A low
grade, refractory ore gold mine with high striping ratio such as at Macraes is
always challenged in ways to improve margins. Common practice approaches used at
OceanaGold Ltd Macraes are to maximise grade delivery, optimise recovery and
reduce unit costs, as well as take any opportunities to incorporate new
technologies and implement enhanced commercial strategies.

The Business Improvement
(BI) programme was implemented across the Macraes operations in late 2003 and is
being rolled-out to all other parts of the business. The core focus of BI at OGL
is to:

increase revenue,

reduce cost,
and

improve
processes.

A dedicated BI team
comprising of a manager, team leaders and business analysts were engaged to
identify and manage a series of opportunities to reduce operating expenses,
optimise capital outlays and generate extra revenue. The Business Improvement
Programme, though in its formative phase, has begun a cultural change within the
organisation. Many people are starting to challenge the way they do things and
are looking for ways to continually improve business performance.

The BI team encompasses
individuals from different departments who can offer the diverse skill set
necessary to produce intended results. The current team is made up of a BI
manager, BI Team Leaders in Mining and Processing and analysts from Mining,
Processing, Commercial and Plant Maintenance workgroups. A team member has
recently been formally trained as a Six Sigma Black Belt.
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The BI's team role is to
assist in the establishment of project management processes for each improvement
idea. In addition the team will assist in tracking implementation, identifying
and unblocking restrictions and limitations as well as setting up metrics to
quantify the level of benefit returned and sustained.

From a more strategic point
of view, the BI team is advancing the Business Improvement capability of the
company by developing long term Communication and Training strategies. These
strategies will set the direction of BI initiatives in the years to come to:

educate the OGL workforce
in basic BI techniques,

assist the OGL workforce in
applying basic BI techniques,

communication the direction
of BI in OGL, and

close the information feedback
loop to facilitate transparent communication between the OGL workforce and the
BI team.