OceanaGold sees supply deal for Didipio mine

Posted at 02/10/12 6:29 PM

MANILA, Philippines - Australian miner OceanaGold expects to sign an off-take agreement in six months with a trading firm for gold and copper from its flagship $350-million Didipio mine in northern Philippines, set to begin production at the end of 2012, a top company official said on Friday.

Chief Executive Mick Wilkes said the firm would spend up to $10 million for exploration projects this year around Didipio, in Nueva Vizcaya province, to boost the mine's output and extend its life beyond 16 years.

The mine has 1.68 million ounces of gold deposits and 229,000 tons of copper.

"We're in negotiations with a number of companies for an off-take agreement at present," Wilkes told reporters after speaking at industry forum in Manila.

"We will bring Didipio into production at the end of this year."

Mine construction is now underway and gold production will ramp up to 100,000 ounces a year by the end of 2014 from an initial annual rate of 18,000 ounces next year.

Wilkes declined to name the trading firms OceanaGold was talking to. It was previously in talks with commodities giant Glencore, which owns the Philippines' sole copper smelter and refiner PASAR, about supplying gold and copper from Didipio.

PASAR, or the Philippine Associated Smelting and Refining Corp, has shut its smelting and refining facilities after a fire in early January.

Wilkes said OceanaGold, which now produces gold from two mines in New Zealand, will use funds raised from shareholders to fund the Didipio project.