Orezone releases West Africa mine expansion plan
Orezone Gold Corp. [TSXV-ORE] has released the results of a Phase 11 Expansion and life-of-mine study from its 90%-owned Bombore gold project in Burkina Faso, West Africa.
Bombore achieved commercial production of the Phase one oxide plant in December 2022. It has operated successfully above nameplate, producing 76,783 ounces of gold at an all-in-sustaining cost (AISC) of US$1,006 an ounce sold in the first half of 2023.
The company said a planned expansion at Bombore from a processing rate of 5.9 million tonnes annually to 10.3 million tonnes will deliver a significant increase in gold production at a low incremental capital cost.
Orezone shares moved lower on the news, easing 2.2% or $0.02 to 90 cents. The shares are trading in a 52-week range of $1.64 and 80 cents.
The expansion study envisages construction of a new standalone 4.4 million tonne per-year hard rock processing facility, allowing Bombore to produce an average of 209,000 ounces of gold annually at an AISC of US$1,121 per ounce. The capital cost of the plant is pegged at $167.5 million, with the first gold pour scheduled for the third quarter of 2025.
The study envisages a mine life of 11.3 years with total gold production of 2.1 million ounces.
Production in the first three years after the expansion is expected to average 231,000 ounces annually.
The Phase 11 expansion is expected to create several hundred new employment opportunities during construction on top of the 2,400 direct local jobs that currently support the existing operations.
“Once complete, the expansion will also create further long-term local employment and promote further investment in community programs and livelihood restoration projects that aim to improve the lives of local residents while providing a larger source of tax and royalty revenue for Burkino Faso,’’ the company said.
Meanwhile, with the continued support of our senior lender, Coris Bank International, the company expects to finance the construction of the hard rock plant using a combination of debt and free cash flow from current operations.
Bombore is situated 85 kilometres east of the capital city of Ouagadougou and is accessible via a paved international highway.
The project hosts a large oxide resource underlain by a larger, open sulphide resource, and the plan has been to develop the site in two stages to reduce project costs. Bombore achieved the first gold pour scheduled for the third quarter of 2022.
Orezone was recently in the news when it entered into a silver streaming agreement with Euro Ressources SA to sell 50% of the future payable silver production from the Bombore mine.
Euro is a French company whose main assets are a royalty on Iamgold Corp.’s [TSX-IMG, NYSE-IAG] Rosebel God Mine production in Suriname, and a royalty on the Paul Isnard concessions in French Guiana, which are owned under a joint venture agreement between Orea Mining Corp. [TSX-OREA, OTCQX-OREAF] and Nord Gold SE.