- OceanaGold has revised its mine plan for Didipio - Brokers see this a key de-risking event - The market is ascribing no value to the project

By Greg Peel

OceanaGold's ((OGC)) core mining operations are centred in New Zealand, but the company's exciting prospect for expansion comes in the form of its Didipio project in the Philippines. OGC has recently been revising its mine plan for Didipio, and brokers are enthusiastic about the changes.

Originally the open cut mine at Didipio was planned to run for 6 years and then the underground stage for 14 years to provide a 20-year mine life. Now, however, the plan is to run the open cut for 16 years and commence the underground from year eight for 6 years, reducing the total mine life from 20 to 16 years.

While this might sound like a downgrade, an expanded open pit supports increased mining rates and faster access to higher grade ore, Citi notes. OGC has upgraded the value of its reserves through higher gold and copper price assumptions, and has also increased its gold production forecast by 45% to 100koz per annum from 70kozpa. Furthermore, the processing plant capacity will be increased to 3.5Mtpa from 2.5Mtpa.