Oceana Group Ltd

Good morning and afternoon, ladies and gentlemen. Welcome to the Oceana Goal 2021 Third 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. And if at any time during this call you require needed assistance, please press star zero for the operator. Also note that the call is being recorded on Thursday, October 28th at 5.30 p.m. Eastern Time. And I would like to turn the conference over to Sam Pazuki. Please go ahead, Sam.

Thanks so much, Sylvie. Good evening. Good morning. Welcome to Oceana Gold's third quarter 2021 results webcast and conference call. I am Sam Pazuki, Senior Vice President, Corporate Development for Oceana Gold. I am joined today by Scott Sullivan, Chief Operating Officer and Interim CEO. Scott McQueen, Chief Financial Officer. Sharon Flynn, EVP Sustainability, David Mondano, EGM Sale Operations, David Wei, EGM Philippines and New Zealand, and Craig Febreze, EVP Exploration. 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. I refer you to the disclaimers on the forward-looking statements in our presentation. I will now turn it over to Scott Sullivan to walk you through the key highlights of the quarter. Over to you, Scott.

Thanks, Sam. Good evening, good morning to all. It's a pleasure to be with you here today. Firstly, I'd like to add that it's wonderful to be with Oceana Gold, a company with a long and rich history in the gold mining industry. Although I've only had my feet on the ground here for the past five weeks or so, I've been really impressed with the quality and the potential of the assets in the portfolio and the highly talented workforce that we have throughout the organisation and the strong shareholder base. We do understand we have work to do to regain market credibility and our reputation in the gold mining industry as a business that generates healthy margins, returns capital to shareholders and makes prudent capital investments on high margin growth opportunities. Although early days for me here, I am very confident in the long-term future of the business and what I can assure the investment community is that together with the board, the executive management team and employees across the organisation, We are fully aligned and committed to improving our operational performance and delivering long-term sustained value to shareholders. If we look at slide three, looking back at the third quarter, I'm pleased with the financial performance of the business and it does reflect the importance of having a diversified portfolio of assets. We delivered our fourth consecutive quarter of improved profitability, primarily related to the renewal of the FTAA, paving the way for Gold Copper Concentrate sales from Dedipio, and continued strong performance at Hale. The Dedipio restart activities continue to progress well, despite the sometimes restrictive measures that we have enforced in the quarter to safeguard the health and wellbeing of the workforce, following an increase in COVID-19 positive cases. We are pleased to achieve some key milestones in the third quarter and in the beginning of the first quarter. Firstly, we began underground mining at the Dipio a month ahead of schedule with ore development. The ore is being delivered to the ROM pad ahead of milling, which we expect to begin mid-November. Secondly, we successfully completed the transportation of the gold copper concentrate inventory on hand on October 2nd. We invoiced over $60 million in revenue and received approximately $38 million in cash as at the end of the third quarter. And third, we have achieved the critical mass in our recruitment efforts that has allowed us to achieve these milestones and continue to progress restart activities. At Hale, we delivered a stronger-than-expected third quarter, mainly a function of better-than-expected grades out of our Leadbetter Phase 1 PIP. With a stronger year-to-date performance, we are again increasing our guidance range at Hale and now expect the operation to deliver 175,000 to 180,000 ounces of gold. We continue to advance the HALES technical review that will culminate in a new mine plan expected to be completed in the first half of 2022. We are pleased to maintain our consolidated full year guidance, which again reflects the importance of having a diversified portfolio of assets We are expecting higher production from Hale and Digipio to offset the softer production forecast now for the New Zealand operations.

Moving on to the next slide.

We're very pleased to see Digipio contributing again to the business with third quarter sales of over 19,000 ounces of gold and 3,400 tonnes of copper. Consolidated production year on year was driven higher by Hale and partly offset by Macrae, Third quarter production was expected to decrease quarter on quarter and was in line with our expectations as hail delivered a better than expected performance, while the New Zealand operations were impacted mainly by the nationwide lockdown. All in sustaining costs for the quarter and year-to-date decreased over the previous reporting periods, which was mainly a function of higher sales volume partially offset by higher operating costs and increased capital investments, mainly related to the hail expansion, market underground ramp-up at Waihe, and pre-stripping at both Hale and McCrae's. Financial results for the quarter was solid and driven mainly by Divipio gold and copper sales and continued strong performance at Hale. Our adjusted earnings per share came in at $0.07, which was ahead of estimate, while cash flow per share came in at $0.12 before working capital movements and excluding the physical delivery of the remaining gold ounces as a part of the 2020 gold prepayment arrangements. I will now turn the presentation over to David Londono, EGM at Hale, to walk you through the Hale results. Thank you, David.

Thank you, Scott, and hello, everyone. Moving on to BlackWide. We had a very good quarter of gold production at Hale and nearly 46,000 as of today. This was above our expectations with better than expected grade 9 out of the ledger peaks. Although grade reconciliation was about 20% higher than predicted, we believe this to be near-term benefit and we fully expect to align more closely to the resource model going forward. Mining operations were mainly at ledger phase 1. As we progress through this stage of less better, we will go through a period of materially lower grades, which we expect to continue to see for the first half of the next year. Mining rates are steady. However, we continue to be limited by the permitted area allowing for additional start storage facilities, and wireless discharge, with the continued delays in receiving the LCIS associated permits. The end-stage was lowered quarter-on-quarter on decreased throughput rates related to processing hardware oil from less data. We continue to implement flat fermentation initiatives to push throughput rates higher not only with less data oil, but through all PITs. Only sustaining costs increase quarter on quarter, mainly due to increased restricting capital, which is tracking higher than originally guided. This reflects a higher allocation of mining costs to capital than previous forecasted, but the amount of total spent is unchanged. With the year-to-date performance, we have increased our production guidance on hail for the second time this year. We now expect hail to deliver a per-year growth production between 125,000 and 180,000 ounces. Despite the reclassification of mining expense to capital, the all-in sustaining cost guidance remains unchanged at 1,100 to 1,150 per ounce sold, while gas costs have decreased to 650 to 700 per ounce sold.

Moving on to slide 6.

We continue to progress the HAY technical review. This review is intended to maximize cash flows from the operation and maximize the value of the asset. with already implementing changes to the operation which will begin to bear fruit over the near term. I do expect some more quick tweens, however, some changes are more structural in nature and will take some time to implement. The primary focus areas of the technical review are as follows, operating costs, capital allocation, water management, pack and waste management, and employee turnover. More specifically, on the mining front, we are starting to see the benefits of changes that we have made so far, such as improving haul roads on open fields and road drainage. Unlike the past, when mining operations shut down during heavy rainfall, we don't stop now. We continue mining, unless there is increment weather, such as hurricanes or lightning. The improvements to the roads have also doubled the life of the whole stock tires, which just six months ago were averaging 3,000 hours, are now averaging over 6,000 hours. My target is to achieve 7,500 hours in the medium term. My expectation is that these changes will drive maintenance costs lower and increase mine utilization rates while increasing productivity. Last year, mine utilization was in the mid-50s. We are now at the mid 70s and my objective is to achieve a mine utilization rate in the mid 80s. Mining operations were previously driven by volume. This is how coal mines work. Hail is a coal mine and the ore body is geometrically complex and does not lend itself well to bulk mining approach. We will refocus our efforts on the quality of the ore we mine and deliver to the process Going forward, we will be implementing an RC drilling program for oil drain control and for improved pad waste classification. We will configure at least one of the shows for a backup configuration as well to be able to mine more selectively. This, therefore, will be designed to reduce ore dilution and optimize pad waste that we have acquired to deposit in specially lined waste facilities. Over the near term, particularly as we continue to wait for the LCIS permits, we do need to continue managing two critical aspects of our mine operations. One is water management and the other one is waste management. First, on water management, we are limited by the capacity of the water treatment plant and given that the rainfall history of Hale is well documented, you know that we have a considerable amount of water that needs to be discharged. The weather has been cooperative this year which has helped greatly. We have also added evaporators and will be purchasing more units later this year. Respecting this unit will reduce our water levels by approximately 30%, which again is very significant. With the SEIS, we will be able to expand the water treatment plant and discharge higher rates of water. Until then, we have to move water around, and at least for next year, we may have to slow mining efforts due to restricted access to lower ventures. On the waste management front, Our mining approach to date has produced more packed waste than in Port Gazette, mostly due to the way packed waste material has been stratified in our thermics. As I mentioned, with more selective mining we can reduce the packed waste of the life of the mine even below the levels as shown in last year's technical report. Additionally, we will work with the regulators to demonstrate, with the use of scientific data, a reclassification of some of the potentially acid-generated materials so that we can store these waste safely in traditional waste storage facilities. While we wait for the SEIS, we have to store packed waste in inactive pits and re-handle more than necessary. These factors have been contributors to operating costs being higher than expected or reflected in the technical report. We will always work to drive operational efficiencies and lower costs. However, we are focused on controlling costs by meeting these restrictions and ensuring we are being realistic on what we can drive our costs down to as part of the technical review. The unit cost assumed in last year's trading club report will be difficult to achieve. However, there may also not be too far from up to market. Either way, the mine plan will assume achievable cost assumptions, which will increase our club grades, and increase the club grades will result in the reclassification of some of the mineral reserves. Again, I will reiterate the goal that we will not be mining marginal ounces or ounces that destroy value. We will be more selective in what we mine and process so that we generate some free cash flows and sufficient risk-adjusted returns for shareholders to maximize the value of the asset. I will not be measured by how many ounces of gold we produce a day. I will be measured by how much heat gas flow we generate. This is the culture that I am still in at home now. On the processing side, there is some work we will need to do. The blood fragmentation improvements we have mentioned are expected to drive higher support rates and increasing meal utilization. It will help with blending of all that will improve processing genetics with an aim to improve steady-state goal recovery. We have made all the improvements already such as increasing the energy stop time from several hours to seven days. This means if we have downtime of the primary closure, the mill will continue to run. All in all, we expect to deliver a new life and mind plan in the first half of 2022. Again, the implementation of changes is ongoing and the value of realization is expected progressively over the next 18 months. Some of these changes are expected to deliver near-term values, while other changes are more structural in nature and will take additional time to implement and drive value over an 18-month period. The timing of the new mine plan will also be depending on receipts of the SEIS and associated permits. Moving on to slide 7. The HAIL SEIS process continues and the company now expects the final SEIS, the Record of Decision and Related Permits, in the first quarter of 2022. As I have laid out just a few minutes ago, these techniques relate to the expansion of the operating footprint to accommodate raised stockpiles, expansion of the water treatment plant to allow for higher water discharge rates, as well as development of the hail underground. Engagement with the U.S. Army Corps of Engineers and South Carolina Department of Health and Environmental Control is ongoing as the company responds to inquiries received post-release of the draft SEIS. We have also worked closely with local stakeholders who are supportive of what we are proposing. Although we don't see any job stoppers and the process in itself is complete as we await a decision, We have had to implement workarounds to accommodate water and waste. Should the LCIS process continue to be delayed, then we will have no choice but to slow down mining and, in the meantime, incurring mining costs related to waste, re-handling, and water management. We will continue to engage with the regulatory agencies on a weekly basis. We have continued constructing surface infrastructure related to underground operations. We can develop the portals. However, we require the EICIS permits to begin building the underground tunnel and mine. Once underground, we expect to drill extensively to expand the current resources at Horseshoe and Palomino and drill crest near targets. We continue to see great potential for reserve and resource growth through underground targets. I will now turn the presentation over to David Wade.

Thank you, David, and hello, everyone.

On slide number eight, in New Zealand, the government announced a two-week nationwide lockdown to address the spread of COVID-19 in mid-August. This order impacted both of our New Zealand operations, which were eventually shut down for the duration of the lockdown. On September 1st, we recommenced operations at both Waihi and Macraes in a spaced approach, which aligned with the government COVID-19 standards. At Macraes, we produced 25,720 ounces of gold in the third quarter, which decreased quarter on quarter due to the nationwide lockdown. The restart and ramp up of operations were slower than expected. due to subsequent regional lockdowns impacting timing of supplies and movement of workers. These included the gradual easing of restrictions from Level 4, being a lockdown, to Level 3, which still restricts access to the operation, and then to the current Level 2, which has some limited restrictions. The other complexity for us at McCrae's this year is that we have had to weather geotechnical constraints at Coronation North, and reduced throughput rates from planned and unplanned mill disruptions. We've essentially been playing catch-up all year. The good news, however, is that full operations were restored at the end of the third quarter. The process plant issues are behind us, evidenced by currently achieving record throughput rates, and we are making good progress on mining across all fronts. I'm also pleased to announce that we have achieved first ore from the Golden Point underground, as planned. With these improvements, higher throughput rates and better grades, we expect to deliver a rebound quarter to achieve our narrow guidance range of 138,000 to 143,000 ounces of gold for the year. I'm also pleased to announce that late in the third quarter, we welcomed Mike Fisher as the new general manager for the McCrae's operations. Mike has extensive mining experience, having recently worked in Mongolia and before that as President and General Manager of the Khunkor mine. His extensive experience and leadership will serve the McCrae's operation and Oceana Gold well going forward.

I'll now move on to slide 9. Right here produced approximately 7,500 ounces of gold in the third quarter.

The third quarter production was also impacted by the two-week shutdown of all operations as part of the New Zealand Government's mandated COVID-19 lockdown measures in August. The ramp-up of operations was further impacted by ensuing regional lockdowns affecting the workforce, supplies and equipment availability. Despite the lockdown, development at Marker Underground progressed, with 2,185 metres of advance achieved for the quarter. even though impacted by the COVID-19 lockdown in August. Development continues to focus on the Rex, Royal West and Edward mining areas. Production in Rex and the upper levels of Edward also began late in the quarter, with 6,600 tonnes of scope-all mines. Through the course of mining the Edward vein, we have experienced some negative reconciliation and have subsequently updated our resource models, which will affect our near-term production particularly in the fourth quarter. The two-week lockdown compounded the impact by deferring alternative high-grade panels to next year. As a result, the Waihi mine is now expected to produce between 30,000 and 35,000 ounces of gold, with a revised organ sustaining cost guidance range of $1,525 to $1,575 per hour. We do not expect this to have a long-term impact on the operation, with resource definitions and grave control programs advancing well. On the exploration front, the two-week lockdown meant no drilling during this period. For the quarter and much of the year, drilling continued to focus on the Martha Underground, mainly for resource conversion and definition. At the Waihi North project, We had originally planned on drilling 10,000 metres at Tsarekiraponga. However, the lockdown, along with an extended seasonal drought, means we will fall short of our drilling target. The drilling we have completed this year at Tsarekiraponga has focused mainly on resource conversion of the East Graben Bay, with a step-out hole testing the extension of the East Graben structure along strike to the southwest. We continue to be very pleased with the drill results. Drilling this year has extended mineralisation of the East Garden vein, now with a 1.2 kilometre strike. Drilling is also supporting the technical studies underway for the pre-feasibility study. Preparation for the lodgement of a consent application for the Waihi North project, inclusive of the Atarikitiponga underground mine, continues to progress. with environmental assessments nearing completion. Over the next two quarters, we will continue engagement with a broader group of stakeholders as part of the consenting process. We expect to lodge our formal consenting application, inclusive of stakeholder feedback, with the regulator within the first half of 2022. We continue to advance the technical study as part of the consenting and pre-feasibility study worksheets. The work is ongoing and supported by resource conversion drilling at Pudicator Ponga. Although the pre-feasibility study is contemplated for completion in the first half of 2022, we have increased the scope and may increase the scope further. Additionally, we are looking to permit a third village to focus on extensional drilling at Wharekitaponga to further enhance the project value proposition. The point is that the opportunity at Wharekitaponga is too compelling for us to rush through some of the work necessary to properly advance this project. The impact on the timing of such work is being considered and could result in extending the date of completion of the study.

Turning to slide 10.

I have recently returned from spending six weeks in the Philippines and at the Dipio. The Dipio restart activities continue to progress well, with key milestones achieved during the third quarter and into the fourth quarter. These milestones include the following. Successful transport of the gold copper concentrate, recommissioning of the primary crusher and undertaking critical maintenance activities of the process plant, recommencement of underground mining, and delivery of underground ore to the Rompat, which will continue to progress. In the third quarter, the Diffio recorded sales of 19,151 ounces of gold and 3,356 tons of copper. Also in the third quarter, 1,096 ounces of gold and dore were sold, with remaining sales related to the gold-copper concentrate. And at the end of the quarter, we had received approximately $38 million from the sale of the concentrate, representing approximately 60% of the total nettle value of the full inventory. The remaining funds will be received in the fourth quarter. Recruitment and training activities remain the critical path to restart and ramp up activities. These activities are tracking to plan, with recent recruitment activity having been slowed to address the increase in COVID-19 cases. Despite this, we do have a critical match to safely ramp up operations. Recruitment activities are ongoing and we continue to expect to achieve 90% recruitment of the complete workforce by the end of the year. Processing plant restart and ramp up activities continue to progress ahead of the first mill feed expected in the middle of November 2021. In the third quarter, we completed several key activities, including maintenance milestones of bore mill motor replacements, sag and bore mill gearbox and lubrication system upgrades, relining of both the sag and bore mills, and conveyor belt replacements. In mid-September, the primary crushing circuit was successfully recommissioned, leading to the recommencement of crushing emergency stop Cs. Approximately 75% of the process plant restart activities have been completed. We are tracking the plan for the restart of milling expected in mid-November 2021. Underground mining restart activities continue to advance well, with continued and ongoing recruitment and training of underground operators, completion of safety inspections, upgrades to underground mine equipment, including pumping facilities and the delivery of supplies and equipment. During the quarter, a Sandvik Rhino 100 mobile race ball rig and Sandvik TH663i underground haul truck were delivered successfully. Prior to the end of the quarter, we began underground mining activities, with the first two development cuts resulting in a total of 625 autumns delivered to the ROMPAD. The commencement of all developments is approximately one month ahead of schedule. We expect scope development to commence in November. Again, COVID-19 remains a risk to our restart and ramp-up plans. But despite a jump in new cases in the third quarter, everyone infected recovered without any serious illness. We continue to manage the risk, and we are working with local authorities to facilitate vaccinations. Our COVID-19 protocols for the Zipio include testing and screening before mobilisation and entry to the operation, precautionary isolation measures, regular rapid testing and screening of the workforce, and ensuring testing capability and capacity with efficient turnaround of results. Currently, approximately 70% of the Oceana Gold Philippines workforce has received at least one dose of the COVID-19 vaccine, with 55% of the workforce being fully vaccinated. For the fourth quarter, the DPEO is now expected to produce between 7,000 and 12,000 ounces of gold, This was previously 5,000 to 10,000 ounces. And also to produce 1,000 huns of copper, with the range reflecting the ongoing risks noted. For the full year, the DPO gold sales are expected to range between 25,000 and 30,000, which was previously 23,000 to 25,000, whilst copper sales are now expected to range between 4,500 and 5,000 huns. 2021 oil and sustaining costs is now expected to be between $100 and $150 per ounce sold.

Moving on to slide 11, here we have a couple of photos. One of the first cuts taken underground, and the other illustrating the resumption of crushing.

We are very pleased with the progress at the dip here, and look forward to providing additional progress updates to the market. Turn it over to Scott McQueen to walk you through the financial performance of the business.

Thank you, David, and hello, everyone.

Over the next few slides, we'll cover the key elements of our third quarter and year-to-date financial results. As Scott's already mentioned, and I'm also pleased to report, the third quarter represents the fourth consecutive quarter of improved profitability for the company, noticing also that the prior quarter was one of the most profitable in the past three years. Adjusted net earnings for the quarter were $53 million, or $0.07 per share. This takes the year-to-date adjusted net earnings to $0.16 per share, fully diluted. The quarter-on-quarter improvement in profitability was driven by the value realisation on the Dipio inventory, the majority of which we managed to transport and invoice within the third quarter, which was ahead of plan, plus approximately $17 million, or just over $0.02 per share, was related to one-time tax credits on the recognition of tax losses and other sensory differences as we again generated revenue in the Philippines. While gold sales from hail were lower quarter on quarter, they did exceed expectations, which partially offset a weaker performance in the New Zealand operations, where both were impacted by the nationwide COVID-19 lockdown. We are looking for a material rebound at both New Zealand operations in the fourth quarter, At Hale, the fourth quarter sales are expected to reduce consistent with the grade profile. The DTO sales will also be reduced given the bulk of the inventory was invoiced in Q3. However, the production ramp-up will continue ahead of more significant and sustained contribution into 2022. The combination of these operational factors, also noting the one-time Philippines tax credits we did recognise in Q3, means we do expect a softer final quarter in terms of underlying group profitability. Operating cash flow increased $33 million this quarter, while EBITDA was in line with the prior quarter. The third quarter included a lower level of prepaid sales, which totaled $17 million, as compared with approximately $60 million in the prior quarter. We completed the final physical delivery into the prepaid in July, and as we stand today, and at the end of the quarter, we have no hedging contracts in place. Investing cash flow increased slightly to $83 million, representing the highest quarter of investment we expect for the year. Year-to-date cash flow for investing activities is total $236 million, with higher capitalised mining costs and gross capital investments at hail, the continued ramp-ups of the Martha and Golden Point undergrounds and ongoing exploration. Financing cash flow in the third quarter included the drawdown of $50 million from the resolving credit facility, as we moved through the low point in the liquidity cycle, commenced the monetisation of the ZPO inventory and shifted focus there to the round-ups of operations. As advised in the July webcast, also at the beginning of the third quarter, we did close an additional $30 million short-term working capital facility, which remains undrawn. Operating cash flow, excluding working capital movements, equated to 12 cents per share for the quarter, bringing in the year-to-date cash flow per share to 34 cents fully diluted. Moving on to slide 13, where we talk about our capital investment. Consolidated capital expenditure in the third quarter was $91 million, a slight decrease quarter on quarter, with lower gross capital invested partially offset by our higher capital mining costs. Year-to-date capital expenditure of $255 million increased approximately 30% over the prior year, reflecting increased capitalised mining costs at Hale, Macraes and Martha Underground, along with the planned investments associated with the HAL expansion, the development of the Martha Underground at Waihi and the Golden Point Underground at Macraes, plus ongoing exploration activities principally focused in New Zealand. Third quarter capital expenditure of approximately $56 million at Hale, primarily related to The ongoing expansion of mining operations, including the construction of the third tailing storage facility wall lift, heavy earthworks to construct potentially acid-generating waste storage facilities, capitalised pre-tripper tail is expected to be higher than originally guided, reflecting an allocation from mining costs to capital expenditure higher than previously forecast. As this is a reclassification, there is no change in total mining costs or impact on site ethics. However, updated guidance does include a corresponding reduction in the forecast site unit cost, cash cost, sorry, of approximately $200 per ounce, consistent with the increased allocation of operating costs to the balance sheet. McRae's total capital expenditure of $18 million for the quarter, primarily related to capitalised mining associated with the development of the Deepdale North open pit, plus additional stroke development opportunities identified in Fraser's Underground. Third quarter capital spend at YHE of approximately $7 million related to the now completed SAGMIL upgrade, along with ongoing development of Martha Underground. We're also focused on enhancing our capital allocation program to ensure we are generating increased cash flows. We expect 2021 will be peak growth capital year. However, with budgeting and planning in full swing, combined with the ongoing technical review at Hale, we won't have the full details for 2022 until early next year. Moving on to slide 14, which includes a bit more on the balance sheet. As at September 30, you see our cash balance stood at $113 million, with total immediately available liquidity at $143 million. Total net debt was approximately $257 million. The quarter-on-quarter increase in cash reflects the drawdown of $50 million from the revolving credit facility and $38 million collected on the sale of TPO inventory. We expect liquidity to remain relatively flat across the fourth quarter, with improved free cash flow coming out of the New Zealand operations and further receipts from the sale of DDPO's inventory, offset by DDPO ramp-up in production costs and the soft quarter production at hail, where grade is expected to be lower. Capital expenditure across the business is also expected to reduce in the fourth quarter. As part of our capital allocation process, we are committed to and focused on increasing cash flow from every operation to support a balanced business, one that returns capital to shareholders, reduces debt, and reinvests in high-margin projects that will generate positive returns, such as WKC. I will now turn the presentation over to Sharon Flynn to discuss our ESG efforts.

Thank you, Scott. Responsible mining is fundamental to the way we do business. and the health and safety of our workforce is a top priority. At the end of the third quarter 2021, Oceana Gold reported a 12-month mean moving average TRIFA of 3.9 per million hours. This is up from 3.7 per million hours at the end of the previous quarter. In the past quarter, there has been a strategic refocus on safety leadership to engage with the workforce, drive a sustained safety culture, and build on workplace hazard identification and injury prevention. In response to the ongoing COVID-19 pandemic, the company continues to enforce workplace protocols to protect the health, safety, and well-being of employees and contractors. Since the commencement of the pandemic in March 2020, the company has recorded 378 confirmed cases of COVID-19 among employees and contractors globally. This includes 186 new cases in the third quarter of 2021 at the Zedipio and Hale operations combined. With continued risks related to COVID-19, the company has implemented additional controls for the Zedipio operation, including rapid testing and precautionary quarantine requirements. We continue to encourage and promote employee access to vaccines, aligned, of course, with local government requirements. In the Philippines, we support local health agencies to secure additional vaccines, and we also sponsor community distribution. We continue to advance our key ESG initiatives that keep us at the forefront of best practice globally. We view ESG as an enabler of our business today and opportunities for tomorrow. In line with our commitment to achieve carbon neutrality by 2050, we continue to work on setting our 2030 interim targets This includes better understanding of our direct and indirect energy consumption and our carbon footprint. We are also undertaking physical and transitional risk assessments for each of our operating sites to understand how our business can be impacted by climate change, as well as other potential threats related to the transition pathway in net zero. We published our first standalone modern slavery statement in 2021, And in our 2020 sustainability report, we shared how we are knowing and showing our respect for human rights. In Q3, we continued implementation of human rights impact assessments across the company, launched an online team module, and continued development of our responsible supply chain approach. Work to align our tailings management system to the global industry standard for tailings management has progressed throughout the year. including review of corporate governance and accountability frameworks in Q3. We continue to progress towards the goal of 100% compliance with the World Gold Council's responsible gold mining principles by the end of 2022. I will now turn it over to Scott Sullivan to wrap up.

Thanks, Sharon, and thanks, everyone, for your updates. So I'm going to conclude the presentation by highlighting our top priorities that we currently have in the organisation. As I mentioned at the onset of this webcast, there are many aspects of our business that are working well but we've certainly got a lot of work ahead of us and I can assure you that we are acutely focused on the task at hand and will prioritise accordingly. With my feet on the ground now for about five weeks, I can say comfortably that I have yet to see a challenge within the organisation for which we do not or will not have a solution. And more importantly, as I've already stated, we have a highly talented workforce across the organisation and together we will work hard and smarter to rebuild credibility within the market. To that end, we'll continue to restart and progressively ramp up our operations at Digipio while managing the risks associated with COVID-19. We expect underground mining activities to progressively increase to full mining rates within the next eight to nine months. And then there will be a full production rate of 10,000 ounces of gold a month and 1,000 tonnes of copper a month at first quartile oil and sustaining costs. And I think we can all agree that it's a pretty good time to be a copper producer. As David Londono has mentioned, we're having a good year at Hale and expect to deliver on our increased guidance and continue to advance the technical review forward to produce a new optimised mine plan. There will be some quick wins, we'll progressively implement more structural changes that will be designed to deliver long-term sustained value for shareholders. True to the company's committed operational strategy, HAIL will be an operation that maximises cash flows, not one that mines ounces for size or for the sake of producing ounces. At Waihi, we'll continue to ramp up Martha Underground while advancing our understanding of a multi-mine project. The Whare Terrapunga is too high a potential to rush and we'll look to expand the drill program there while advancing the project through the consenting process. We're on track to lodge our formal consenting applications over the next six months. Driving operational efficiencies will never be a one-time effort. We will relentlessly pursue opportunities to drive down our costs and our position on the cost curve. We will continue to manage the risk associated with inflation that's led to higher fuel costs, cost creep on some of our supplies, such as reagents and materials, In addition, we will proactively manage the risks and demand for labour, particularly as the country borders open up and world economies expand, to ensure that we've got the right people in the right roles and not only that we are able to attract talent, but we're retaining them as well. And finally, and most importantly, we are currently reviewing and will enhance our capital allocation process, recognising the importance of generating sufficient risk-adjusted returns and cash flows for shareholders. We will prioritise our capital spend internally, balancing capital needs with returns to shareholders and servicing our debt obligations. I'm very confident and fully invested in regaining our status as a top gold mining company in the industry, and I know our executives and our workforces globally share my enthusiasm for the journey ahead. So I'll now turn the call back over to Sam. Thanks, Sam.

Thanks, Scott. I will present at NISTX of the Q&A session to the operator.

Thank you. Ladies and gentlemen, if you do have any questions at this time, please press star followed by one on your touchtone phone. You will then hear a three-tone prompt acknowledging your request. And if you wish to withdraw your question, simply press star followed by two. And if you're using a speakerphone, we do ask that you please lift the handset before pressing any keys. Please go ahead and press star one now if you have any questions. And your first question will be from Matthew Murphy at Barclays. Please go ahead.

Hi. I have a question on Hale. Thanks for the update on the technical review and the operating philosophy. Just wondering, when you're talking about quality over volume issues, How we should think about that from a cutoff grade perspective, I think your reserves were at a 0.45 grand per ton cutoff. What are you mining to now?

Yeah, Matt, Sam here. Thanks for the question. I'll pass it on to Daveed in a second here to comment on that. But basically, we're still in the process of going through the Hale technical review, still going through what the appropriate cutoff rates would be. As David had mentioned, if you look back the last couple of years or so, we've been really focused on mining material, both times, mining approach. And we need to be more selective, basically, is the bottom line. We are obviously getting a good handle on our costs, our cost base for hail going forward, but we want to make sure that we're using an appropriate cutoff rate so that, again, we're maximizing cash flows from the asset as opposed to mining ounces that has the potential to destroy value, and we certainly don't want that. So, again, we are going through the throes of this Hale technical review. We are well advanced in that study work, and we will come out with additional information, particularly as we complete the new mine plan.

David, is there anything you'd like to add to that? No, I think you responded very well.

So the only thing that I have to add in there is that, yeah, we're still using the 0.45 cloud grade, but we're mining grades that are well above that number. And whatever is coming down at that floor grade, we stockpile, and we only use when we need to use it to keep the mill running. So as volume versus quality, you know, like if you know the coal mines, you know, they want to move tons and tons and tons. And right here, yeah, we want to move quality answers, those answers that pay for themselves and that, you know, not only for mining but also for processing.

Okay. Thank you.

Thank you. Next question will be from Oves Habib at Scotiabank. Please go ahead.

Thanks, Operator. Hi, Scott and Oceana Gold team. Congrats on a good quarter, especially at Hale. Just a couple of questions from me, starting off with DDPO. Now, DDPO underground mining seems to be ahead of schedule, but doesn't look like you moved your guidance for full underground ramp-up that's taking place in June 3 of next year. Are you just being cautious on COVID impacts and continuing COVID impacts and training implementation? Or are there any other contingencies that you are building in to the Diffio underground ramp-up?

Yeah, thanks, Dave, for the question. It's good to actually talk about the Diffio and it being an operation. And it's certainly great to have the Diffio back into the portfolio and contributing in the way that it has thus far. We have made good progress with restart activities and the ramp up and we are ahead of schedule, as you just pointed out, with respect to the underground. But as we've also pointed out, there are still some risks that we have to manage, particularly around COVID and making sure that, again, we're protecting and safeguarding the health and well-being of our workforce. It's also hurricane season, so we do have to factor that in, but we can say that progress is going really, really well. We will continue to manage expectations going forward.

But so far, we've had a good start at the DIP deal. And David Way, is there anything you want to add to that?

That pretty much covers it. Thanks, Sam. But just to point out, I mean, yeah, we have increased the guidance. And also, in terms of stoking, stoke production, that's still on track to commence mid-November, which, of course, only leaves... six weeks for the year, and there's also coincidence with the start-up of milling as well, which is certainly not at maximum throughput either. So I think the guidance is there. Thank you.

Yeah, and just to add to that as well, so milling, again, we expect to start that in the middle of November. It'll be predominantly on the lower-grade stockpile feed that we have on surface, which is 23 million tonnes at 0.3 grams gold, 0.3% copper. So as the underground ramps up, we'll progressively supplement mill feed with the higher grade ore that comes from the underground.

Okay. Sounds good, guys. Thanks for that. Just on my next question is at Yale. In terms of Yale SEIS, now it's expected in Q1 of next year. I think David kind of talked a little bit about Plan B, If it gets delayed further, can you just reiterate what he pointed out and maybe give it a little bit more color there?

Yeah, I'll pass it on to David in a second. But as we've said thus far, the SCIS process has taken a little bit longer than we expected. We do still have very good engagement with the regulator, and that's the U.S. Army Corps of Engineers and South Carolina DHEC. And engagement is basically on a weekly basis as we respond to any inquiries they've had since the release of the draft SBIS. But, you know, we've had workarounds thus far with the operations, and we'll have to continue with the workarounds as we await the final decision and the associated permits associated with it.

David, over to you to just provide a little bit more context.

yes and the plan b let's say if we don't get the scis into one is that we're going to be storing some of the pipe material in in some of the pits that are going to be inactive which means a bit more handle that we would like to do and same with the water water We're trying to discharge and, you know, move the wires through the process plan or through the evaporators. But for the expansion, we need to get the permit from the SCIS. So that would be the plan B for us. And keep mining on the upper benches.

Got it.

Thanks, David.

And, David, now you've been at AL and kind of part of, again, I guess, for the last few months or a little bit more here. Any kind of comments you can provide on, you know, you kind of talked about some low-hanging fruit in terms of operational improvements at Hale. Can you talk a little bit more on the mining as well as processing side? And I know you talked a little bit about water management and waste management, but just, you know, any other areas you can talk about in terms of, you know, improvements?

Yeah, we're getting, you know, we're improving that fragmentation and And with that, we have actually increased our throughput at the mill, going to what we want to be producing about 10.5 million tons a year, going to 3.8. And we're pretty much running at that rate right now. And that's as a result of the fragmentation. We are in the process of going all the way back to break the rock as much as we can. And then once we are comfortable with that we are at the right place, we're going to start optimizing the use of exposures. But that's one big improvement that is a quick gain that we've already seen in the whole world. And, you know, we've seen an increase on the tire life. We're seeing an increase on productivity of the trucks. We're seeing a decrease on damages, an increase on equipment availability. So those are low-hanging fruits that we're just kind of going for them and making sure that we use them.

That's good, everyone. Thanks, and that's it for me. Okay. Thanks, Luis.

As a reminder, ladies and gentlemen, if you do have a question, please press star 1 on your telephone keypad. And your next question will be from Farouk Ahmed at Raymond James. Please go ahead.

Hi. Thank you, operator. David, I just want to follow up on that last question that was asked. You're talking about the mail going to, you know, 3.8 million tons per annum. But in your prepared remarks, you also talked about mining more selectively and slowing down. Can you kind of square those two comments for us in terms of how you look at the mill and your ability to feed the mill or fill the mill given this new kind of strategy or approach on the mining side?

Okay, so in the past, there was, let's say, the targets for the mine were you're going to move 45 million tons or X number of million tons, and the mill had different priorities. So they were competing targets. So the mine was dedicated to move tons, and the mill would build whatever they could get from the mine. We changed that mentality, and the mentality of the mine, even areas where we have the ore, we're going to mine selectively. Even if we lose a little bit of productivity, we're going to make sure that we reduce dilution, that we mine better ore, and we're seeing a big improvement on the grades. And at the same time, keeping the mill full, which is our target. The target is to be able to keep the mill full and the mine delivering what we can deliver.

Okay, maybe another question for you.

I think you said in this quarter your grade at Hale was about 20% above what you were expecting. Can you kind of give us some color on how that happened? What was different from what you were expecting? And going forward, how do you feel confident about, you know, kind of your mine-to-mill reconciliation in terms of, you know, what you should be expecting in terms of grade?

So every year, we convert one of our shovels into an excavator. And we move also from the lower benches. Instead of mining a 10-meter bench where you get a lot of dilution, we're mining in features. So instead of mining 10 meters, one bench, we mine three benches at 3.3 meters each. And that will help. also reducing the amount of waste that we including the ore so we don't have to process that much waste that won't give any any any money let's say any gold and so we that that would be the biggest advantage of having that selectivity and how and improving the mill purpose so so that was what drove kind of that better grade this quarter than you were expecting That is correct, because we're going full-time at Primavera Benches at the bottom of the piece. And obviously, what we have calculated as forecast grades, we came better than that. And I will say mainly because of the selectivity. Once we get into the next year and the next quarter, we're going to be able to predict the grades better and make sure that we mind what we said, maybe not the grade that we said we were going to mind. Okay. We're going to be closer to what we're predicting.

Okay. I understand. And then maybe this is a question that's probably more for when the technical review comes out, but how do you see the impact on your mining costs by going to this more selective measure?

Now, obviously, because we're going to be reducing the productivity, we're going to increase the loading and loading costs. Also, because of the amount of pack material that we're seeing, that is more than what's in the model, that will increase the mining cost too, because we have to construct a line facility to put that pack material. The re-handle of the pack material, the re-handle of the water, that's increasing the mining cost. Eventually, if we are able to declassify the pack material, we're going to see a reduction. But in the meantime, we have to be realistic in that, you know, mining costs are going to increase compared to what we said in the technical review last year. And that will increase our growth rate, which at the same time will probably reduce or convert some of our reserves into resources.

Okay. Thanks for all these answers. That's great. It sounds like there's a lot of opportunity and good luck in

in executing over the next 18 months. Okay, thank you.

Thank you. Once again, ladies and gentlemen, if you would like to ask a question at this time, please press star followed by one on your touch-tone phone.

And at this time, we have no other questions. I would like to turn the call back over to Sam Pazuki.

Thank you, operator. Just a couple points of clarification as well. I mean, part of the mining unit costs at Hale is related to moving water around and also rehandling the PAG waste. So as we get the SDRS permit, as we look at opportunities to reduce the amount of PAG material that we generate, either through the RC drill program or as Davida just mentioned, the reclassification of some of the yellow PAG material, that should drive some of the unit costs down from a rehandling perspective. So this is some of the work that is ongoing as part of the technical review and to evaluate our full costs. And, again, we'll come out with a new mine plan within the first half of next year. So there are no other questions. That concludes the webcast and the conference call. A replay will be available on our website later today. So on behalf of Scott and the rest of the management team, thank you for joining us today and wishing you a pleasant rest of the day. Bye for now.

Thank you. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.