OceanaGold Corp

TSX:OGC

Q2-2025 Earnings Call

[Operator]

Good morning, ladies and gentlemen. Welcome to OceanaGold Corporation Q2 2025 Earnings Conference Call. [Operator Instructions] This call is being recorded on Thursday, August 7, 2025. I would now like to turn the conference over to Haley Mayers. Please go ahead.

[Haley Mayers, executive]

Thank you. Good morning, everyone, and welcome to OceanaGold's Second Quarter 2025 Operating and Financial Results Webcast and Conference Call. I'm Haley Mayers, Vice President of Investor Relations. We are joined today by Gerard Bond, President and Chief Executive Officer; Marius van Niekerk, Chief Financial Officer; Bhuvanesh Malhotra, Chief Technical and Projects Officer; and Peter Sharpe, Chief Operating Officer, Asia Pacific.

The presentation that we'll be referencing during the conference call is available through the webcast and on our website. I would also like to remind everyone that our presentation will be followed by a Q&A session. As we will be making forward-looking statements during the call, please refer to the cautionary notes during the presentation, news release and MD&A as well as the risk factors set out in our annual information form. All dollar amounts discussed in this conference call are in U.S. dollars. I'll now turn the call over to Gerard for opening remarks.

[Gerard Bond, executive]

Thank you, Haley, and good morning, everyone. I'm really pleased with our strong performance this quarter with our continued solid execution, keeping us well positioned to deliver on our full year guidance. Most importantly, the second quarter was another safe quarter for OceanaGold. Our key safety programs have helped keep our people safe, which remains the #1 priority within our business every single day.

We achieved a solid production and cost performance in line with our full year guidance. This drove record net profit, record earnings per share and strong free cash flow which were all well ahead of market expectations.

As a fully unhedged gold producer with no gold price hedges or prepay agreements, we also continue to benefit from substantial upside in today's favorable gold price environment. Most of the gain in record average realized gold price was converted to free cash flow, where we delivered yet another strong quarter of $120 million. This has resulted in a distinctly high free cash flow yield of 18% on a trailing 12-month basis, which I'll speak to later in a later slide.

We have a strong balance sheet with 0 debt and increased our cash position by 31% from last quarter, finishing the quarter with approximately $300 million in cash. Open pit waste stripping investment is advancing as planned at Haile, Ledbetter 3 and Macraes Innes Mills 8, setting us up for both a strong fourth quarter this year and a strong 2026 as we unlock access to the next ore phases at our 2 largest sites.

During the quarter, we also made significant progress on our organic growth opportunities. Our permitting application for the Waihi North project in New Zealand is advancing through the process, and we continue to expect approval by the end of this year. And for those of you who may have missed it, the Fraser Institute's recently released Investment Attractiveness Index for global mining recorded a step change improvement by New Zealand and the Philippines as places for mining companies to invest and operate in. Specifically, New Zealand has moved up to 12th place out of 82 jurisdictions, which puts it above every state in Australia, up from 43rd position last year. The Philippines has risen to 16th from 72nd. This is testimony to the improvement in government policy and support of the mining industry in those 2 countries, which is appreciated by us and our shareholders given our growth options in both countries.

Consistent with our disciplined capital allocation framework, I'm pleased to note that we were able to continue to fund our growth and exploration projects, maintain a very strong balance sheet, pay a dividend at our recently increased level and on top of this, continue to make share repurchases during the quarter. And we expect to continue to do so throughout the remainder of this year and beyond with our recently renewed and expanded buyback program.

We continue to advance towards our goal of listing on the New York Stock Exchange in the first half of 2026, having now completed the share consolidation during the quarter. We're of the view that the New York Stock Exchange listing will provide enhanced trading liquidity and access to a wider range of potential investors, both of which will benefit existing OceanaGold shareholders.

Widening the lens, I want to highlight just how well we are generating a return on capital. Over the last 12 months, we've delivered $401 million of free cash flow which represents a free cash flow yield of approximately 18% on our average market capitalization over the same period. And our rolling 12-month return on capital employed has continued its upward trajectory this quarter, sitting at 15% over the last 12 months. Both of these metrics reflect that we are converting the strong gold price to the bottom line, generating strong returns and deploying capital effectively. Both these ratios compare very favorably to our peers and show the value in our stock.

Looking forward, we remain well on track to meet our 2025 full year guidance. On a year-to-date basis, our consolidated gold production is around the midpoint of our guidance range, while our AISC performance is tracking towards the lower end of our guidance range. In the second half of the year, we continue to expect strong performance across all sites with a particularly strong fourth quarter from both Haile and Macraes. Total capital investment is expected to be in line with guidance. Sustaining capital is expected to be higher in the second half of the year, mainly relating to open pit stripping and infrastructure investment.

In summary, we are pleased with the strong performance in the first half of 2025. And looking forward, we remain confident and well positioned to achieve our full year guidance for production, cost and CapEx. I'll now turn the call over to Marius, who will discuss our financial results in more detail.

[Marius van Niekerk, executive]

Thank you, Gerard, and good morning, everyone. During the quarter, our strong operational performance generated a record revenue of $432 million, supported by a record average realized gold price of just under $3,300 per ounce. I'm very pleased to report that we had some more notable achievements this quarter, including a record net profit of $118 million and a record EPS of $0.49 with adjusted EPS at $0.51.

We also achieved a strong free cash flow of $120 million and EBITDA of $217 million and an operating cash flow per share of $0.99, which were all second highest on record. In the first half, we've generated $189 million of free cash flow, ending the period with 0 debt while increasing our cash balance to $299 million.

These results highlight our keen focus on maintaining strong margins and continuing to focus on shareholder value. With our increasingly robust financial position, we have the flexibility to continue to fund our exciting organic growth opportunities and return capital to our shareholders. We will do this via our recently increased dividend and our active share buyback program.

Over the past few years, we've solidified our financial position, systematically applying our growing free cash flow to reduce debt and build a robust and resilient balance sheet. In addition to maintaining our quarterly dividend, we bought back $21 million of shares in the second quarter at an average price equivalent to CAD 17.52 per share, bringing total buybacks to $41 million year-to-date.

With $100 million in share buybacks approved for 2025, we expect to buy back an additional $59 million of shares by year-end. Together with the recently increased dividend, we're demonstrating our clear commitment to delivering capital returns to our shareholders while keeping our balance sheet strong and funding our growth projects. I'll now pass it over to Bhuvanesh to discuss Haile's performance.

[Bhuvanesh Malhotra, executive]

Thank you, Marius, and hello, everyone. We achieved strong second quarter gold production at Haile of around 48,000 ounces. Production was stronger than planned due to greater proportion of higher grade Ledbetter Phase 2 ore being processed during the quarter. We are expecting a higher proportion of lower-grade stockpile material to be processed in Q3 before we return to fresh ore from Ledbetter Phase 3 in quarter 4, with fourth quarter production levels expected to be similar to the first quarter, positioning us well to achieve our full year guidance.

Second quarter all-in sustaining cost was $1,890 per ounce, which was below the annual guidance range. We maintain our all-in sustaining outlook for the year as we expect cost to trend upward in the third quarter, in line with peak stripping and sustaining capital investment before decreasing in the fourth quarter when we have access to Ledbetter Phase 3 ore.

Ledbetter Phase 4 trade-off study work continues to progress well. We expect to release an updated NI 43-101 technical report in early 2026, with the result of this work which will define our path forward for this attractive opportunity. We also remain excited about the exploration opportunities ahead. Drilling continued in the fourth -- in the quarter at both at Horseshoe Underground and at the new Pisces discovery, and we'll continue to explore this and other surface targets throughout the remainder of 2025.

I will now turn the call over to Peter to discuss the Asia Pacific operations.

[Peter Sharpe, executive]

Thank you, Bhuvanesh, and good morning, everyone. Didipio delivered increased gold production of approximately 25,000 ounces and copper production of 3,700 tonnes. With good progress made year-to-date on underground dewatering and increasing ore tonnes mined from underground, we expect to meet our full year guidance. We continue to expect capital returns to increase in the second half of the year as we invest to support our growth with planned investment in underground pumping infrastructure, ongoing lift to the tailings storage facility and growth capital in support of the underground optimization.

These investments in growth position us well to maximize our future opportunities. We're also making good progress and remain on track to reach our targeted underground mining rate of 2.5 million tonnes per annum by the end of 2026. We plan to release an updated technical report in the first half of 2026, outlining this plan. We remain excited about our exploration opportunities, both near the mine and regionally, with ongoing drilling at multiple targets planned to continue throughout the remainder of the year.

We have been drilling at True Blue this quarter and are now back drilling at Napartan, both of which [indiscernible] exploration opportunities.

This quarter, Macraes delivered improved gold production of 30,000 ounces. Our stripping efforts were predominantly concentrated on open pit waste mining at Innes Mills 8, which resulted in a higher proportion of lower-grade stockpiles being processed during the quarter. I'm especially pleased with the improvement in gold recoveries in the quarter, which reflect the impact of our continuous improvement initiatives driven by our processing plant employees at Macraes.

As we move through the year, we expect Innes Mills 8 to deliver access to higher-grade ore for the fourth quarter and drive a strong finish to the year for production and costs, positioning us well to meet our guidance. We remain very excited about our potential opportunities to unlock value at Macraes. We are continuing to evaluate the many options we have to extend the mine life given today's high gold price environment by leveraging the value of its industry-leading low mining unit costs and expect to share more with the market early next year on this potential.

Waihi delivered strong production of just over 17,000 ounces of gold in the quarter, maintaining the progress achieved with the underground improvement plan initiated in the first half of 2024. This marks the third consecutive quarter of stronger performance at Waihi, which is a testament to all the hard work done by the team there, and this is really great to see.

I'll now hand it over to Bhuvanesh to talk about the Waihi North Project.

[Bhuvanesh Malhotra, executive]

Thank you, Peter. Our Fast-track application for the Waihi North Project progressed in the quarter. Our expectation remains that we will be permitted by year-end and we will be able to start the underground decline towards Wharekirauponga in 2026. Early work activities continue to progress to plan with the award of the services trench contract, work on the expanded water treatment plant and additional detailed design work occurring this quarter.

We are on track to spend our guided $45 million this year so that the project is ready to start in earnest when we receive that approval. During the quarter, we also announced an extension of the strike at the high-grade Wharekirauponga deposit, which continues to demonstrate its upside potential. As part of our Fast-track application, we are also seeking approval to increase the number of drill sites and double the number of drill rigs, enhancing our flexibility and accelerating efforts to define this exciting deposit.

Further exploration drilling at Waihi is focused on resource recognition, expansion of the Martha underground and expansion of the Wharekirauponga deposits. With improved underground performance at Martha underground and solid progress on permitting at Waihi North, we remain very excited about Waihi's future. I will now turn the call back to Gerard.

[Gerard Bond, executive]

Thank you, Peter, and thank you, Bhuvanesh. With our results, we also announced some management changes. Firstly, I'm pleased to announce the appointment of Keenan Jennings as our new Chief Exploration Officer, who will be succeeding Craig Feebrey at the end of September this year. Keenan brings over 35 years of global experience in mineral exploration and executive leadership, having held senior exploration roles at BHP, Rio Tinto and Anglo American and having delivered some major discoveries in that time. Keenan succeeds Craig Feebrey following Craig's decision to retire at the end of September. Craig has been with OceanaGold for almost 10 years and in that time has led a dedicated and successful team, establishing a long track record of adding reserve ounces at an industry-leading low cost per ounce. We thank Craig for his tremendous contribution to our company, his leadership and his contribution to our culture, and we wish him all the very best in his well-earned retirement.

We also announced that Peter Sharpe, Chief Operating Officer, Asia Pacific, is leaving OceanaGold at the end of September to pursue opportunities outside of the gold industry. I've worked with Peter for many years, including prior to OceanaGold and have always valued and respected his care for people, drive for performance and high integrity. I thank him for his outstanding contribution to OceanaGold being an effective and popular leader. He'll be missed by many, including myself, but I wish him all the very best in the next chapter of his career. Peter's departure has allowed us to create a single Chief Operating Officer role. This role will be filled by Bhuvanesh Malhotra, our current Chief Technical and Projects Officer, who is already responsible for Haile.

Bhuvanesh has been with the company since early 2024 and has over 25 years of experience in operational and technical roles across multiple commodities and mining methods. He has shown that he's capable of driving safety performance, operational excellence and sustainable transformational change. He's very well positioned to do a great job in this role as our new Chief Operating Officer. So congratulations to Keenan and Bhuvanesh. And again, I thank Peter and Craig for their outstanding contribution to our company and wish them both the very best in the future.

In summary, this was yet another strong quarter for OceanaGold. We safely and responsibly delivered record net profit, record earnings per share and substantial free cash flow. We are well on track to meet our full year guidance and are laying the groundwork this year for continued strong production growth in 2026. Our balance sheet is in excellent shape with $300 million in cash and no debt. We have no gold hedges, no gold prepays, ensuring we fully benefit from this high gold price environment. And we remain focused on our disciplined capital allocation strategy, being able to internally fund our growth projects and exploration, increase our dividend and continue returning capital to shareholders through our share buyback program.

All of this is possible through the dedicated efforts of the many tremendous people who work at OceanaGold and a big call out of thanks to them for all of that. I'll now turn the call over to the operator and open up the line to take any questions.

[Operator]

[Operator Instructions] Our first question comes from the line of Ovais Habib with Scotiabank.

[Ovais Habib, analyst]

Congrats to you and your team on a solid quarter and really great to see Haile continuing to outperform. Gerard, a couple of questions for me. Number one, just sticking with Haile. Haile had a good quarter despite all the stripping that you're doing at Ledbetter. Is the stripping still on track? And how should we be looking at Q3? And just second part to that is, do you still have some high-grade stockpiles on site that you could process into Q3 as well?

[Gerard Bond, executive]

Yes. Thanks, Ovais. It was a great quarter, and we're really pleased with it. Haile had a good quarter, as you noticed. As Bhuvanesh said, he -- this was powered by the grade that we were able to process from Ledbetter 2 in the quarter. To your question, the stripping is on track. And -- but Q3, we expect to be the least strong quarter of the year because we will primarily be relying on lower grade stockpiles.

The stripping, as I said, is on track, and we gain access to Ledbetter Stage 3 in the fourth quarter, and that's why we also expect the fourth quarter of the year to be our strongest quarter of the year at Haile. So Haile, again, to shape it, we said that it's on track to meet its full year guidance. It's well on track at the halfway mark of the year. The fourth quarter will be the strongest, which means the third quarter will be the softest.

[Ovais Habib, analyst]

Got it. And just moving to Didipio. Looking into Q2, ore mine grade, pretty much everything all improved quarter-over-quarter. Are the underground water issues you were facing at Didipio in Q1 kind of behind us?

[Peter Sharpe, executive]

Yes. Thanks, Ovais. I might take that. So look, the work that we're doing on the underground dewatering is progressing really well. We're looking at it in 2 phases, which is really the immediate work and pumping out the decline and getting back down into those lower levels. That plan had a schedule completing that work by around September. So we're on schedule, if not slightly in front.

But then in addition, in parallel, we're also looking at future-proofing what additional pumping capacity we need to have installed, what infrastructure, what additional security around the crown pillar, what about backup high-voltage supply buried so that we have a little bit more protection. All of that work is progressing really well as well. So we're in a really good position heading into the next wet season.

[Ovais Habib, analyst]

Excellent. And Peter, thanks for all your help over the past couple of years and really wishing you all the best in your next chapter. Congrats again, on a great quarter.

[Operator]

And your next question comes from the line of Fahad Tariq with Jefferies.

[Fahad Tariq, analyst]

Continuing on the theme of Haile, just looking at the mining costs underground, it looks like they declined 9% quarter-over-quarter, which is good. And then in the MD&A, you mentioned that there's a continued focus on underground operational improvements. Can you maybe expand on how you're getting the lower costs and what kind of improvements are being achieved?

[Gerard Bond, executive]

Sure, Bhuvanesh, you want to take that?

[Bhuvanesh Malhotra, executive]

Yes. So yes, you're right, the underground cost is primarily driven by the productivity benefits that we have been making significant inroads into. We also had access to some high-grade stopes that probably have been the reason for the underground cost per tonne being down.

And the reason for the additional improvements that we've been talking about is to progress the decline further so that we can have access to multiple levels and multiple drives. So that provides us with more flexibility and access the high-grade stopes.

[Operator]

And your next question comes from the line of Don DeMarco with National Bank.

[Don DeMarco, analyst]

So just a couple of questions on Didipio. I saw the increased ore tonnes underground on improved access in the lower level. Is this expected to continue? And with this, with the higher underground rates, is there opportunity to reach maybe 2.5 million tonnes per year processing earlier than the end of 2026?

[Peter Sharpe, executive]

Don, so yes, I mean, the plan is that we -- by the end of 2026, we're actually exiting 2026 at a 2.5 million tonne mining rate. So that is the plan. And yes, what you're seeing in this quarter is improvement and a continuation of getting access to lower levels. So it actually gives us more flexibility, opens up more mining areas. So we do expect that over Q3 and Q4, we will continue to see the mining rate lift. So it is an indicator of obviously, the plan that is being executed.

[Don DeMarco, analyst]

Okay. That's good. And the buybacks have been fairly robust. Are you -- what about the dividend? Are you comfortable with the level that the dividend is at right now?

[Gerard Bond, executive]

Thanks, Tom. I mean, in short, yes, we are. Just a reminder, we did double it for the year as we announced in February. So that was the last time we made that decision, but it remains an ongoing choice for the Board as we continue to perform so profitably and have such a strong balance sheet.

[Don DeMarco, analyst]

Congratulations on the strong quarter and good luck with the rest of Q3.

[Operator]

And your next question comes from the line of Harrison Reynolds with RBC Capital Markets.

[Harrison Reynolds, analyst]

Congratulations on another great quarter, Oceana team and a great first half of the year. Just to kind of follow up on Don's question a little bit. Wondering if you can give us your views on what you're seeing in the M&A market and how you're viewing those opportunities against your view of your own share price and the ongoing buybacks.

[Gerard Bond, executive]

Yes. Thanks, Harrison. Look, I mean, our position hasn't changed at all, I would say, the last 18, 24 months. I mean, we have a tremendous organic growth profile in front of us and really in our industry, a relatively low-risk organic growth profile because it typically relates to stripping open pits or developing near existing process plant ore bodies such as Wharekirauponga, which is world-class, as you know. So we don't feel we have the compulsion to do so, but we have a very small team who go scanning to see if there are opportunities to add assets into our portfolio that could add value.

So we don't have an imperative to do so, but we scan. We are very focused on making sure that anything is going to add value to OceanaGold shareholders rather than other shareholders. And again, in this market in this time, it's -- those things can be harder to find at elevated prices. But we are open along the value chain.

And we -- in the quarter, you may have seen that we entered into an early-stage farming agreement with a group called Headwater in Northern Nevada, a couple of tenements there that we've gained access to through a farming process that could, again, subject to exploration, give us a new mining front there. So we continue to invest in exploration as well at all of our sites. We have some tremendous land packages that we'll continue to invest in. But M&A is one avenue of growth. We look, but we haven't found anything yet, obviously, because we haven't actioned anything.

[Harrison Reynolds, analyst]

Congratulations again. It's great to see another great quarter in the books for Oceana.

[Operator]

[Operator Instructions] Your next question comes from the line of Simon Chiu with CIBC.

[Cosmos Chiu, analyst]

Gerard, it's Simon here. It's actually Cosmos. So maybe my first question is on the Ledbetter Phase 3. Good to hear that the pre-stripping is going well. But maybe if we can talk about any precautions that you're taking as we sort of enter into peak hurricane season in that area of the U.S.

[Bhuvanesh Malhotra, executive]

Look Cosmos...

[Gerard Bond, executive]

I'll have a go, Bhuvanesh, and then you can fill out anything else. I mean I think the site has shown over recent years that it has become far, far more weather resilient than, say, what existed 6 years ago. So we've had hurricanes in recent years, and we have not skipped a beat. There was a big hurricane, I think, last year. And I think everything proceed -- continued without interruption.

Now obviously, people's safety is what comes first, and we make sure that our people are not in harm. But through all the works that have been done, grading, drainage, general resilience works, we haven't been in any way impacted as you might be alluding to with that question. Bhuvanesh, anything else that I haven't covered?

[Bhuvanesh Malhotra, executive]

No, you covered it well. Thanks, Chiu.

[Cosmos Chiu, analyst]

I'm just wondering if you factor any kind of buffer into your schedule? Or is that not needed?

[Gerard Bond, executive]

Look, Cos, we -- I mean, one of the bits of buffer we have now is an underground mine. You're kind of a bit more weather resilient than if you're solely [ rely ] on open pits. And -- but secondly, just to reminder that Ledbetter 3 is a big cutback, right? And we're not going to be in this pit hopping phases that we have been in recent years. Once we get access to Ledbetter 3, we're into it with good access to higher-grade ore for an extended period of time. And I think the combination of good access to a larger cutback plus the underground makes us a bit more grade resilient than the mine has been in its history.

[Cosmos Chiu, analyst]

Yes. And Gerard, that leads in well into my next question here. I see that for Ledbetter Phase 4 you're still undergoing the study in terms of should this be open pit or underground. And that sort of study should come out early 2026. Can you remind us some of the cost and benefits between open pit and underground? What are your considerations? And if Ledbetter Phase 4 does become underground into the future, Haile, would this be a majority underground sort of operation? Or how does it look?

[Gerard Bond, executive]

I will -- given I interrupted him last time in his answer, I'll let Bhuvanesh lead off with the answer.

[Bhuvanesh Malhotra, executive]

Thanks, Gerard. Cosmos, there are many advantages that comes with the underground, but the trade-off study has to navigate through those challenges and those pros and cons as well. I think the first one, obviously, is the access to the ore. The open pit means that the access to the ore is going to be probably in 30s, whereas the access to the underground could be early as we are doing the design work of that outcome as well.

And the second obvious advantage is the tailings [ tonne ]. As you can imagine, the amount of material that would need to basically go to the tailings [ tonne ] as well, which comes at a very high cost whereas with underground, we would have the opportunity to probably not take some of those tonnes as well. And remember, the high-grade portion of that material is probably deeper than what it is at the surface as well. So there are many other associated advantages as well but those are the 2 primary ones, which will probably shape one way or the other.

[Cosmos Chiu, analyst]

Great. Maybe switching gears a little bit here in terms of the guidance. You kind of talked about this earlier during the conversation but putting some numbers to it, your CapEx budget for the year is $485 million to $530 million. I believe you spent about $211 million so far.

So 2 questions. Number one, where is the heavier spending going to be? Is it the stripping? Or is it the Waihi North that we had talked about? Maybe if you can kind of summarize it for me? And the second question is all-in sustaining costs. As you mentioned, it is tracking to the lower end of full year guidance so far in the first half. Is that in part due to the lower CapEx that's been spent year-to-date?

[Gerard Bond, executive]

Yes. Thanks, Cos. I mean the stripping expenditures at both Maces and Haile is substantial in the third quarter, and you'll see that lift the stripping CapEx, but also lift the all-in sustaining cost because that's where it goes. And you'll also notice in the numbers that Didipio is probably the -- in terms of a run rate year-to-date, the largest underspender of its full year capital guidance, which we expected to spend. And a lot of that is going to be in relation to the work that Peter mentioned in his commentary about once we get -- now that as and when we get planned access to the lower depths of the underground mine, rehab works, additional pumping capacity to make that weatherproof in the future and other associated works to make the mine more resilient and also achieve its pathway to 2.5 million tonnes per annum. So that is what's going to -- the 2 primary drivers of the uptick in the second half.

[Cosmos Chiu, analyst]

Great. And then the all-in sustaining cost, I guess, the answer is yes, that -- in part, it's trending to the lower end of full year guidance because of the lower CapEx so far.

[Gerard Bond, executive]

Yes, correct. And that's why we maintain the guidance, and you should particularly, the fourth quarter should be a good quarter, but the third quarter will be a soft quarter because you're going to have the lowest denominator as well in terms of sales. Yes.

[Cosmos Chiu, analyst]

And then one last question. Gerard, great to see the strong balance sheet. Great to see the strong free cash flow and great to see a good quarter, and that's being now reflected in the share price up almost 12% at [ 11% ] now. But with the increase in the share price, does that impact your share buyback in any way? It doesn't sound like it, but I just want to make sure the higher share price, more expensive paper, does that impact your plans in terms of your share buybacks?

[Gerard Bond, executive]

Look, ultimately, we do have an eye to value when we buy, but value can be looked at through multiple lenses, right? So we -- a lot of that value depends on which gold price assumptions that people use. But again, I point to those free cash flow yields and the return on capital. We still, relative to peers are undervalued. It's a good and preferred means of returning capital to shareholders. We've had great success with it to date. And yes, we still intend to do so. But yes, we are mindful of value when we do so.

[Cosmos Chiu, analyst]

All the best, Peter. And Congratulations, Bhuvanesh.

[Operator]

And your next question comes from the line of Jeremy Hoy with Canaccord Genuity.

[Jeremy Hoy, analyst]

A couple of quick ones for me. I'm thinking about the potential catalysts beyond just strong quarterly prints which are great to see. The Macraes study or you said you would inform the market or provide some more info on the opportunities to unlock more value at Macraes early next year. Does that come in the form of a new study?

[Gerard Bond, executive]

Yes, new technical report. Correct.

[Jeremy Hoy, analyst]

Okay. Got it. And what can we expect for exploration results out of Haile going forward? Because it does seem that there were some pretty compelling opportunities there.

[Gerard Bond, executive]

Look, I mean, we -- Jeremy, great question. We drill -- we drill through the year. And when we get some meaningful results, we'll share them with the market. I mean I think you see we're on a pretty consistent drumbeat every 2 months or so. And yes, as soon as we can package some meaningful results together, we'll release those to the market. But we're active in drilling at every site and getting some really promising early results, which again, subject to assays.

[Jeremy Hoy, analyst]

Yes. Great to see the strike expanding at WKP.

[Operator]

And I'm showing no further questions over the phone lines. I'll hand it over to Haley to read some online questions.

[Haley Mayers, executive]

Thank you. The first one is on Didipio. Could you explain why gold sales have lagged gold production in the quarter and year-to-date? And will this reverse in the second half?

[Gerard Bond, executive]

I might hand that to Marius because it's a results call and he hasn't had a question given to him yet, he's feeling unloved. Marius?

[Marius van Niekerk, executive]

Yes. Just on the question, if it will reverse, that is, yes, we typically have some inventory at the port, and it's purely timing related.

[Haley Mayers, executive]

Great. Thank you. There's another one here. Can you comment on media reports that you're currently involved in a sales process in Australia?

[Gerard Bond, executive]

Look, I mean, yes, I'm aware of that media speculation. Look, we -- as a standard statement, we're not going to comment on specific speculation. But I can say that the company is not involved in any sales process at this point in time.

[Haley Mayers, executive]

And last year, could you please give some color as to where the exploration is focused and what you expect in the second half across the group?

[Gerard Bond, executive]

Well, look, I mean, our guidance mapped it out by site. And the largest area of expenditure is in relation to Wharekirauponga underground because it's our primary longer-dated higher grade, world-class ore body that we're putting money into. That's probably a bit over half of the exploration budget -- but we do spend at all sites, both near mine and also a little more regionally.

And again, we've put more money into Macraes than we have in recent years. We have -- as someone alluded to with an earlier question, we've had some great results at Haile and likewise, even inside of Martha underground at Waihi.

So at Didipio, I think as Peter mentioned, both near mine, True Blue, D’'Fox and Napartan, we're actually drilling at 2 of those 3 sites. And again, really excited about what we have across the portfolio in the exploration sense. And we will continue to invest in exploration because it's a great source of value generation.

And again, just to call out Craig's track record of success, I think we've added resource -- reserve ounces at an average cost of $50 per ounce over the last 12 years.

[Haley Mayers, executive]

Great. Thank you. That's it from the web questions.

[Gerard Bond, executive]

And that concludes our webcast and conference call. So a big thanks to everyone for joining and a bigger thanks to those at OceanaGold that made such a stellar set of results. A replay will be available on our website later today. Thanks, everyone.

[Operator]

Thank you, presenters. And ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.