is predominantly for the development of the Martha underground. It also includes approximately $5 million-$7 million on project overheads with the remainder on underground development, while some of the capital is for some plant modifications during the downtime. The Waihi District Study, which is expected in the second quarter of this year, will outline additional details associated with the development of the Martha underground.
On to the next slide 19. The development of Martha underground will ramp up over the course of the year from approximately 1,300 m of development this quarter to a steady state development rate of between 2,600 and 2,900 m a quarter by the third quarter of this year. We have completed the ventilation shaft between the two drill drives and 830 m of development in the fourth quarter of last year. The image you see here on your screen is of what Martha is expected to look like in three years’ time. As I just mentioned, the Waihi District Study will have detailed information on the development of Martha underground, the capital and operating costs, as well as the ramp-up profile. Just last week, we announced the updated Martha underground resource. We reported an overall increase of 440,000 ounces of gold from the previous update in March 2019.
We increased indicated resources by 150% year-on-year to 824,000 ounces of gold, while grades increased in both categories. Back in 2017, we told the market that we had a new project called Martha, where through historical data and some drill holes, we believed there was mineralization that could underpin a seven-year mine life. Fast-forward to today, we have a growing resource, a permitted mine, construction is well underway, and we are working towards an initial targeted mine life of 10 years. Exploration drilling will continue in the Martha underground this year and for many years to come. Our focus for this drilling is mainly on resource definition drilling. We have an exploration target of approximately 6 million-8 million tonnes grading 4 grams-6 grams per tonne, which we will look to convert into resources over the coming years.
This exploration target is incremental to the resources we currently have on our books. Moving on to slide 20 and the Waihi District Study. Waihi is more than just the Martha underground, and the Waihi District Study is well underway. As we've said, the study should be completed in the second quarter of 2020. The main components of the study are the Martha underground and our game-changing discovery at WKP. Both are underground mines and high grade, particularly at WKP, where last March, we announced an initial resource of 234,000 ounces of gold in the indicated category and 401,000 ounces of gold in the inferred category.
The Waihi District Study will be a preliminary economic assessment, a PEA. Our intention is to highlight the future of the Waihi operation while providing high levels of detail on numerous parameters such as production rates, operating and capital costs, mine plans, and designs. The study will include resources beyond what we have just reported for the Martha underground and WKP. However, there will be a point in time to draw a line in the sand, and what we have for resources from the district will be used for the study economics. This point is particularly important when considering the potential of the WKP target. It's still a relatively new discovery, with only 25,000 m drilled since the end of 2017. We expect the resource at both the Martha underground and WKP to grow, especially at WKP, where we have only just begun.
There is a lot more drilling to do, and we expect exploration to continue well into the mine lives of both Martha and WKP. I will now turn it over to Mick to wrap up the formal presentation. Thank you.
Thanks, Mick, Michael and Scott. As you've been hearing, we have several opportunities we are focused on to achieve our objective of being one of the best gold mining companies in the industry. Our top priority is to resume operations at DPI. It is an important asset to our business, and we want to deliver on our commitments to our host communities. We will continue to work constructively with all stakeholders towards the renewal of the FTAA and reestablish the best operation in the Philippines. We have several exciting opportunities that are designed to deliver significant long-term value to shareholders. The Waihi district represents the largest value-creating opportunities we have in our portfolio. The market ascribes very little value to the Waihi operation, despite the successful resource expansion and project development that now underpins a 10-year mine life.
As the Waihi resource continues to grow, we see more value being ascribed to this asset in this tier 1 jurisdiction, especially at WKP, which is an exciting opportunity and one that we're advancing as quickly as we can. The Haile expansion continues to advance well, we are feeling good about the progress of the operation, which is shaping up to be a robust long life mine, again, in a Tier 1 jurisdiction. Golden Point is another exciting opportunity, which is currently being studied and could add further mine life to our Macraes operation. I'll now turn it over to Sam.
Thank you, Mick. That concludes the formal presentation segment of the webcast. We will now take some questions over the phone. You can also ask questions or pose questions in the webcast site on your computer screen. I will now turn it over to the moderator to facilitate the Q&A session.
Thank you, sir. Ladies and gentlemen, if you do have a question on the phone at this time, please press star followed by one on your touchtone phone. You will then hear a three-tone prompt acknowledging your request. Should you decide to withdraw your question, simply press star followed by two. We do ask that if you're using a speakerphone, to please lift the handset before pressing any keys. Your first question will be from Reg Spencer at Canaccord. Please go ahead.
Thank you. Good morning, guys. Just a question on DPI. Seems like the language around maintaining that state of operational readiness seems to have softened a little bit, such that it appears that you may be considering care and maintenance. At what point, given that you're spending $2 million a quarter at the minute Sorry, $10 million a quarter at the minute. At what point do you make that decision on care and maintenance?
Reg, thanks for the question. We are focused on the restart of operations at DPI, and the completion of the renewal remains our primary objective. We have made progress on the renewal in the quarter, which included continued positive engagement with regulators and ultimately the MGB and DENR, endorsing the renewal back to the OP, the Office of the President in December. We've also seen positive steps with regard to the local blockade, including the authorization by the Office of the President to allow fuel into the site, and the Department of the Interior and Local Government orders, which have been issued to the Nueva Vizcaya government regarding the removal of the checkpoint. We're encouraged by those things. However, time is marching on, and we are concerned about the costs that we're incurring to maintain the mine in a state of operational readiness, which we can't do forever.
We can't do that indefinitely. The impact on our workforce and the host communities is a key consideration in that decision. That's pretty much where we're at. We'll take into consideration all of those things. As you said in the presentation, if we do go on to care and maintenance, there is a significant period of ramp up to get back into operation. We're not taking these decisions lightly.
Thanks, Mick. Just the comment about getting some fuel into sites, you've obviously got approvals and permission to do that. Would that include or may that include the ability to truck out some of the concentrates you have there just to give a little bit of cash flow out of the asset? Has that been contemplated?
We've obviously requested for that from the government, and those requests are sitting with the DENR. We're continuing those discussions. The letter from the Office of the President authorizing the fuel to leave site was specifically related to the fuel.
Okay. Understood. Thanks very much. Thanks, guys.
Thank you. Next question.
Thanks, Reg.
Next question will be from Chris Thompson at PI Financial.
Hi, guys. Thanks for taking my question. Just a quick question on Haile here. Obviously, you've spoken about maybe pushing back the underground portal development. Just could you just remind us, what is the development and, I guess, first production timeline for the underground at Haile?
Yeah, thanks. Of course, it's Michael Holmes here. Yeah. The current plan is something that we're sort of working on at the moment, and there's numerous options that we've got. With the focus on the open pit and the moving forward of some of the work that we've got there, which has been facilitated by the new equipment and the equipment we have on site. We're looking at the different options. It's generally, depending on the options, and depending on the type of material we use to backfill, will dictate, I suppose, the mining methodology, which could either be a bottom-up approach or a top-down approach.
You're looking at a decline. The decline to the bottom of the ore body can take upwards of about 12 months, but you can certainly access the top of the ore body a lot sooner. That's the sort of range that we're looking at, and we haven't landed on exactly that. We'll be possibly deferring the decline start to 2021, but we still have that optionality of when that production can come out of the mine. That can either be from, as I said before, the bottom-up or the top-down approach.
Great. Thanks.
[crosstalk]
Yep. Just another quick question on Haile. Obviously, it's nice to see the site-wide all-in sustaining costs coming down. Do you think at one point we might see them below $1,000 an ounce when the underground comes in?
Yeah, look, the plan with the mining, it is backend-weighted this year. That's just the mining sequence sort of point of view. As we sort of ramp up with the equipment coming on board and improve the productivities, we will see that the all-in sustaining costs will be continually driven down. We're looking at achieving that target before then.
All right. Thanks. Just finally, just I guess going over to Macraes quite quick. Could you just remind us on the mine life, of the Frasers mine life? How much sort of runway have we got there before, I guess, pulling the trigger on Golden Point?
For the underground at the moment, for Frasers underground, it's 2021. That's sort of in the open pits, we're sort of reviewing that now with the current we have got. We're sort of working through the Golden Point study, and we'll sort of get a PFS out for that, this year, that will sort of roll into, as I mentioned, the NI 43-101 , which will look at extending the life. At the moment, we're sort of finalizing sort of the information that we've got from the drilling information that we've received, through last year and the beginning of this year. For the open pits, we're still sort of working through that process. Current mine life, I think, has been stated at 2021. We expect with our performance to sort of move that forward.
I guess I'll ask the same question. Is there potential for an interruption in production from the underground before you bring on Golden Point?
Golden Point Drilling has been quite successful. We're finishing off a resource on that in the near future. We'll have a PFS on that not too far away. That can feed into the broader life of mine plan. We have got some good results from our exploration at Macraes, which is pointing towards a longer life in the open pit as well. Those two coming together, I think you can expect that Macraes will continue in its current state for quite a few years. Now, how many years, we can't state categorically at this point, but we will be putting out that information over the course of the next six months. Watch this space. Macraes is a great operation that continues to deliver. It's got a huge resource, which has got a lot of exposure to the upside of the gold price.
Now we're looking at very, very high New Zealand dollar gold prices at the moment, which is creating a pretty bright future for our Macraes operation. Just in summary, over the next six months, we'll put out more information about our life of mine plans for Macraes.
Great, Mick, thanks. Really looking forward to that district-wide study. Thanks, guys.
Thanks, Chris.
Thank you. Ladies and gentlemen, as a reminder, if you do have a phone question, please press star followed by one on your touchtone phone. Your next question will be from Levi Spry at JP Morgan. Please go ahead.
Morning, guys. Another question for Michael, I guess, just at Martha underground. Can you talk us through more of the critical path items there, how we can monitor how you're tracking to meet second quarter next year, and what the risks are to that timeline?
Yeah, sure. Thanks, Levi. The Martha underground, we've got the ventilation shafts put in. We're in the process of completing the fourth dewatering hole. Current sort of levels, I believe, are around about the 700 level. We want to get the mine dewatered down another 100 m. The critical path is obviously the development, developing into the areas that we need to get into. The guidance, we're sort of starting off at the 1,300 m and up to the 2,600 m-2,900 m per quarter. That'll be our path, and that'll be tracked and guided as we go through.
Can we track that?
Yes.
I guess, yeah.
Yes, Levi. Yeah, sorry, Levi. With the Waihi study, that'll be coming out of a district-wide study in the Martha underground. There'll be more information coming out in the quarter two 2020, that should give you a clear understanding of the mine plan for capital and operating costs. From that position, it should give you good information to be able to track.
Yeah.
Yeah, Levi, if I could just add.
What else is coming out before then? Is there an update on WKP drilling, or is it really just wait till June?
Sorry. Levi, it's Mick here. If I could just go back to the Martha underground. We are operating with two jumbos now, and as more faces open up, we'll be increasing the number of jumbos. You will see that development rate increase through the course of the year. As Michael said, it starts off at 1,300 m a quarter now, then going up to, I think, around 2,500 m a quarter, towards the back end of the year. We'll give you clear transparency on that development rate. It really is driven by the number of faces and the new equipment that's coming in. On WKP, there is new resources to be put out in the near future, and then they'll be fed into the district plan, which is the first half of this year.
Yep. Okay. Thank you. Thanks. Thanks, team.
Thanks, Levi.
Thank you. Once again, ladies and gentlemen, if you have a question on the phone, please press star followed by one. At this time, we have no further questions, please proceed.
Operator, there is one question on the Q&A dashboard, and I will just read it out verbatim and make an opportunity to address it. The question here is: Has the confidence in getting a renewed FTAA for DPI become so low that selling the asset at a significant discount is an option already now? If so, what is the reason for this new low confidence? That's the question.
Okay. Sam, thanks for that question. As I said before, we are focused on the renewal of the FTAA as our primary objective. We have had some progress with the government in terms of seeing positive steps in regard to blockade, the authorization of the fuel coming to site, and the orders from the Department of the Interior and Local Government orders for the removal of checkpoint. The renewal itself is sitting with the Office of the President for action. It is taking longer than we expected, and we are staying in a state of operational readiness, but we can't maintain that forever. We don't want to impact on local communities and the workforce, which could lead, particularly the workforce, would lead to longer delays in ramp-up production. It is a significant decision if we did go into care and maintenance.
Based on that, considering all these related impacts on the broader business, across the business and our cash flow, and our desire to continue to grow through delivery of our key projects elsewhere in our portfolio, like WKP and Martha underground and Haile underground, we feel it is incumbent on us to consider all avenues to potentially realize value for shareholders. This logically should consider some form of divestment if that, on balance, was considered beneficial to our portfolio and longer-term strategic objectives that are value accretive. That's pretty much where we're at. It's just the balance of the needs of the broader business and the cash flow of the business and what happens in the Philippines.
All right. Thank you, Mick. There are no further questions on the Q&A dashboard either. That concludes our webcast and conference call. A replay will be available on our website later today. On behalf of Mick, Michael, Scott, and the rest of the team at OceanaGold, thank you for joining us. Bye for now.
Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we do ask that you please disconnect your lines. Enjoy the rest of your day.