OceanaGold Files for Injunction to Protect Production at Didipio

- July 4th, 2019

OceanaGold has filed an injunction to protect its Didipio asset in the Philippines as the local government attempts to restrain all operations.

OceanaGold (TSX:OGC,ASX:OGC,OTC Pink:OCANF) has filed an injunction in order to maintain production at its Didipio asset in the Philippines after the governor of Nueva Vizcaya told local government to restrain all operations pertaining to the miner. 

The gold producer reported on Thursday (July 4) that a local government unit prevented a large supply truck from accessing Didipio on the basis of the governor’s orders. 

“This injunction is sought in response to an order from the Governor of Nueva Vizcaya directing local government units to ‘restrain any operations’ of the company,” the miner said in a press release.

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OceanaGold added that it has decided to prevent escalation by halting truck movements, including those that are moving copper concentrates. However, operations at the mine will continue as normal for the time being.

Despite the inconvenience of having to put a halt in place, OceanaGold assured that it will not prevent the supply of copper concentrate for shipment, or of light vehicles, people and food supplies, from accessing the mine.

Late last week, the gold miner released a statement denying the rumors that production at Didipio had been halted and that the government of Nueva Vizcaya ordered the stoppage of operations due to its financial and technical assistance agreement (FTAA) expiring at the end of June.

In fact, the company noted that it put forth an application to renew the FTAA with the Philippines government in March, and received confirmation on June 20 that the company would be able to continue with operations until the FTAA renewal.

According to a Reuters report, Philippines’ industry regulator, the Mines and Geosciences Bureau (MGB), confirmed that OceanaGold was given approval to continue with mining operations at Didipio while the renewal of its license remains pending and under review.

“Until and unless the office of the President says it’s not renewed because you are not compliant, then this operation of OceanaGold will continue on a temporary basis,” MGB Director Wilfredo Moncano stated.

The Didipio asset produced 115,000 ounces of gold and 15,000 tonnes of copper last year and the miner has set a target for 2019 of total gold production to be approximately 500,000 to 550,000 ounces and copper output to total around 14,000 to 15,000 tonnes.

The hearing date to address the injunction has been scheduled for July 10. As of 11:24 a.m. EDT on Thursday, OceanaGold was trading at C$3.40.

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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article. 

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