WA IHI NORTH PROJ ECT ECONOMI C IMPACTS For New Zealand consenting purposes only. Forward looking information must not be relied on for investment purposes. 1 1. Introduction Oceana Gold New Zealand Limited (OGNZL) has commissioned this report from Sense Partners Limited, a boutique economic consultancy. The purpose of this work is to establish the economic impact of an expansion and extension proposal for the gold mine in Waihi. The project is called the Waihi North Project (WNP). WNP will be transformational for the region. The project will come with $626m of additional capital investment, to unlock $3.4b of additional silver and gold exports, over 300 additional well-paid jobs directly at the mine, over 1000 additional indirect jobs among suppliers and wider economy, and lengthen mine life by 6 years to 2036. The additional GDP contribution per year is equivalent to 37% of Hauraki District’s GDP in 2019. Local expenditure on suppliers and wages will average $65m a year during the production phase (which is enabled if resource consent is granted), compared to $395m of wages paid to all jobs in the Hauraki District in 2021. Remediation efforts will see further employment and investment over 2037 and 2038. These investments will come following the Covid-19 disruption and increased economic uncertainty from rising global inflation and rising interest rates. Economic risks are heightened. WNP represents a very significant and long duration investment programme in capital and people in the Hauraki district and surrounds. We can summarise the economic impact of the mine extension as follows: • National: WNP will increase Waihi mine’s contribution for the current life of the mine to 2030, and extend its economic life by an additional 6 years to 2036: o Mining activity at Waihi contributed $103m (or 0.03%) to national GDP ($306b) in 2019. We do not report 2020 data here, which was severely affected by the Covid19 pandemic and Waihi mine activity reduced in line with depleted reserves at the Correnso mine in 2020. Economic contribution will gradually ease as current consented activities (Martha Underground) run their course. WNP will add $269m additional GDP per year over our 13 year assessment period to 2036. o WNP would more than double production volumes and exports of gold and silver from current planned activity. Assuming US$1,500/oz price of gold and NZD/USD averaging 0.71, average exports will increase above current projections by around $265m a year over 13 years. We have assumed a conservative gold price – the futures curve for gold is US$1,923 from the May 2022 to December 2027 contracts. If futures prices are a guide, export revenue would increase to $340m a year. o We estimate royalties paid would increase from $3m a year from current operations (averaged over 2019 to 2030) by an additional $8m a year with the inclusion of WNP (2024 to 2036), in addition to generating taxes on well-paid jobs and corporate profits. o The project will boost employment by around 357 additional FTE over the production period. The mine is highly productive, meaning each job adds more to
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