Good morning and good afternoon, ladies and gentlemen, and welcome to the Oceania Global 2019 Second Quarter Results Webcast and Conference Call. At this time, all lines are in a listen only mode. Following the presentation, we will conduct a question and answer session. This call is being recorded on Thursday, July 25 at 5:30 pm Eastern Time. I would now like to turn the conference over to Mick Wilkes.
Please go ahead.
Thank you. Good morning, good evening, everybody, and welcome Q2 webcast. It's a pleasure to be here with you today and to discuss operational and financial performance for the last quarter. I'm joined today by Michael Holmes, Chief Operating Officer, who will discuss our performance of our operations and Scott McQueen, Chief Financial Officer, who will discuss our financial results. Moving on to slide number 2, just the cautionary statement.
Before we proceed, note 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. Slide 3, the results overview. I am pleased with our operational and financial performance in the second quarter as our operations delivered higher quarter on quarter production and stronger profits. On a consolidated basis, our operations have produced approximately 255,000 ounces of gold and 7,900 tonnes of copper in the first half of the year. In the second quarter, we produced over 129,000 ounces of gold and 4,000 tonnes of copper with higher production from Haile and Waihi, which was partially offset by lower production as expected from Macraes.
All in sustaining costs were CAD11.18 per ounce on sales of 100 and 5,600 ounces of gold and 3,600 tonnes of copper in the 2nd quarter. The higher quarter on quarter all in sustaining cost was mainly due to an increase in pre stripping investments as we initiated an accelerated pre stripping program at Haile to take advantage of the dry and better weather conditions. In the Q2, Haile delivered a significant operational improvement with production 45% higher quarter on quarter and unit cash costs down 39%. We mined 45% more material in the 2nd quarter and much of it related to the accelerated pre stripping program. On the personnel front, we continue to recruit very good talent for mining states such as Nevada, and we're very excited to have recruited a new Executive General Manager for Haile.
Our financial performance improved considerably from the last quarter with higher revenue and lower costs. This translated into an EBITDA of $71,000,000 and an adjusted net profit of over $22,000,000 As a result, our fully diluted adjusted earnings per share came in at $0.03 which beat analyst consensus of $0.02 per share. We generated strong cash flows resulting in a fully diluted cash flow per share before working capital of $0.11 which was ahead of analyst consensus of $0.10 per share. I'm very pleased to announce that we have commenced development of the Martha underground with the mining turnout for ramp access from the drill drive. We're also preparing for a raised bore hole to be installed between the 2 drill drives for ventilation purposes.
The drill drives will convert from mainly exploration to access for development in the coming months. Expansion at Haile continues to go well with processing rates currently achieving an annualized rate of 3,500,000 tonnes per annum, which is ahead of expectations. We continue to commission the regrinding circuit, which as indicated before, does take time to work out the right parameters and to achieve steady state mine sizes and recoveries. We also continue to drill at both the Martha project and at WKP and are advancing an all encompassing Waihi prefeasibility study, which we expect will be completed in early 2020. We're also very proud of our ESG performance, which continues to be recognized by reputable agencies such as the MSCI.
We have recently retained our A rating, placing us in the top 5 in the gold mining industry. Our safety performance is improving with reduced frequency of injuries led by Didipio, which is one of the safest gold operations on the planet. Let me now move to Slide number 4 and an update on Didipio. Our FTAA, the first one ever signed in the Philippines in 1994 had a 25 year period renewable under the same terms and conditions for an additional 25 years. As our news releases have stated, we started the FDA renewal process in March of 2018 and it has been endorsed by our regulatory agencies, the Department of Environment and Natural Resources and the Mines and Geosciences Bureau.
We are working with regulatory agencies and national government to finalize the renewal, but we don't yet have a timetable as to when the renewal process will be concluded. While the renewal process continues, the national government, which has authority over mining in the country, has permitted continued operations at Didipio. Unfortunately, some parties have seen this as an opportunity to challenge that directive by spreading misinformation and disrupting our operations at Didipio. As we stated in our previous news releases, the Governor of Navobiskaya issued an order directing local government units within his province to restrain any operations of the company. On July 1, the local government unit prevented a supply truck from accessing the mine site and we decided to hold all truck movements in and out of Didipio to prevent any escalation.
On July 3, we filed a petition in the Regional Court of Nevaviskaya seeking that the court firstly declare the Nevibiscaya order null and void and secondly prohibit and restrain the government of Nevibiscaya and other local government units from performing any act that prevents Didipio's continued operation. And thirdly, issue an injunction against the government of Neveluis Gaia and the local government units from interfering with the Didipio operations. A hearing for the injunction took place on July 12. And yesterday afternoon, in Philippine time, a decision was rendered, denying our petition. We intend to appeal this decision to the Philippines Court of Appeals in Manila.
In the meantime, underground mining operations have been suspended due to the depletion of consumable mining supplies. Processing of ore stockpiles is continuing along with other critical activities to ensure the safety of employees and the operation. As I mentioned, the operation falls under the authority of the national government and the national government has committed continued operations. We will continue to work in partnership with the national government and regulatory authorities in accordance with the law and we will always comply with our responsibilities under our contract with the Republic of the Philippines. We remain committed to pursuing good genuine and effective engagement with all of our stakeholders.
Didipio is a world class operation that has strong social license to operate. We have had the support of the community during this renewal period and uncertainty. Let me move to Slide 5 and just emphasize some of the achievements of Didipio. Didipio is a template for responsible mining globally and in the Philippines. What we have achieved with our strong, proud Filipino workforce is remarkable and the operation has delivered significant socioeconomic benefits to the host communities, the provinces of Nevaviskaya and Carino and more broadly in the Philippines.
The Didipio operation is one of the safest operations in the world with the leading TRIFR rating of 0.5 per 1000000 hours worked. We have direct employment of over 1500 workers, comprising 97% Philippine Nationals, 59% of whom are from the local communities and including over 300 women, many of whom are in leadership roles. Indirectly, we estimate employment for nearly 4,000 Filipinos from the provinces Nevabus, Isle and Carino. Didipio is a world class operation run by Filipinos. Oceana Gold has made significant economic contributions in the Philippines We have constructed many hundreds of kilometers of access roads connecting Didipio to new markets.
We have built hospitals and schools. We have focused on building capacity through training, education and other forms of tuition assistance. We established an underground mining simulator at the Clark Training Center, which has allowed Filipinos from our local communities who have had no prior experience to gain hands on training and certification to work underground at the operations at Didipio. We helped Didipio community establish DECORP, which is one of the largest taxpayers in Nusa Visaya and employs over 300 people. The Philippines seeks a responsible mining industry and we support this initiative completely.
Didipio's environmental performance is exceptional. We are operating to the highest of environmental standards being the first mining operation to be ISO 14,001, OHSAS 18,001 and more recently, ISO 5,001 certified. We have planted over 1,000,000 trees in the last 5 years. We also have several programs designed to promote water management in an area prone to illegal small cell operations that use harmful substances and contaminate local rivers. We are very proud of Didipio's performance and its contributions to society.
On that, I'll pass over to Michael to discuss the performance of our operations. Thanks, Michael.
Thank you, Mick. Moving on to Slide 6, and hello, everybody. I must add that in my experience, which includes several years in Argentina, the Didipio mine is one of the best performing operations that I've had the fortunate opportunity to be a part of. I am proud that Didipio is an OceanaGold operation and the courageous, hardworking and proud Filipino workforce are a part of the OceanaGold family. They are some of the most talented and dedicated people I have ever worked with.
Moving on to Slide 7 with health and safety, One of the reasons why Didipio is such a special operation, which Mick has already highlighted, is its outstanding safety performance. Overall, the company continues to focus on enhancing our safety cultures at Haile and the New Zealand operations like the one we have at Didipio. Our persistence is yielding positive results. We are trending lower in terms of injury frequency and over the last 12 months, we are running at a total injury frequency rate of 3.8000000 man per 1,000,000 hours worked. This compares to 4.5 that was achieved at the end of 2018.
Moving on to Slide 8 and the operational performance at Haile. As Mick mentioned, we had significant improvement in the operational performance in the 2nd quarter and this trend has continued into the Q3. Haile produced over 37,000 ounces of gold, which is 45% higher than the previous quarter. Unit cash cost was $7.10 per ounce in the 2nd quarter, which compares to over $1100 per ounce in the 1st quarter, a 39% improvement. Mining costs were 30% lower quarter on quarter on better mine productivity.
We achieved this even despite operating our original fleet of Caterpillar 777 haul trucks. In the Q2, we only had one of our large Komatsu trucks in operation. In the second quarter, our own company mining costs were at $2.50 per ton mined, and these costs are trending in the right direction. With the rollout of the new fleet over the course of the next 12 months, we expect to push our mining unit costs even lower. And by the end of this year, we expect to have 11730e Komatsu trucks at Haile operating at Haile.
As Mick mentioned, with the improved and dry weather conditions, we took the opportunity to blitz the mining area by accelerating the amount of pre stripping. Our mine plan for this year saw Red Hill, which is our 3rd pit in the mining sequence, was to commence ore mining in September, October. However, under the accelerated pre stripping program, we are mining ore today. In quarter 2, we completed the pre stripping of Red Hill, which accounts for over 70% of the pre stripping for this year. In H2, we will commence stripping in Leadbetter Phase 1.
Despite the significant pre stripping in quarter 2, we decreased our all in sustaining cost by 23% on the previous quarter, reflecting the much improved mine productivity. And in fact, of the $13.79 per ounce all in sustaining cost in the 2nd quarter, dollars 4.50 per ounce of that was related to pre stripping activities. As we mine down to the lower benches of the Snake Pit, we have had positive reconciliation on both grades and tons. This is not too dissimilar to our experience with the Mill Zone pit, where reconciliation was negative at the top of the ore body and positive in the lower benches. In terms of processing, we achieved a consistent annualized rate of 3,500,000 tons, and we are now focusing on pushing the plant to achieve even higher rates.
Early in the second quarter, we shut the plant for planned maintenance, but also to tie in the ISO mill, which we've been commissioning for much of the quarter. The ISO mill can take some time to work out the kinetics. And the good news is that once the optimal parameters have been worked out, it runs without further input. It also requires lower maintenance than the previous SMD Verdi Mills. And as such, we expect to reduce our operating cost by $30 to $40 per ounce from savings in maintenance costs.
With the plant shutdown in April and increased use in some consumables such as carbon, our processing unit cost increased quarter on quarter. Having said that, our processing unit cost for the month of May and June were around $12 per ton milled. And this is and this trend of lower unit costs has continued into this quarter. On the personnel front, we continue to hire talented workers at different levels of the operation. And in July, Jim Whitaker has joined Oceano Gold in the capacity of Executive General Manager for the Haile operation.
Jim is a highly experienced mining executive having spent the last 5 years with Barrick Gold as one of its partners and Executive General Managers of the Veladero operation in Argentina. Prior to this, Jim was a management consultant to the mining industry having provided strategic support and consulting to the likes of BHP Bilton, Antifagasta and Barrick. And then prior to that, Jim was with Place du Dome. We are very excited to have someone with this caliber working for us and taking Haile to the next level. Moving on to Slide 9, just to get a bit more granular with the Haile physicals.
You can see there the specific details on how the operation performed quarter on quarter. Hal demonstrated significant improvements on many fronts. Production was higher, cash costs were lower, total material mine was up, and you can see the mine grades were also increased quarter on quarter. The Howe mine plan for 2019 was always back end weighted and we continue to expect stronger production and lower costs in the second half of the year. Moving on to Slide 10 and Didipio in the Philippines.
Operationally, Didipio delivered a strong quarter again with steady production. Underground mining continued to ramp up well with an 18% increase in underground ore mined. And as Mick mentioned, the underground is comprised entirely the Philippine workforce, most of whom come from the local villages and have had no prior underground mining experience. This has been a major success of the Didipio project. We have further optimized the mine plan for the underground and we will be using a top down long hole stoping mining method, which defers additional development of Panel 2 where we were originally developing it to the bottom of the current known resource.
This also diverts development capital to a later years. Additionally, we commenced the development of a new Crown Pillar stabilization project, which is in progress and expected to be completed this quarter. We've mined approximately 350,000 tonnes of material with a head grade of 1.7 gram per tonne. The area mined will be backfilled with cement, enhancing the stability in the crown pillar as we mine beneath it. Innovation is a key aspect of the Didipio operation and the Philippine workforce has strongly embraced technology.
We are progressing with our adapt Automation, Digital and Process Transformation program. This initiative includes digital initiatives such as asset tracking and short interval control and automated control of equipment with the ability to work from surface and during crib blasting and shift change, which is improving our productivity rates and reducing our unit costs as noted. As Mick has already indicated, we have temporarily suspended operations of the underground due to the depletion of consumable mining supplies, while other underground activities including pumping continue for safety and environmental reason. Processing of ore from stockpiles in the plant continues. Didipio's second half outlook was broadly consistent with the first half.
However, this is now dependent on either the completion of the FDA renewal process and or the favorable outcome of the appeal process with the Philippine Court of Appeals. Moving on to Waihi in Slide 11. Waihi had a strong quarter of operational performance with production higher quarter on quarter on the back of increased mill fee, which was 29% higher than the previous quarter. The average head grade was slightly higher due in part to the mining sequence and accessing additional areas in the underground. The operational team continues to focus on mining the current phases, while our project team focuses on developing the Martha Underground.
Exploration drilling is ongoing from both underground drill drives and from the surface. This exploration program is designed for both resource conversion and extensions. The drill results continue to be significant and our confidence in delivering resource increases is strong. At our WKP prospect located approximately 10 kilometers to the north of Waihi, we continue exploration drilling from 2 drill rigs. In the Q2, we applied for a mining permit, which gives us security of tenure over the area.
And finally, the pre feasibility study for all of Waihi continues to progress well, we expect it to be completed early next year. This study will include the Martha Underground, WEKP and other projects we've contemplated. It's important to note the study is based on resources that are at least in the indicated category. As such, the study will only capture the small indicated resource at WKP, but we do believe that WKP will be much larger than the initial resource we published earlier this year. Production at Waihi in the 3rd quarter is expected to be lower than in the second quarter.
However, the second half of the year is similar to the first half. Turning over to Slide 12 in Macraes. As expected, production at Macraes decreased quarter on quarter as we sourced ore from lower grade zones of the Coronation North and processed a high portion of low grade stockpiles. In the quarter, we mined 18% more material than previous quarter as we progressed the cutback of Coronation Stage 5. Correspondingly, ore mined in the 2nd quarter decreased due to the focus on pre stripping activities.
The pre stripping in the 2nd quarter and into the 3rd quarter is ahead of mining of additional ore and at higher grades in the 4th quarter. Also in the quarter, we completed the installation of a long term culvert, replacing the temporary culvert, which was installed following the road washout last November. This work temporarily interrupted all haulage and therefore mining of waste was prioritized during this period. This coal which secures the long term access to the northern ore bodies, which includes the access to the Deep Del North deposit, a new open pit, which is planned for mining next year pending approvals. Deepdale North is one of the growing opportunities we have at Macraes, another is Golden Point, which we continue to drill and achieve favorable results, which are fed into the underground study currently underway.
I'd also like to point out Macraes unit mining costs of $1.09 per tonne mine, which we believe is one of the most efficient mining operations in the world. Proceeds and unit costs of $7.03 per tonne milled reflects the efficiency of our plant operations in the metallurgist. Looking ahead to the rest of the year at Macraes, we expect the 3rd quarter to look similar to the 2nd quarter. We expect to have higher production in the 4th quarter on better grades and lower costs due to less stripping. I will now turn the presentation over to Scott McQueen, who will discuss our financial performance.
Thank you.
Thank you, Michael, and hello, everyone. Over the next few slides, we'll cover some key aspects of our 2nd quarter financial performance, some of which Mick has already touched on in the overview. Turning to slide 14, here we see a summary of our financial results. The higher quarter on quarter revenue reflects not only just the higher average gold price achieved, but also a strong underlying operational performance in the 2nd quarter, which included higher production and sales at a lower cost of sales. EBITDA for the 2nd quarter was approximately 11% higher than in the Q1, reflecting the higher revenue generated combined with lower cost of goods sold, which drove improved EBITDA margins.
The biggest underlying driver being the improved operational performance at Haile. As previously mentioned, we saw a 45% quarter on quarter increase in production. Adjusted net profit for the 2nd quarter was $22,100,000 equating to earnings per share of $0.03 fully diluted, which as previously mentioned exceeded analyst consensus of $0.02 per share for the quarter. On the back of a stronger operational performance, operating cash flows also improved significantly quarter on quarter. The main driver is being the higher EBITDA already noted, combined with the positive working capital movement across the quarter.
2nd quarter investing cash flows included material pre stripping costs at both Haile and Macraes. I'll cover more on the capital expenditure, including pre strip in a bit more detail on the next slide. The $7,000,000 quarter on quarter increase in financing cash flows you can see reflects the payment of the dividend in April. With $150,000,000 drawn in our corporate revolver, no further debt repayments are scheduled until the end of 2020. Moving on to Slide 15, includes additional detail on our capital expenditure.
As outlined in the table, total capital expenditure increased around 50% quarter on quarter to $82,000,000 reflecting increased investment in our organic growth projects combined with an 80% increase in pre stripping in Q2. Growth capital mainly related to the Haile expansion and also the Didipio underground development. Haile this quarter spend included the completion of the build out and tie in of the upgraded grinding circuit, land acquisition and other site infrastructure works, including additional water retention ponds, waste storage cells required as part of the expansion plan. As Mick and Michael both mentioned, and as the capital costs show, we increased our pre stripping activities at Haile in the quarter to take advantage of drier weather conditions. We also had material pre stripping in Macraes, which included the planned stripping at Coronation Stage 5.
And as Michael noted, the timing impact of additional waste movement mined in lieu of ore while the permanent repair of the whole road coal that was completed in June. Naturally, we continue to spend strongly on exploration, especially at and around Waihi, given the positive progress of both the Martha and the WKP drilling programs. Looking forward, we expect pre strip to reduce material in H2 and broadly are happy to report our organic growth projects remain on track. Moving on to slide 16, which includes a snapshot of our balance sheet. As at the end of the first half, our cash balance stood at $85,000,000 and total liquidity at $135,000,000 Our net debt was $108,000,000 reflecting a low net debt to EBITDA ratio of 0.4.
Our net debt position increased slightly quarter on quarter due to the progressive addition of the new mining fleet at Haile, consistent with our expansion plans. We do expect lease liabilities to continue to increase over the course of the next 12 months as the new equipment continues to progressively arrive on-site, as Michael outlined. Late in the quarter, we took the opportunity to hedge about 2 thirds of Macraes anticipated 2020 production, utilizing another 0 cost collar at what were 5 plus year highs in the New Zealand dollar gold price. Since then, we've seen some further strengthening. As a result, the quarter includes some unrealized losses on the mark to market of those hedge contracts.
However, hedging strategy for Macraes remains a financial de risking tool to protect the downside risk and ensure strong returns at Macraes even in a lower gold price environment. Moving on to Slide 17. As previously noted, our EBITDA margins improved quarter on quarter, in particular due to the progressive operational improvements at Haile. As the year progresses, we are targeting further improvements. Nevertheless, H1 was still a strong result.
Return on capital investment. Invested capital also remains a key metric for our business. And as you can see, we've delivered a positive return on invested capital continuously since 2011. Similar to our EBITDA margins, we are targeting further underlying performance improvements in H2, which should, gold price aside, help deliver an improved return on invested capital performance also. Thank you, and I'll hand back over to Mitch to wrap up the webcast.
Thanks, Scott. So just we'll now close off the webcast with 2 more slides. Moving to Slide number 19. Just focusing on our sustainability report for 2018. Nearly a month ago, we released this report, which was based on the globally recognized Global Reporting Initiative Framework, the GRIF.
The report was also independently verified and highlights our performance in environment, health and safety and social performance. It highlights indicators that are material to our business and our stakeholders and captures opportunities for improvement. We pride ourselves on our ESG disclosure. We are in the process of releasing new policies related to climate change, which we believe is the first amongst gold companies of our size. We are already signatories to the UN Global Compact and are looking for other associations and policies that align with our business and needs of our stakeholders.
For a company of our size, we do a lot well and we do consider ourselves to be leaders in our industry in this space. Just moving on to Slide 20, which is the last slide for our presentation. The second half of the year is expected to deliver higher This is, of course, dependent on the outcome at Didipio. This is of course dependent on the outcome at Didipio. As we've mentioned, we're appealing the decision on the injunction with the Philippines Court of Appeals in Manila and working closely with the DNR and MGP to renew the FDAA.
We are committed to our stakeholders at Didipio and neighboring communities. We will continue to work in partnership with the national government and regulatory authorities. In accordance with the law, we will always comply with our responsibilities under our contract with the Republic of the Philippines. We remain committed to pursuing genuine and effective engagement with all stakeholders. At Haile, the mitigating strategies we implemented in the Q1 have already delivered good results in the Q2, and we expect continued improvement going forward.
We also expect higher grades from the Snake pit in the second half of the year and in the Q4 in particular. As we continue to commission the regrinding circuit at Haile, we do believe that recoveries will increase on lower steady state grind sizes. We are feeling good about the future of Haile. At Macraes this quarter, we expect a similar operational performance in the 3rd quarter as we had in the Q2 before getting into the better grades in the 4th quarter. Production and cost at Waihi are expected to be similar in the second half of in the second half as the first.
We will continue to ramp up development of the Martha Underground. Craig and his team are drilling several exploration targets around our operational footprint. We're excited at the continued strong drilling at Martha Underground and WKP and expect to have a midyear resource update for both. As I just mentioned, ESG is a major focus for us and has been for a very long time. We continue to mature our programs and we remain staunchly committed to delivering a strong health and safety performance, while operating to the highest of environmental and social standards.
And notwithstanding the current political challenges we're currently going through in the Philippines, I'm very pleased with the state of our business. We have 4 solid operations and a substantial growth pipeline. We don't believe there is any other gold company that can deliver a 50% increase in gold production through organic growth opportunities, while also delivering an increase in margin. We will continue to work hard to deliver this and add value to us for our shareholders. So this concludes the formal presentation segment of the webcast.
We'll now take some questions over the phone, And I'll turn the webcast over to the moderator to facilitate the Q and A session. Thank you.
Thank you. Your first question is from Michael Slifirski from Credit Suisse. Michael, please go ahead.
Yes, thanks very much. Hi, Wilksy. Look, a few questions around Didipio and I'm sure there's some you probably can't or don't want to answer, but I'll ask them anyway. So with respect to the sustainability of stockpile processing, how long before you hit the next consumable constraint, whether it be fuel, grinding media, reagents? How long before that ceases, please?
We
will continue we've got plenty of ore stockpiles there, as you know, and we'll reassess the ability to continue operating on a regular basis. We can't give you a prediction of when that is, but there is plenty of stops on-site.
Okay. With respect to then the appeal, from a statutory process, how long does that take? Is that a long drawn out thing between submitting an appeal that's being heard and an outcome? Do you have any idea of how long that period might be?
There is a process to go through and it's not a long winded process, but we can't give you a definitive time line, Michael.
Okay. Thank you. Well, I'll keep trying. The FTAA extension renegotiation, again, is there a statutory period for that? And if that comes first, does that override the local activity?
That's correct. The FDA renewal will basically make all the any issues with the local government go away. And there is no statutory limits negotiation.
Okay. And then with respect to the unsuccessful initial court hearing, does that have anything to do with the unresolved suspension order? Or are they separate issues?
No, it's got nothing to do with it whatsoever. The initial hearing was just for an injunction to allow us to keep operating and have the restraining order suspended. So that's what the injunction was there for.
Yes. Okay. When the blockade is freed and you can get consumables back in, How long before you can get the underground back into production? So I guess I'm interested in what the period you've got before you start into your guidance given that first half it seemed that you did it with your bank to cover up for the shortfall from Haile. So it seems like you've eaten into a bit of the contingency that you otherwise might have had operationally.
Well, just on guidance, we are confident with our guidance for the full year at this stage. So we will just have to wait and see how Didipio pans out. I can't we don't have any definitive timelines for the ramp back up. But as you know, it will take a bit of time, but in the order of weeks.
Yes. Okay. And finally on Haile, is there any sort of political risk insurance that you carry that can cover for any sort of material losses during the cessation period from underground?
For Didipio, you mean?
Sorry, sorry. Yes, absolutely. That's what I meant. Sorry.
No, there aren't.
Yes. Okay. And sorry to take a bit of time, but I'm just moving to 2 other areas very quickly. The increased material movements accelerated stripping during the first half because of favorable weather. Does that change your expectation for total material movements of this year?
Or from an all in sustaining cost perspective, are we still good with respect to material movements? There's no increased number that might add some costs to what guidance is currently.
We have moved a lot of the pre strip material for this year already. I think it's around about 70%. Michael can confirm that. But obviously, we'll go mining as hard and as fast as we can to get our unit cost down. Michael, do you have any comment on that?
No, Mick, you're right. That's what we've done from the pre stripping point of view, but no additional sort of cost to what we've put forward or no additional movements to what we put forward. But we will while the weather is good, we'll continue pushing on through.
Okay. Thanks, Samsit. Thanks, Willsey.
Thanks, Michael.
Thank you. Your next question is from Geordie Mark from Haywood Securities. Please go ahead.
Good morning, guys, good afternoon, wherever you are. Yes, thanks so much for the call. Just a couple of questions. On Didipio, but perhaps a different aspect here. On the crown pillar stabilization, when was that initially sort of envisaged?
Was that something that was more reactive in terms of what you've been seeing for the stability of what you're as you're mining? Or is this sort of part of the initial long term development plan that was only now sort of, I guess, effectively initiated and completed in Q2?
No. It hasn't been part of the long term plan going back a couple of years. It's something that's evolved from our knowledge of the ground conditions, both in the pit and the underground. And refining and improving our mine plan and the stability of the underground. So you might recall that Geordie that we did take some of the Crown Pillar last year and that was to take out the very soft material around the breccias and that was to strengthen the crown pillar.
We backfilled that with cemented rock fill. That was very successful. And we also convinced the regulators that it was a safe and smart thing to do. So we then extended our thinking to what else can we do to maximize recovery and what can we do to improve the stability of the ore body and we conducted a study in the 1st part of this year. Some of the engineers got stuck into that and they came up with this new plan.
So it is, I guess, innovation in mining and basically strengthening the whole crown pillar only increase recovery or maximize recovery of the underground ore, it also brings production forward that would otherwise have been mined at the end of the mine life.
For sure. Sure. The delta on potential recoverable tonnes, I guess, that you're thinking about given this, I guess, increase in stability that you're envisaging?
I couldn't give you an exact number on that, but you're not talking 10% or something, you're talking 1% or 2%.
Right. Okay. No worries. Thanks. Maybe a different
Yes.
Very high grade stuff.
Yes, for sure. And with maybe moving to NZ, Tandem Macraes, Obviously, with commodity price going where it is, and you're kind of above the hedges now, but how is Macraes placed in the Gold Tungsten project in terms of longevity? How do you see that sort of impacting? And what are you doing to look at mid- and long term plans, given the bolstered and gold price environment we're seeing?
Yes. Well, it's a good question, Geordie. The as you know, the gold price in New Zealand dollar terms is now over $2,100 So I think it's about $2,130 or something. And we always thought that the gold tungsten project would be viable above 2,000. So it's starting to look very interesting.
We continue to do drilling at Macraes. As you know, we've identified another underground at Golden Point, which is an extension, if you like, or it's contiguous with the ground field project where most of the tungsten is. And we're also finding a lot of tungsten depths in Golden Point. So it's starting to get very interesting. And the Golden Point sorry, the tungsten processing work is starting we're looking at what they call a VSI, verticals, single or something like that, different kind of mill for milling tungsten ore and then using gravity.
So we're starting to get closer to finalizing flow sheet for recovery of tungsten and may even be able to tack on the tungsten circuit on the back of the current plant as a pilot and then produce a marketable concentrate. That work is continuing. In the meantime, we're still drilling for extensions of the project and increases in the size of that the gold tungsten project, which of course does require the mill to be moved. But with current gold prices, it's starting to look pretty attractive.
Okay. And would we anticipate having sort of an update by the end of the year or something on the metallurgical aspect of it?
I hope so. I hope so. It's not our number one priority, Dewey. We've got a lot of work to do at Waihi, bringing that all together and demonstrating another 15 years of mine life there. We are obviously very busy at Haile implementing the expansion plan there.
And the price,
we're finalizing
mine plans now to take it out to 2024 before you would consider any larger extension of the mine beyond that. So yes, look Macraes is looks like it's got a long life ahead of it. It wouldn't surprise me if it's still there in another 20 years' time, where it's going. But yes, hopefully something in the next 6 months or so.
Okay, great. Thanks. I'll pop back in the queue. Cheers.
Thanks, Jody.
Thank you. Your next question is from Daniel Morgan from UBS. Daniel, please go ahead.
Hi, Tim. I was just a question relates to Haile. So you've done you've got well ahead on your stripping plan clearly this quarter and this half year. Just and you're saying that the mill is operating quite well, particularly at the end of the quarter. Just wondering how much ore in the second half you can pull out?
What sort of run rates you're expecting now you've done all this pre strip? What can we expect in terms of ore and potentially even grade?
Michael, would you like to answer that?
Sure, Mick. The grade will be improved because we're sort of getting down to the better part of Snake. So the Snake pit, we're basically into the benches where we'll mine down to the end of Phase 1, which is basically all in all. And Red Hill with the stripping of with the pre strip and bringing that down, there's still some waste movement in the Red Hill pit, but we'll be getting into the intermediary orebody as we go down there as well. So the ratios will improve, but that being said, we will then sort of commence the pre stripping on lead better as well, but not at the rate.
So the strip ratio at the moment for the first half was around about 6% or over 6%. I don't have it on top of my head, sorry, what the second half TRIP ratio will be.
Yes. Maybe just a quick follow-up. Sorry to interrupt. I was also, I guess, thinking about are you going to be processing fresh ore in the mill? Because looking at the numbers, it looks like you were pulling in some stockpiles into the mill, I.
E. The mill was outperforming the mine. Just trying to get some sense of what's happening in the second half?
Yes, that's right. So I'm sorry, I missed the question, but we'll be stockpiling fresh ore through the second half. So the processing plant will be taking all fresh ore in the second half.
Your next question is from Matthew Murphy from Barclays. Matthew, please go ahead.
Hi. I was wondering what the grade is of the stockpiles at Didipio that you're going to be processing this quarter?
It's 0.6 gold and about 0.35 copper.
Okay. And then because of the blockade, you won't be able to ship that concentrate, right? You'll just be stockpiling it?
Correct.
Yes. Okay. And then just on the FTAA processing, is it actually the President's signature that's required on this thing? And I mean, can you speak to it all what efforts that you might be taking or can take to try and get this prioritized?
Look, we continue our discussions with the government, including the Office of the President who have the authority to sign the approval. So we're
not going
to discuss the details of that other than say it's a good working relationship and we are moving it forward as quickly as we can.
Okay, thanks.
And I'm confident of a positive outcome.
Thanks. That's it
for me.
Thank you. There are no further questions at this time. Please proceed, Mick.
Well, thanks, everyone, for your time, and thanks for your support for OceanaGold. That concludes our webcast and conference call for today. There will be a replay available on our website later on. On behalf of Michael, Scott and the rest of the team, we thank you for joining us. Should you have any follow-up questions, please don't hesitate to contact our great Investor Relations team.
Thank you. Bye for now.
Ladies and gentlemen, this concludes your conference call today. We thank you for participating and ask that you please disconnect your lines.