OceanaGold Lays Out a Self-Funded Path From 500,000 Ounces Toward 650,000

OceanaGold spent this KE Report update describing a plan that its own cash flow pays for. Brian Martin, the company's senior vice president of business development and investor relations, walked through 2026 guidance, a tripled dividend, and an acquisition that adds a fifth asset — all backed, he says, by $655 million of cash and no debt.

## 2026: more ounces, lower expected costs

The company guides to 520,000–590,000 ounces of gold for 2026, about 12% more than it produced in 2025 at the midpoint. Martin attributes the growth to waste-stripping campaigns — removing waste rock to reach higher-grade ore — run at Haile and Macraes in 2025, which are now feeding richer material to the mills.

Haile is the largest producer in the portfolio this year, and Martin says its grade profile drives a production jump expected in the fourth quarter. Didipio and Waihi are described as steady and on track for guidance. Macraes over-delivered: Martin says it produced 64% of the midpoint of full-year guidance in the first half, with output set to ease back toward plan in the second half.

The host cited second-quarter AISC (All-In Sustaining Cost — what it really costs to produce an ounce) of $2,151 against an average selling price of $4,433. Martin expects costs to fall in the second half largely because more ounces come out. He acknowledges headwinds — higher oil prices and rising interest rates in the United States — but argues a margin near 50% leaves room to absorb them.

## Cash flow and shareholder returns

Martin puts first-half free cash flow at roughly $380 million and cites consensus near $700–800 million for the full year. On his estimate of about a $6 billion market cap, that works out to what he calls a 10–12% free cash flow yield — free cash flow divided by market value, a measure of how much cash the business generates per dollar of stock.

The board approved up to $430 million of capital returns this year: a tripling of the dividend to 9 cents per share and a $350 million buyback. The balance sheet has also shifted — Martin recalls about $200 million of debt and $100 million of cash not long ago, versus $655 million of cash and no debt today.

## The organic growth queue

Two projects carry the medium term. At Macraes, a mine that started in 1990 with a seven-year life and now carries a six-year reserve life, the company has applied for permits for Macraes Phase 4, which would extend mining into the late 2030s. Martin says a larger ore body, referred to as Southern Pit, could enter the mine plan around 2032, and updated reserves are due this year.

At Waihi, the Waihi North project pairs a mill expansion with a new underground mine. Martin cites a resource grade of 17 grams per tonne — 9 to 10 grams once diluted into reserves — against roughly 3.5 grams per tonne in today's mill feed, with potential for 200,000 ounces a year. Underground development is said to be on plan, with an analyst tour planned for early next year. He frames first contribution as 2030–32.

## AusGold and the Katanning project

The gap before Waihi North contributes is what drove the deal. In August, OceanaGold agreed to buy Australia-listed AusGold for just under $550 million, with AusGold holders receiving roughly 6–8% of the combined company on closing, expected in December pending a shareholder vote and regulatory approvals.

The asset is Katanning, an open-pit gold project about three hours from Perth that Martin describes as technically straightforward — a conventional open pit using CIL (carbon-in-leach, a standard method for recovering gold from processed ore) — with lower capital intensity than a typical mine build. He expects construction around 2028 and a ramp-up toward 100,000 ounces a year or more starting in 2029, with accelerated drilling and updated study work planned for the first half of next year.

Sequenced together, Martin sketches roughly 500,000 ounces a year from the existing four assets, plus Katanning's 100,000 from 2029, plus Waihi North from 2031–32 — a runway toward about 650,000 ounces a year. He concedes that converting all of it into reserves still takes work.

## How the cash gets split

Martin describes a balanced capital allocation framework of roughly four equal buckets: reinvestment in the existing operations and fleet; growth funding — Waihi North, the Palomino and Leadbetter underground projects at Haile, Katanning, and exploration; building cash; and shareholder returns. He expects the growth bucket to expand now that Katanning is in the mix. On M&A, his framing is plain: there are only two ways to add production, buy it or drill it, and the company wants to be good at both — though integrating AusGold comes before anything larger. The company stays active in early-stage joint ventures but says it prefers owning assets outright.

## The pitch, in his words

Asked why investors should look at OceanaGold, Martin keeps it modest: a 10–12% free cash flow yield, cheap pricing on cash-flow multiples, assets in jurisdictions he rates well — Australia, New Zealand, the United States, and the Philippines, which he calls the smallest contributor — and what he calls a preference for being boring: delivering on expectations. His case is meaningful exposure to the gold price without a single large construction bet. The company is expanding mines it already runs and building one comparatively small project, and the sequence — he argues — is what makes the growth credible.