Orezone arranges $35 million bought deal financing
Orezone Gold Corp. [ORE-TSXV] has announced $35 million bought deal offering with proceeds earmarked for the acceleration of both the Stage 11 hard rock expansion and additional exploration at its Bombore gold mine in Burkina Faso, West Africa.
The company said an underwriter has agreed to purchase, on a bought deal basis, 42.7 million shares priced at 82 cents per share. In addition, the underwriter has been granted an option to acquire an additional 6.4 million common shares at the offering price to cover overallotments, if any, a move that could generate up to $5.25 million. That option can be exercised at any time prior to the date that is 30 days after closing, which is expected to occur by March 13, 2025.
Orezone shares were active on the news, easing 7.8% or $0.07 to 83cents. The shares trade in a 52-week range of 92 cents and 58 cents.
Bombore is the company’s key asset. Gold production in the fourth quarter totaled 36,502 ounces, a 37% increase quarter-over-quarter, with annual production of 118,746 ounces exceeding the mid-point of 2024 guidance of 110,000 to 125,000 ounces. Investors were guided to anticipate an all-in-sustaining cost of US$1,400 to US$1,475 an ounce.
The Bombore mine achieved commercial production on its oxide operations in December, 2022, and is now focused on its staged hard rock expansion that is expected to materially increase annual and life-of-mine gold production from the processing of hard rock mineral reserves.
In its latest update, Orezone said it plans to accelerate Stage 11 of the Bombore hard rock expansion by two years to achieve an optimized gold production profile of 220,000-250,000 ounces a year by late 2026. Subject to final board approval, the Stage 11 hard rock expansion would commence in the second half of 2025 and follow the current Stage 1 expansion, which is scheduled to achieve first gold in the fourth quarter of 2025. Stage 1 is expected to increase gold production to 170,000-185,000 ounces in 2026.
The company said it is also planning an expanded exploration program designed to accelerate exploration of multiple higher-grade centers of mineralization, and to illustrate the broader size and scale of the Bombore mineralized system. With a current stated mineral reserve of 2.4 million ounces at an average pit depth of less than 40 metres, the company sees significant exploration upside at Bombore.
Meanwhile, the company plans to dual list on the Australian Securities Exchange to further enhance the company’s capital markets profile through access to an incremental pool of institutional investors, including specialist mining-focused funds.
“Orezone is excited to be advancing these transformational initiatives during this period of record high gold prices,’’ said Orezone President and CEO Patrick Downey. The company plans to expand production by constructing an independent hard rock plant adjacent to the oxide plant that is currently in operation.