Orezone Gold rallies on Q3 news, West Africa expansion update
Orezone Gold Corp. [ORE-TSXV] said it is poised to release the results of a Phase 11 Expansion and life-of-mine study from its 90%-owned Bombore gold project in Burkina Faso, West Africa.
Orezone is focusing on mining and processing the Phase 1 near-surface free-dig oxides at a planned annual throughput of 5.7 million tonnes. However, the company believes that Bombore has a significant underlying hard rock resource to support a substantially larger Phase 11 expansion.
The company has recently completed a resource definition drill program and plans to issue an updated mineral resource, reserve and life of mine plan as part of this Phase 11 expansion. An announcement is planned for the week of October 8.
Meanwhile, Orezone said the mine produced 30,726 ounces of gold in the third quarter, bringing year-to-date production to 107,509 ounces. Third quarter gold sales of 29,167 ounces at an average realized price of US$l,910 ounces, resulting in sales of US$55.7 million.
“Production in Q3 exceeded our expectations, with higher than budgeted mining and processing rates achieved during the rainy season,’’ said Orezone President and CEO Patrick Downey. With the Q3 rainy season now behind us, and a favourable outlook for Q4, Orezone remains well-positioned to meet the lower end of its 2023 guidance of 140,000 to 155,000 ounces.
Orezone shares rallied on the new, gaining 4.7% or $0.04 to 88 cents. The shares are trading in a 52-week range of $1.64 and 80 cents.
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 [IMG-TSX, IAG-NYSE] 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, OREAF-OTCQX] and Nord Gold SE.
Under the deal Orezone said it expected to receive an upfront cash payment of US$7.15 million, money that will provide immediate cash for exploration at Bombore.
The company said this allows it to realize the value of silver not included in the 2019 feasibility study due to a lack of assay data. Orezone has agreed to deliver a minimum annual payment equivalent of 37,500 ounces of silver to Euro, commencing at the date of commercial production.
Orezone retains the option to buy back 50% of the silver stream, thereby maintaining additional exposure to the metal in a rising commodities environment.