A group of underwriters has agreed to purchase 30 million shares in OceanaGold, netting the company Can$93.3 million to funnel into its Didipio copper-gold project which is about to produce its first copper-gold concentrate.

The syndicate is led by Macquarie Capital Markets Canada and Citigroup Global Markets Canada and includes Cormack Securities, GMP Securities and BMO Capital Markets.

The offering is expected to close on or about 18 December 2012, and is subject to the approval of the Toronto Stock Exchange. The syndicate has also been granted an option to purchase up to an additional 15% of the number of securities on the same terms and conditions within 30 days of the offer closing.

“While commissioning at the Didipio project remains on schedule with the commencement of milling last week, the Board remains focused on maintaining more prudent gearing levels in line with industry peers. Accordingly, the company will use the net proceeds from the offer to reduce outstanding debt, and provide balance sheet and operating flexibility,” says OceanaGold’s managing director Michael Wilkes.

Commissioning activities are currently under way at the $350 million Didipio project in the Philippines’ northern Luzon, which is expected to annually produce 100,000 ounces of gold and 14,000 tonnes of copper over an estimated 16 year mine life.

OceanaGold has already secured an offtake agreement with Geneva-based commodity trader Trafigura for all the copper and gold concentrate output from Didipio for the next five years. Trafigura is a leading international commodity trader that specializes in the supply and transport of concentrates, and owns and operates concentrate storage facilities in China and worldwide that support the company’s trading activity.

OceanaGold’s New Zealand assets include the country’s largest gold mining operation at the Macraes goldfield in Otago and the Reefton open pit mine on the west coast of the South Island. The company annually produces about 230,000 ounces of gold from its New Zealand operations.


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