OceanaGold Corporation M&A announcement

Please go ahead. Hello, and welcome to OceanaGold's conference call and webcast to discuss the exciting acquisition of Ausgold Limited.

I'm Brian Martin, Senior Vice President of Business Development and Investor Relations. I'm joined today by Gerard Bond, President and Chief Executive Officer, Bhuvanesh Malhotra, Chief Operating Officer, and Keenan Jennings, Chief Exploration Officer. The presentation we will be referencing is available through the webcast and on our website, and we will take questions following the presentation. As we will be making forward-looking statements during the call, please refer to the cautionary notes included in this presentation. All dollar amounts discussed are in USD unless otherwise stated. I'll now turn the call over to Gerard for opening remarks.

Thank you, Brian. Good morning, everyone, and good evening to those joining us from Australia. Today, we announce some exciting news that OceanaGold has agreed to acquire Ausgold Limited, owner of the Katanning Gold Project in Western Australia, for $549 million. This transaction will add to our existing growth profile with the addition of a high-quality fifth asset to our portfolio in one of the world's premier mining jurisdictions. In line with our growth strategy, we scan for opportunities at the right point of their life cycle for us to be able to add value, and Katanning is exactly the kind of asset we have been looking for. It is a conventional, relatively low capital, open pit development project with the potential for more than 100,000 ounces of gold production annually over an initial 10-year mine life, with first gold expected in 2029.

It also comes with district scale exploration upside, providing a growth platform to continue to add value for many years to come. Building, commissioning, and operating mines are core OceanaGold capabilities. We believe that we can leverage the substantial expertise of our existing technical and projects team to realize Katanning's full potential. What's also important is that we are doing this transaction from a position of financial strength. We have a strong balance sheet with $655 million in cash. We're debt-free, and we have a good equity valuation multiple. That financial strength puts us in a great position to complete the transaction, fund the development of Katanning, continue advancing all of our existing organic growth projects, including the Waihi North project, and still invest significantly in exploration and still be able to return capital to shareholders.

Lastly, Katanning is expected to be accretive for OceanaGold shareholders, providing attractive returns across a number of key per share metrics in line with our strategy of creating value. Katanning is a natural addition to OceanaGold's portfolio. This slide shows our assets with Katanning included, a diversified portfolio of five assets, all in top mining jurisdictions. We already have a substantial office in Brisbane with a team that has deep Australian technical project development, planning, permitting, and exploration expertise, which is a real advantage as we seek to leverage that to advance Katanning. Both Bhuvanesh and Keenan, along with our existing technical team, are based here in Brisbane. I would also stress that Western Australia sits inside OceanaGold's existing operating day. Turning to the next slide, the transaction summary.

This is a lower risk transaction for OceanaGold, with a total transaction equity value of $549 million, and Ausgold shareholders owning approximately 6%-8% of OceanaGold post-closing. OceanaGold is acquiring 100% of the issued and outstanding shares of Ausgold by way of a court-approved scheme of arrangement. Ausgold shareholders will receive shares in OceanaGold with an option to receive the transaction consideration in cash, subject to a cash cap of $137 million. The scheme is unanimously recommended by the Ausgold board, who, together with major Ausgold shareholder, Dundee Corporation, own approximately 9.1% and intend to vote all shares held by them in favor of the scheme. Finally, the scheme is subject to customary conditions, and we expect it to complete in December 2026.

To further demonstrate our financial strength, this slide shows our current cash balance at the halfway point of the year, consensus free cash flow estimates over the remainder of this year and in the coming three years, and our current buyback commitments and current dividend levels. Together, this provides total projected cash holdings of approximately $2.1 billion at the end of 2029. It provides us substantial capital to fund the potential cash component of the transaction and the Katanning capital expenditures, whilst being able to continue to invest in growth and exploration projects across our business and continue to return capital to shareholders. I will now hand over to Bhuvanesh, who will provide a brief overview of the project.

Thank you, Gerard, and hello, everyone. As you have heard, Katanning is a well-advanced, technically straightforward, and relatively low capital open pit project in a tier 1 region, which is what makes it so compelling. Katanning is located around 275 kilometers southeast of Perth in a region with well-established infrastructure, power and road access, and a skilled workforce. A deep labor, contractor, and services market exists in Western Australia, which will support the construction and operation of the mine. Work done by Ausgold to date indicates the potential for more than 100,000 ounces of gold produced annually over an initial 10-year mine life. The processing plant, which needs to be built, is designed with a conventional carbon-in-leach circuit. Other site-based infrastructure required includes an accommodation village in the town of Katanning, which is under construction now. Offices, workshops, stores, water treatment, and tailings.

Katanning project is well advanced, and Ausgold has made real progress on three fronts. One, permitting, which is currently under public review following authorization by the Western Australian Environmental Protection Authority, a key step in the overall permitting process. Mining leases are already in place over the entire development footprint. Two, pre-development activities, where early works agreement have been executed. Detailed engineering and long lead procurement is advancing, and the 250-room accommodation village is currently under construction. And three, significant drilling is underway through a multi-rig drill campaign, which is focused on infill drilling and resource conversion in areas planned for initial stages of mining. OceanaGold aims to keep up the momentum across all three of these fronts while incorporating learnings from our due diligence process and our team's operating and development experience. This slide sets out OceanaGold's indicative work plan for Katanning.

The key to highlight here is that we are acquiring the project ahead of development, allowing us some time to optimize the project and de-risk the operational ramp-up. We will provide a more fulsome project update following close of the transaction expected in December this year. OceanaGold will conduct further development activities throughout 2027 and look to publish an NI 43-101 technical report in 2028. We are targeting a final investment decision and construction to commence in 2028, ahead of the first gold in 2029. Thank you, and I'll now pass the call over to Keenan.

Thank you, Bhuvanesh, and hello, everyone. As mentioned by both Gerard and Bhuvanesh, what's attractive about Katanning is the asset's multifaceted growth potential. Success through exploration remains core to how we create value at OceanaGold, and our track record speaks for itself. Our teams have consistently delivered exceptional returns through exploration across our existing asset base, and we believe we can deliver tremendous value through the drill bit at Katanning as well. Mineralization at Katanning appears over a 17-kilometer strike trend with significant potential to both convert and grow resources. Drilling in the central zone, shown here, is focused on areas planned for initial stages of mining. A 54,000-meter drill campaign is currently underway with near-term exploration focused on conversion and infill drilling, which will support mine planning and de-risk the production profile.

As shown, the deposits remain open down dip below the current pit shell, which points to further optionality and exploration upside. Recent drilling has returned good gold intercepts beyond the current resource areas. Finally, the acquisition of Ausgold brings with it significant greenfield potential via its large landholding of more than 3,000 square kilometers in a rather underexplored greenstone belt. The work Ausgold has done to date in identifying exploration targets signals exciting potential for future regional satellite deposits within a 100-kilometer radius from the proposed plant. These are three regional trends shown here on the map running parallel to the known Katanning Shear. The Stanley Shear is a 20-kilometer-long structural corridor, approximately 30 kilometers from Katanning, where initial drilling includes 8.5 meters at 33 grams per ton gold. The Nanicup-Zinger Belt, 40 kilometers from Katanning, has shown gold mineralization over a 4-kilometer strike length.

And finally, at Kraken-Yandina, some 90 kilometers from Katanning, results have shown strong soil geochemistry anomalies, and results from initial drilling are pending. These three areas of growth potential together make Katanning an incredibly exciting project from a prospectivity perspective. Back to you, Gerard. Thanks, Keenan.