OceanaGold Corp (OGC) 2016 Q3 法說會逐字稿

Good morning, or good afternoon, ladies and gentlemen, and welcome to the OceanaGold Q3 2016 Results Webcast and Conference Call. (Operator instructions) This call is being recorded on October 27, 2016, at 5:00 p.m. Eastern Standard Time. I would now like to turn the conference over to Mr. Jeff Sansom. Please go ahead.

Hello everybody, and welcome to the OceanaGold Third Quarter 2016 Financial and Operating Results Call and Webcast. Thank you for joining us today.

My name is Jeffrey Sansom, Analyst, Investor Relations at OceanaGold. On the call with me today are Michael Holmes, Chief Operating Officer; and Edward Sit Woon, Corporate Controller. Joining us from New Zealand is Mark Chamberlain, Chief Financial Officer, and from Vancouver is Darren Klinck, Executive Vice President, Corporate Development. Mick Wilkes, President and CEO, is unable to join the webcast and sends his regrets.

For those who wish to ask questions, we'll be taking them through telephone only, and following the conclusion of the formal presentation.

Before we proceed, note that all references in the presentation that you are about to hear adhere to International Financial Reporting Standards, and all financial figures are denominated in US 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.

I will now turn it over to Michael Holmes, to begin the main portion of the presentation.

Thank you, Jeff. Good morning, good afternoon, all, and thank you for joining us today to discuss our operational and financial performance over the quarter ending 30th September 2016.

Before I start, I would like to pay our respect to James Denham Shale, a long-serving Board member who unexpectedly passed away on Monday. Denham has been a pillar of strength for OceanaGold, where he served as a Non-Executive Director since February 2004, and in 2007 following the merger of Oceana and Climax, was appointed as the Lead Non-Executive Director.

Denham was also a practicing lawyer, who was previously the Chair of New Zealand's leading law firm, Kensington Swan Lawyers. Over the past 25 years, Denham has been on the board of numerous Australian and New Zealand companies, including Autogold Limited, Turner's Auctions, Limited, and is the immediate past president and a Distinguished Fellow of the Institute of Directors in New Zealand.

Denham embodied our corporate values, and was a significant contributor to the successes of our company over his many years of tenure. On behalf of the Company, we offer our deepest condolences and prayers to his wife Jillian and his children, Karla, Paul and Veronica, during this difficult time.

We move on to the key highlights. Quarter 3 has been another strong quarter for OceanaGold, and we've had a solid nine months of strong production from our assets with costs generally in line with expectations and strong cash flows from our operations.

Haile continues to progress well, and we remain on schedule and budget. We have commenced commissioning activities in the plant, as well as within the crushing circuit, where we now are crushing rock and conveying rock.

We have completed the PAG Cell Phase 2, and the TSF, which is no small feat -- for those of you who have visited the area, the TSF is around about 540 acres, a fully-engineered and lined pond, which was a critical [path] item for much of the year.

We are currently mining in the pit in a steady state from mill zone at approximately 60,000 tonnes of material a day, and we have stockpiled approximately 350,000 tonnes of oxide ore, about 93,000 tonnes of sulfide ore. So, Haile is progressing well, and still on track for first rock through the mill at the end of the year, and first gold produced in quarter 1.

The other growth areas, for Didipio underground, is progressing also very well, and we are currently about 1,950 meters down the decline. We've also, through the process of additional information and additional drilling, have enhanced the underground design and we're expected to reduce the life of mine operating our sustaining CapEx by around about $30 million by the way in which we can have a look at the stope sizing in some of the areas that were believed to be of poorer quality ground.

Exploration successes continue at all our sites, Haile, Waihi and Macraes, and this quarter we released the underground PEA and we have commenced the Haile optimization study.

As we -- moving forward with the strong financials, which you can see there with regards to the gold sales of 98,195 ounces and copper sales of 5,596 tonnes, the revenue $150 million, and EBITDA of $62 million, and a net profit of $31 million for the quarter. Our year-to-date results show good gold production at 314,000 ounces, and the copper production of 17,358 tonnes, with an all-in sustaining cost of $730 per ounce.

On to the next slide, we continue to work collaboratively with -- sorry, the focus on safety. As mentioned in the last quarterly report for the quarter, we did tragically have an underground fatality where one of our operators at the Waihi mine was fatally injured when his loader went over an open stope. Immediately following the accident, the operation was suspended for seven days out of respect and to commence the investigation. That investigation remains ongoing.

The safety performance has continued to improve over the years, as shown, however, there's always, always room for improvement and we will work with all of our employees to work towards creating a workplace where all of our employees can go home without harm safely every day.

We are not there, yet, but we are steadfast in our safety commitment and we will keep working towards achieving this.

On to the next slide, we are continually working collaboratively with the regulatory bodies in the Philippines to advance responsible mining within the country. As you are well aware of, there has been a lot of activity in the Philippines, and I'd like to provide a little bit more color around the information that we have received following the DENR Audit.

So, on October the 17th, the Company received the official DENR Audit Report. The Audit Report contained findings and recommendations that were consistent with those that were identified and discussed with the audit team, on-site at the audit closeout meeting. These findings contained zero environmental or legislative violations. The majority of the recommendations related to further IEC, which is Information, Education, and Communication program, and enhancing that. The audit team acknowledged and recognized the government requires -- recommends the government intervention continues with the need to address the illegal small-scale miners. And the audit report also highlights that Didipio enjoys a strong ongoing community support for the mine.

So, following that, we have submitted our formal response to the DENR on the 24th of October, and we are very detailing, I suppose, the actions from the findings and the recommendations, of which the majority of those were put in place following the audit closeout meeting that we had following the orders.

So, we're working with the government, and we're very confident in a near-time resolution with regards to this process.

Additionally, it's also worth noting that after the audit, the Company was nominated for the third straight year for the 2016 Presidential Award for the Most Environmentally Responsible award, which we were the recipient of in 2015.

The next slide, looking at our year-to-date consolidated performance, year-to-date as we mentioned, it has been a strong nine months. Operation of the company's consolidated growth has grown 6% to approximately 314,000 ounces with the growth in Didipio and Waihi, partially offset by the softer production at Macraes, and Reefton being put on care and maintenance.

Financially, our revenue has increased 32%, EBITDA has increased 59% and net profits increased 209%. The increase in net profits is primarily related to the increased sales, the improved, realized gold price, the increase of 7%, partially offset by the increases in [D&A] and the copper price received, which has decreased 7%.

Our all-in sustaining costs have continued to decrease since 2013, by 16% to $730 per ounce.

Now, if we move on to Haile, and discuss the exciting project there and the progress that we're making. So, the picture there shows the mill zone pit, and the haul road, and the commissioning of the crusher and the crushed rock that you see there behind that, underneath the conveyor.

So, today we are tracking on schedule and on budget as mentioned. We have currently spent $316 million out of the $380 million, with approximately $349 million spent and committed. Construction of the TSF is completed as mentioned, significant achievement for this item, and as mentioned, has been a critical path item for much of the year. The civil works, structural infrastructure and mechanical infrastructure milestones have also been completed, and the focus now is on the piping infrastructure, electrical infrastructure, and continuing with the mine. We are on track, as mentioned, for our major milestones, with first ore through the mill at the end of this year and commencing commercial production in 2017, early 2017.

Going to the next slide, with regard to the process plant there, it's progressing well. We are focusing on the installation of the piping, electrical and instrumentation infrastructure. We have installed all the steel, the tanks, mechanical equipment and energization and commissioning works are commencing.

With regards to the processing plant, as mentioned, the crusher and conveying circuit including the emergency stockpile have been constructed, and we've currently crushed upward of about 21,000 tonnes of rock. So, the commissioning there is going exceptionally well.

So the grinding process, in the next slide, the grinding mills, the mills have been fully lined and we're working towards energizing the grinding circuit in mid-November. So, significant works and significant activities have been completed. So, the mining there, it's a good shot of the mill zone pit, which is our number one pit. We're now mining, as mentioned, sulfide ore, and have already stockpiled around about 93,000 tonnes of stockpiled ore, and we are currently mining at a mining rate of 60,000 tonnes per day. In addition to that, I mentioned the 350,000 tonnes of oxide ore for future processing, and we've also commissioned an additional -- larger trucks, three trucks, 785's there, to assist in the process as well.

A lovely picture on the next slide of the TSF. 540 acres, so about 87 MCGs, for people that want to know what the size of it is. So, the construction of that is [complete], of a fully-lined TSF facility. So, we're -- the process there now is the regulators being on-site, and we're going through the final process of gaining approval for usage of the TSF. So, that has been one of our critical items that has progressed exceptionally well.

Moving on to operational performance for the quarter, for Didipio in quarter 3, it was a softer quarter for us than the first two quarters, and that is as expected, and as previously forecast. The softer production quarter is in relation to mining the lower-grade ore as we mine our final stage, stage 6 of the open pit.

During the quarter, we made three shipments of concentrate for a total sales volume of 32,500 ounces. Copper was much the same, and the production for the quarter was softer than quarter 2 as expected and previously forecasted.

The all-in sustaining cost was at $273 per ounce sold, and cash costs were at $39 per ounce sold. We continue to track well against our full-year cost and production guidance, as we expect to mine the higher grades as we enter into the high-grade zone of stage 6 in the open pit. On track there, and as previously forecast. It's good.

For the operation, operating statistics, during the quarter we mined less waste and more ore, so as we're finalizing the remainder of the last stage, the increase in ore was mined due to the increase in [pre-strip] activities that we completed in quarter 2, 2016, opening up the lower-grade ore of stage 6.

The processing of the ore decreased quarter-on-quarter due to some scheduling plant maintenance as well as processing the harder ore. Gold and copper grades were down quarter-on-quarter, and as mentioned, that's just generally due to the position of the mine as we mine through the lower-grade areas in stage 6.

In quarter 4, we have scheduled plant upgrades including an upgrade of the cyclone [nets] as well as installation of a concentrate weighing system, so we're expecting, I suppose, the throughput to be down for the fourth quarter due to the prolonged maintenance shut. But, we also expect the grades to increase, in the fourth quarter as we move into the higher-grade areas of the stage 6. So, expecting the guidance to be met there for Didipio.

As we look at the Didipio underground, sorry, so for the open pit there, the next one expected completion in late 2017, and at the completion of the open pit we will have 24 million tonnes of ore stockpiled on the surface ready to be blended with the underground ore, which will be coming out in late 2017. So, the underground will start off with a milling mining rate of 1 million tonnes per annum for the first three years, and then post-2020 we'll get up to a mining rate of 1.6 million tonnes when we open up the second panel.

So, as mentioned currently, the decline is approximately 1.9 kilometers down, and it's approximately at a depth of 265 meters down, vertically down from the portal. We've completed the raise bore in the first primary shaft through the quarter and we're in the process of reaming the second primary -- the second exhaust shaft. We've awarded the [tenders] for the supply of the [pace filled] plant with construction to begin during the second quarter of 2017.

So, as mentioned following the review of the design stage, we are continuing to upgrade and redefine and look for improvements, and part of that improvement is looking at the way in which we're taking the stopes out in some of the previously-thought-of weak rock, and we've managed to improve our life-of-mine capital expenditure by reducing it by $30 million. We're also starting an exploration program underground, where if you have a look at the diagram to the right-hand side, you see the two red trouser legs coming down. So, we've started the drilling program to do some in-field drilling, or some expiration drilling at depth, as well as we have started to do some in-field resource reserve drilling in the ore body as well. So, those programs have started in quarter 3.

Moving on to Waihi, as expected and previously forecasted, the gold production for the quarter was softer than compared to quarter 2, and that's resulted from a lower mine head grade from the Correnso vein. Our year-to-date all-in sustaining costs were $726 per ounce sold, and cash cost at $487 per ounce.

In quarter 4, we expect the production to increase and we expect that to be higher than quarter 2 and quarter 3, and we remain on track at Waihi to achieve our full-year cost and production guidance.

The operational statistics, mined and milled were basically broadly in line with quarter 2, however, we mined less waste. And as mentioned, we are expecting the high grades in quarter 4, as we continue to develop access into the Daybreak, Empire, and Christina veins.

At Waihi, we continue with our exploration program with three surface rigs and four underground rigs. In quarter 3, drilling focused on resource reserve conversion of Correnso, Empire and Daybreak, and potential extensions of the Martha vein system. Explorations continues to test the resource potential of major lodes, linking veins, and stockwork zones beneath the current open pit, and continues to deliver encouraging intercepts as reported in the September exploration update.

Looking forward to quarter 4, we continued drilling beneath the open pit, and we expect to commence drilling at WKP, the regional drilling in quarter 4 this year. So, a good program there of 34,000 meters of drilling planned for 2016 and year-to-date we have completed 26,000 meters.

For Macraes and Reefton quarter 3, as mentioned, Reefton has been put on care and maintenance, and remains on care and maintenance. At Macraes in quarter 3, we produced 40,182 ounces in the third quarter. The quarter-on-quarter increase was primarily due to improved head grades and high recoveries. On an all-in basis, costs were at $1,138 per ounce sold, and cash costs at $861 per ounce sold. Here again, we remain on track to achieve full-year cost and production guidance for Macraes.

For the key operating statistics, at Coronation, we achieved a lower than expected [strip] ratio allowing us to mine more ore and less waste. The mill feed for the quarter was at 1.5 million tonnes, which was broadly in line with the previous quarter. The head grade was at 0.99 grams per tonne due to the higher grades mine from underground operation, and the increased tonnage from the open pit. Looking forward to the final quarter, we expect the production to be similar to that of quarter 3.

Additionally, we are currently in the process of the permitting of Coronation North, and our expectation is to start mining in the Coronation North in the first half of 2017.

Looking at Macraes exploration, it's an exploration on 35 km of strike, so it's a very I suppose, underdeveloped and highly potential field. 30,000 meters of drilling planned in 2016, for the program, and as released in the September exploration update, we've discovered some high-grade mineralization to the north of Coronation North, approximately 10 kilometers from the Macraes Plant, called Nunns. So, for quarter 4 we expect to follow up on the Nunns, as well as continuing our focus on Coronation to the eastern side of the [load], Coronation North, Frasers Underground, and also targeting Mareburn and Lot's Wife.

Thank you, Michael. I'll now turn the next portion of the webcast to Chief Financial Officer Mark Chamberlain, who will run through the financial results.

Thanks for that, Jeff. Looking at slide 25, total liquidity at the end of the third quarter was $145 million, which comprised cash of $88 million and the undrawn revolving credit facility of $57 million. This liquidity together with internal cash flow is more than sufficient to complete Haile and leave us with a healthy liquidity buffer at the end of 2016.

Total debt at the end of the third quarter stood at $298 million. We have a corporate facility, revolving facility, of $300 million, drawn to $243 million. We also had equipment leases of $55 million. That's a bit of a jump from the previous quarter, and represents that we've completed our program at the [sale the] leaseback of [yellows] at Haile and Macraes, which was designed to provide us with some incremental liquidity.

Moving to slide 26, this highlights the solid third-quarter performance Michael earlier described. Revenue of $150 million, EBITDA of $62 million, and net profit of $31 million. Gold sales were down, $127 million compared to $147 million, whereas copper sales were reasonably consistent at $27 million compared to $28 million in the second quarter.

As forecasted, Q3 was slightly softer due to mine sequencing impacting on grades, and that resulted in lower gold production. As mentioned, we're expecting higher production in the fourth quarter at Didipio and Waihi, with Macraes to be similar to Q3 production.

Slide 27 sets out the consolidated financial results table. There's no surprises here. Just looking at the year-to-date results, the gold price received is $84 higher so far compared to what we were seeing in 2015, and the copper price received is $0.17 lower.

Net interest and finance costs are only marginally higher than they were in 2015. Although we are borrowing more, we have reduced the margin on the facilities. Income tax expense of some $13.4 million is primarily associated with Waihi. There is also an unrealized loss on designated hedges of $11.3 million, and that relates to the New Zealand Dollar Gold [colors of] the Macraes production which is offset by the gain on the oil hedges, executed at the start of the year. This leads to a very healthy net profit of year-to-date of $94 million compared to $30 million and contributing to this as being the demonstrated success of the Waihi acquisition.

Moving to slide 28, [setting out] cash flows, the cash flow for the quarter was down at $29 million compared to $91 million in the second quarter. As you'll see in the note there, the operating cash flows before working capital movements, however, were $61 million compared to $74 million in the second quarter, which reflects the slightly lower gold production. What we're seeing here is basically a large increase in receivables, primarily on the copper-concentrated Didipio. There was a large amount of stock at the [Porthon] mine at the end of Q3 which was cleared shortly after. But, with 10,000-tonne shipments of concentrate taking place, this means we'll continue to see volatility in the cash flows.

CapEx was $115 million for the quarter. As you can see below, the big contributors to this were Haile development, $77 million, the Didipio underground at $18 million, and exploration across the group at some $7.5 million.

I'll hand it back now to Michael to wrap up this presentation.

Thank you, Mark. So, for the remainder of 2016, the Oceana Group, for Haile we continue to -- on track to complete the construction and ramp up commissioning with first ore through the mill by the end of the year. For the operations, as mentioned, Didipio is expected to be higher on the third quarter on better grades, offset by the lower mill feed. Waihi production expected higher in quarter 3 than in quarter 3 from the better grades. And, Macraes production is similar to quarter 3.

And from our growth activities and the focus we have there, is ongoing exploration activities, a continued advancement of the Didipio Underground which is progressing very well, and the continued advancement of the organic growth studies.

So in summary, ladies and gentlemen, thank you very much. We are focused to continue the 2016 guidance and to fully maintain that, based on a solid nine months performance year to date, as well as the focuses we have on our construction operation and growth areas. So, thank you very much.

Thank you, Michael. At this time, we will open the lines to take questions. For those of you seeking to ask questions, we'll be taking them through the telephone only. We will now pause for a few moments while we wait for callers to queue, and I will turn the call over to the operator to assist with facilitating this process.

Thank you. (Operator instructions) Your first question comes from Michael Slifirski from Credit Suisse. Michael, please go ahead.

Thanks. A couple of strategic questions, a couple of operational ones. The operational ones, first if I may please, first of all, Didipio throughput. You're talking about it being lower this quarter but it was already pretty low in the quarter just completed. Has anything changed in terms of your expectation with respect to sustainable throughput? Wilkes had talked about sort of high 3s numbers as being an aspiration, and you seem to have fallen away from that. Is there any sort of surprise in the ore hardness that that might change it? Was there something in the quarter that was just a little bit anomalous?

Thank you, Michael. No, there's nothing, there's no real changes, and the mill is actually progressing very well. There was some maintenance work that was completed. What has some impact, some slight impact from the ongoing hardness of the ore, so that will come through transit as we take the stockpiling material down. But the high 3s is still I think aspirational and achievable. We have an extended maintenance period in quarter 4, so the throughput will be lower than the previous quarters, and that's to -- supposed to enhance the throughput ability. So, this [life line] exchange will enable the recirculating load through the mills to be reduced, and that should then assist with the throughput going forward.

Okay, thank you. Certainly with respect to Macraes recovery, really nice to see that 86%. Is that simply Reefton no longer being in the mix, or is there something again about where you're currently mining that gives you that 86%? I guess the question is, how sustainable is that, when you look forward, please?

We're expecting I suppose similar figures going forward. There is always the complication of the changeover of material, even though we [batch fed]. You still have the ramping up and the ramping down of the material changes, so having a consistent feed coming through from the open pit and underground should assist that recovery, yes.

Okay, thank you. And then, the sort of more strategic ones -- El Salvador, what are you thinking about that? What's your stance now? Is there an option to continue with seeking a mining solution, or do you abandon it as too challenging?

Look, I think, Mike, with El Salvador, the arbitration really was disappointing, however, we respect it. I suppose we haven't made the decisions about the next moves with respect to our business in El Salvador at the current time, because we're currently reviewing the arbitration outcome in detail. But, for us, it's the continuing business that we have over there as usual, with the group that we have there and the community support that we are giving.

We will continue, I suppose, to work with the El Salvador government on the belief, our belief, and their belief, I think, that there's enormous opportunities from a modern mining, modern resource industry in El Salvador. And so, we will, I suppose for us at the moment it's just a sit back and consider what the outcome means, and then what our next steps will be.

Okay, thank you. And then finally, with respect to the Philippines, where do you sit with respect to the exploration there, with that license that was granted and then taken away? Is it back, and how do you then think strategically as to what you put into the country, given the extraordinary gyrations that you've seen over the last month or so from open pits being evil, and now mining being sort of acceptable again? How do you make an investment decision as to what you put into exploration, and what exploration opportunities are actually there now compared to what your thoughts were just a couple months ago?

I suppose we've always seen the Philippines as an enormous opportunity, and it's one of our world-class leading operations. We've never lost our exploration and our export license. With regards to working with the government, I think the government is focused and it's always been part of the 10-point plan to have a sustainable, responsible industry within the Philippines. And so, we're working quite closely with the regulatory bodies, and we have a good understanding originally with the regulatory bodies there on what we have to do.

We have been granted the exploration licenses, and we have had our community programs approved, and so we will be starting exploration activities within the areas that have been approved.

Okay. Thanks, thanks, [Holmesy].

Thank you. Your next question comes from Jeff Killeen from CIBC. Jeff, please go ahead.

Good morning, afternoon, thanks for your time. Just wanted to start with Macraes. First of all, just wondering, 145,000, 150,000 ounces a year for this year, is that the type of level that we can expect rolling into next year?

We haven't -- Jeff, we haven't provided guidance at the moment, but with the -- next year, we're sort of targeting the production from Coronation North which is going through the [consenting] process at the moment, as well as continued performance out of Frasers as well.

Okay, very well. Then on just thinking about the capital spending for this year, particularly in New Zealand, it seems as though the capital spend through the first three quarters is really approaching what the number that had been guided towards earlier in the year. So, should we expect a slowdown in capital spending in New Zealand for the balance of the year, or is that number maybe going to gravitate higher than original?

Sorry, just was that for exploration, or was that just capital in general?

No, just capital in general, total capital spend.

No, it's as per -- it's as per guidance, Jeff, so continuing on as we [come and go].

Okay, very well, then shifting to Didipio, the $30 million in savings here you're noting in sustaining cap, would we think of that as being just small amounts on an annualized basis? Will it be chunky towards the front, towards the back? Can you maybe elaborate on that a little bit?

Yes, sure. It'll be over the life of the mine, Jeff, and it will be dependent on, I suppose, the areas that were identified that previously were identified as mining with smaller stopes. So, with some additional geotechnical drilling as well as the performance of the area, the [bridges] in the open pit in stage 5, we've been managed to upgrade the design. So, that will be over the life of the mine, that $30 million worth of savings.

Okay, very well, and then lastly from me, you're getting close to the final stages at Haile. So, are you getting a better sense, and are you able to give us some context for what you can see for a ramp-up period, from when the ore first hits the mill to sort of hitting a steady state? The time frame you're thinking there?

Well, from the ore -- the first ore through the mills at the end of the year, and then the commissioning period, I suppose it will depend on currently where we are. But, we're hoping that it's going to be a similar ramp-up to Didipio.

Okay, very well. That's it for me, thank you.

We'll utilize, I suppose, with that we're utilizing the expertise that we have done at Didipio as well as building a commissioning team with people from -- the Didipio commissioning as well.

Okay, very well. Thank you for your time.

Thank you. Your next question comes from Chris Thompson from Raymond James. Chris, please go ahead.

Good morning, good afternoon, guys. Just a couple of quick questions, here. We'll start off with Haile, and you mentioned that obviously you're stockpiling sulfide and oxide ore right now. Can you give us a sense of the grade that that stockpile is at right now?

Currently it's still quite low grade. It's the transitional material at the top, so we're looking at sort of the 1s to 1-1/2. As we get further down into the [mill zone], we'll be getting into the high grade areas. So, we'll preferentially, I suppose, through the commissioning period, select the ore that we put through so that we're not losing too much of the material, and we'll be conditioning -- commissioning it similar to Didipio. And then, as we go in through commissioning, then we'll get into the high-grade material.

All right, and can you comment on grade reconciliation against your block model right now?

No, I can't.

Okay, just moving on very quickly, Didipio. You know, you mentioned that you're in the process of stage 6 right now. Can you give us a sense of quarter-by-quarter for next year, whether this is going to be in a consistent grade, or is going to be a level of variation?

At the moment we're still, I suppose, working through the budget, so that hasn't been finalized. It will be a combination through the year of the higher-grade ore coming out from stage 6 as well as the stockpiled material. And then, as we go into 2017, it will be continued to be the feed from the stage 6 material plus Underground, plus the stockpile material.

All right then, great, and then just finally, just I guess onto Macraes here, can you give us a sense for the quarter, percentage that came from the open pit versus percentage from the Underground? Tonnes?

From the --?

Phrases, phrases in the open pit in Macraes, just a percentage mill feed?

I know, Chris, I should have that off the top of my head, but we'll get back to you on that one, Chris.

Okay, no worries. Just I guess just to reiterate, I think an answer to a previous question about the recoveries there, would you say that 86% is sustainable?

I'd say, I'd say between what we've achieved and 86% would be sustainable going forward, yes.

All right. Okay, guys. Thanks.

Thank you. (Operator instructions) Your next question comes from David Medilek from Macquarie, please go ahead.

Great, thank you, guys. I have three quick questions. The first question, just following up on the Didipio potential life of mine savings of $30 million, in terms of the larger stope sizes driving CapEx savings, is this driven by increased sub-level spacing, or are there other elements that are pushing the cost savings as well?

It's purely driven by the access, and the -- and some of the services and infrastructure that goes into it as (inaudible) as well.

Okay, right. And bigger picture, still on Didipio, the scheduled maintenance for the fourth quarter, how long is that envisaged to be?

The extended shut, we're currently predicting that to be around 12 days at the moment, and we'll just see how that, how we manage through that process.

Right, thank you. And at Haile, I believe there were roughly 400 RC holes planned to confirm the upper part of their resource. Has that been completed, and can you comment how that's reconciling with the resource model?

I think we're just going through that reconciliation process at the moment, David, and we're collating that information, so it's hard to comment at this point in time, with certainty, what that might be.

Okay, great. Thanks, thanks for answering those questions.

(Operator instructions) There are no further questions at this time. Please proceed.

That concludes the presentation for today. On behalf of the team at OceanaGold, I'd like to thank you for your interest and participation, and should you have any further questions, please don't hesitate to contact me directly. Thank you.

Ladies and gentlemen, this concludes your conference call today. We thank you for participating, and ask that you please disconnect your lines.