Orezone Reports First Quarter 2023 Results
OREZONE GOLD CORPORATION
450-505 Burrard Street
Vancouver, BC, V7X 1M3
T: 778-945-8977
Orezone Reports First Quarter 2023 Results
(All dollar amounts in USD unless otherwise stated).
May 9 , 2023 – Vancouver, BC - Orezone Gold Corporation (TSX: ORE, OTCQX: ORZCF) (“Orezone” or
“Company”) reported its operational and financial results for the three months ended March 31, 2023.
The consolidated financial statements and Management’s Discussion and Analysis are available at
www.orezone.com and on the Company’s profile on SEDAR at www.sedar.com. The Company will host a
conference call and webcast on May 10, 2023 commencing at 8:00am PDT to discuss the Company’s first
quarter results. Additional details are provided at the end of this press release.
Patrick Downey, President and CEO, commented “Earnings from mine operations exceeded $39 million in
Bomboré’s first full quarter of commercial production and have provided a strong start to the Company’s
net earnings and free cash flow for 2023. Gold production of 41,301 oz was helped by excellent
performance of the process plant with mill throughput at 13% above design and recoveries at a steady
92.2%. Our operational efficiency and stringent cost management assisted in offsetting cost pressures
from a stronger local currency and high in-country diesel prices. With robust gold prices, AISC margin was
$966 per oz sold or an impressive 51%.
Our safety record continues to be exemplary with no lost time injuries for the quarter from 928,000 hours
worked and an LTIFR of zero since 2021 when construction of the Phase I Oxide plant commenced.
On the growth front, work on our grid power connection is advancing at a steady rate with the awards of
all major installation contracts and order placements for schedule-critical equipment. Significant savings
from current on-site power generation will be realized once the connection is energized, expected in Q4-
2023. Lastly, work on the Bomboré Phase II Expansion study update remains on track for completion by
the end of this third quarter.”
FIRST QUARTER 2023 HIGHLIGHTS
Operational
• Produced 41,301 gold oz
• Sold 43,139 gold oz at an average realized price of $1,892 per oz
• AISC1 of $926 per gold oz sold
• Zero lost-time injuries with 928,000 personnel hours worked
Financial
• Revenue of $81.7 million
• Earnings from mine operations of $39.7 million
• Net income and net income per share (basic) attributable to Orezone shareholders of $22.6
million and $0.07, respectively
• Adjusted earnings1 and adjusted earnings per share1 (basic) attributable to Orezone shareholders
of $24.6 million and $0.07, respectively
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• Cash flow from operations before changes in non -cash working capital of $41.1 million ($3 8.9
million after changes in non-cash working capital)
• Free cash flow1 of $31.5 million
• Cash of $45.2 million at March 31, 2023
Corporate
• Rob Henderson appointed as VP Technical Services and Kevin MacKenzie appointed as VP
Corporate Development and Investor Relations on January 5, 2023
• Non-brokered private placement of 13.0 million common shares at C$1.27 per share arranged
with a large, well -established, global institutional fund manager and closed on March 8, 2023,
resulting in net proceeds of $11.6 million
1 Non-IFRS measures. See “Non-IFRS Measures” section below for additional details.
PRODUCTION AND FINANCIAL SUMMARY
(All mine site figures are on a 100% basis) Q1-2023 Q4-2022
Operating Performance
Gold production oz 41,301 22,258
Gold sales oz 43,139 24,676
Average realized gold price $/oz 1,892 1,760
Cash costs1 per gold ounce sold $/oz 799 973
All-in sustaining costs1 (“AISC”) per gold ounce sold $/oz 926 1,075
Financial Performance
Revenue $000s 81,712 43,431
Earnings from mine operations $000s 39,670 16,660
Net income attributable to shareholders of Orezone $000s 22,560 3,763
Net income per common share attributable to shareholders of
Orezone:
Basic
Diluted
$
$
0.07
0.06
0.01
0.01
Adjusted EBITDA1 $000s 42,645 15,725
Adjusted earnings1 attributable to shareholders of Orezone $000s 24,574 9,903
Adjusted earnings per share1 attributable to shareholders of Orezone $ 0.07 0.03
Cash and Cash Flow Data
Operating cash flow before changes in working capital $000s 41,137 15,400
Operating cash flow $000s 38,926 23,235
Free cash flow1 $000s 31,498 8,942
Cash $000s 45,172 9,158
1 Non-IFRS measures. See “Non-IFRS Measures” section below for additional information.
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BOMBORÉ GOLD MINE (100% BASIS) – OPERATING HIGHLIGHTS
Q1-2023 Q4-20222
Safety
Lost-time injuries frequency rate (LTIFR) per 1M hours 0.00 0.00
Personnel-hours worked 000s hours 928 958
Mining Physicals
Ore tonnes mined tonnes 2,205,056 1,526,949
Waste tonnes mined tonnes 2,382,135 3,087,950
Total tonnes mined tonnes 4,587,191 4,614,899
Strip ratio waste:ore 1.1 2.0
Processing Physicals
Ore tonnes milled tonnes 1,445,693 806,875
Head grade milled Au g/t 0.96 0.93
Recovery rate % 92.2 91.9
Gold produced oz 41,301 22,258
Unit Cash Cost1
Mining cost per tonne $/tonne 2.91 2.57
Mining cost per ore tonne processed $/tonne 6.51 6.58
Processing cost $/tonne 9.21 12.47
Site general and admin (“G&A”) cost $/tonne 3.23 4.87
Cash cost per ore tonne processed $/tonne 18.96 23.92
Cash Costs and AISC Details
Mining cost (net of stockpile movements) $000s 9,417 5,306
Processing cost $000s 13,322 10,062
Site general and admin cost $000s 4,667 3,928
Refining and transport cost $000s 148 92
Government royalty cost $000s 4,912 2,608
Gold inventory movements $000s 2,019 2,010
Cash costs3 on a sales basis $000s 34,485 24,006
Sustaining capital $000s 3,530 1,550
Sustaining leases $000s 187 -
Corporate general and admin cost $000s 1,731 959
All-In Sustaining Costs3 on a sales basis $000s 39,933 26,515
Gold sold oz 43,139 24,676
Cash costs per gold ounce sold3 $/oz 799 973
All-In Sustaining Costs per gold ounce sold3 $/oz 926 1,075
1 The Bomboré Mine entered into commercial production on December 1, 2022 . Unit cash costs during pre -
commercial production are not representative of cost performance expected under steady -state operat ions. Cost
figures presented for Q4-2022 include a blend of costs before and during commercial production.
2 The Bombore Mine did not process any significant quantity of ore for the month of October 2022 due to insufficient
power as the power plant underw ent repairs. As a result, departmental costs for processing and site general and
admin have been excluded from the cash cost and AISC figures presented for Q4 -2022. These costs have been
capitalized as commissioning costs.
3 Non-IFRS measure. See “Non-IFRS Measures” section below for additional details.
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Commissioning of the process plant with ore commenced in late August 2022, resulting in the pouring of
first gold on September 10, 2022 but commissioning was interrupted in late September 2022 when one
of the two working permanent gensets experienced a major failure. As a consequence, mill operations
were stopped in October 2022 and only recommenced in November 2022 when replacement rental
gensets were mobilized, installed, and put into service. Wi th full and reliable power, the process plant
quickly ramped -up daily mill tonnages which led to Bomboré declaring commercial production on
December 1, 2022.
Bomboré Production Results
Gold production in Q1-2023 was 41,301 oz, an increase of 86% from the 22,258 oz produced in Q4-2022.
The higher gold production is attributable to a 79% jump in plant throughput combined with slight
increases in ore grades and plant recoveries. The process plant performed exceptionally well in Q1-2023
with throughput averaging 16,063 tonnes per day which exceeded nameplate by approximately 13% while
process recoveries were consistent with design levels. Favourable ore characteristics and high levels of
plant availability and utilization led to a strong quarterly performan ce. Scheduled maintenance was
conducted during the quarter with major mill shutdowns for mill re -line and scheduled change -outs of
wear parts planned for in later quarters of the year.
Bomboré Operating Costs
AISC per gold ounce sold in Q1 -2023 was $926, a decrease of 14% from the AISC per gold ounce sold of
$1,075 in Q4-2022. The lower AISC was driven mainly by improved performance in unit costs and a 3%
increase in ore grades milled. Cash cost per ore tonne processed covering mining, processing and sit e
G&A declined by 21% or $4.96 from $23.92 in Q4-2022 to $18.96 in Q1-2023 as a result of the higher mill
throughput and the corresponding decrease in fixed unit costs. In addition, processing costs benefitted
from the optimized consumption of major reage nts through enhancements in operator controls and a
better understanding of field operating conditions. However, cost of power generation remains elevated
and above budget due to persistently high in -country diesel prices set by the Burkina Faso governmen t.
The Company had expected a moderation in diesel prices starting in 2023 to reflect falling global oil prices
in H2 -2022 but decreases in diesel prices have not yet materialized . This high diesel cost also had a
negative effect on unit mining costs.
Bomboré Growth Capital Projects
Grid Power Connection
The project to connect Bomboré to Burkina Faso’s national grid is progressing well and remains on
schedule for completion before the end of the 2023 year. The Company has engaged ECG Engineering
Pty Ltd. (“ECG”) to manage the design, construction, and commissioning of the new high voltage
transmission line and dedicated substations, and will work closely with SONABEL , Burkina Faso’s state-
owned electricity company, to ensure timely deliverables and adherence to schedule. ECG is a specialized
engineering firm that has successfully delivered on similar projects in West Africa, including Burkina Faso.
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To-date, all long lead equipment orders have been placed and all major contracts have be en awarded.
Land compensation for the transmission line corridor has commenced under the direction of SONABEL
and work to clear this ground corridor will follow shortly upon the mobilization of contractor equipment
and personnel. Drawings and designs for the powerline and substations have been submitted to SONABEL
and are pending their final review and approval.
RAP Phases II and III
RAP Phases II and III involve the construction of four new resettlement villages (MV3, MV2, BV2, and BV1).
The Company has sequenced MV3 as the first village to construct in order to gain access to mining areas
that are currently contemplated in the 2024 mine plan. MV3 is the largest of the resettlement villages
and requires the new erection of over 1,200 private homes and public structures.
The start of construction for the MV3 village encountered a slight delay in the first two months of 2023 as
communities conducted sacred ceremonies for the new resettlement grounds. Earthwork for MV3 is now
complete and contractors have commenced the mobilization of personnel, materials, and equipment to
site.
RAP compensation for displaced households is organized to begin in Q2-2023.
2023 Feasibility Study Update for the Phase II Expansion (“2023 FS”)
The 2019 feasibility study (“2019 FS”) contemplated the construction of a 2.2M tonnes per annum (“tpa”)
hard rock facility which would commence production in the third year of oxide operations. Based on the
mineral reserves outlined in this 2019 FS, the overall plant capacity was to remain at a nominal 5.2Mtpa,
comprising of 3.0Mtpa of oxides and 2.2Mtpa of hard rock, resulting in an average gold production profile
of 134,000 oz per year for the first ten years of commercial operations.
Subsequent to the 2019 FS, over 100,000 metres of drilling have been completed leading to the discovery
of the near surface P17NE deposit and extensions of other known higher grade hard rock zones with the
main Bomboré deposit. Results of drilling undertaken in 2022 are expected to successfully conve rt
Inferred resources of higher grade hard rock material into the Measured and Indicated categories. The
updated resource modelling is progressing and a new resource, reserve, and mine plan are targeted for
completion in Q3-2023.
Metallurgical test work is also nearing completion which confirms more rapid leach kinetics and a
resultant significant decrease in required leach time from the 42 hours shown in the 2019 FS to the
estimated 24 hours to be used in plant design for the 2023 FS. The Company expec ts the new hard rock
expansion will be sized as a 4.4Mtpa standalone circuit to operate independently to the existing 5.7Mtpa
oxide circuit, a notable increase to the 5.2Mtpa combined circuit in the 2019 FS. The Company has chosen
to expand the circuit si ze as it believes recent drilling successes have demonstrated that the Bomboré
mine is capable of supporting a larger annual operation. The Bomboré deposit remains open to further
extensions and potential new discoveries from future drilling.
For the 2023 FS, the Company has engaged the same consultants (Lycopodium and Knight Piésold) that
completed the development and construction of the current Phase I operations to ensure continuity and
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consistency. Flowsheet development is complete, and equipment and capital costs are well advanced.
Of note is that the carbon-in-leach and elution circuits will be copies of those in current operations.
The Company has held early discussions with its senior lender, Coris Bank, about their participation in this
future Phase II Expansion. Coris Bank has indicated they are supportive of this expansion and look forward
to furthering discussions as the Company draws closer to completing its 2023 FS.
NON-IFRS MEASURES
The Company has included certain terms or performance measures commonly used in the mining industry
that is not defined under IFRS, including “cash costs”, “AISC”, “EBITDA”, “adjusted EBITDA”, “adjusted
earnings”, “adjusted earnings per share”, and “free cash flow”. Non -IFRS measures do not have any
standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar
measures presented by other companies. The Company uses such measures to provide additional
information and they should not be considered in isolation or as a substitute for measures of performance
prepared in accordance with IFR S. For a complete description of how the Company calculates such
measures and reconciliation of certain measures to IFRS terms, refer to “Non -IFRS Measures” in the
Management’s Discussion and Analysis for the three months ended March 31, 2023 which is incorporated
by reference herein.
CONFERENCE CALL AND WEBCAST
Orezone will host a conference call and audio webcast to discuss first quarter 2023 results on Wednesday,
May 10, 2023 at 8:00am PDT (11:00am EDT).
Webcast
Date: Wednesday, May 10, 2023
Time: 8:00 am Pacific Time (11:00 am Eastern time)
Please register for the webcast here: Orezone Q1-2023 Conference Call and Webcast
Conference Call
Toll-free in U.S. and Canada: 1-800-715-9871
International callers: +646-307-1963
Event ID: 8574266
QUALIFIED PERSONS
The scientific and technical information in this news release was reviewed and approved by Dr. Pascal
Marquis, Geo., Senior Vice President of Exploration, Mr. Rob Henderson, P. Eng, Vice President of
Technical Services, and Mr. Patrick Downey, P.Eng. President and CEO, all of whom are Qualified Persons
as defined under NI 43-101 Standards of Disclosure for Mineral Projects.
About Orezone Gold Corporation
Orezone Gold Corporation (TSX: ORE OTCQX: ORZCF) is a Canadian mining company operating the open
pit Bomboré Gold Mine in Burkina Faso.
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Orezone is focusing on mining and processing the Phase I near surface free-dig oxides at a planned annual
throughput of 5. 7 million tonnes . The Company believes that Bomboré has a significant underlying
sulphide resour ce to support a substantially larger Phase II 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 II expansion . It is expe cted that the pending study will be
completed in Q3-2023 to be followed by a production decision.
Orezone is led by an experienced team focused on social responsibility and sustainability with a proven
track record in project construction and operations, financings, capital markets and M&A.
The technical report for the 2019 Feasibility Study on the Bomboré Project entitled NI 43 -101 Technical
Report (Amended) Feasibility Study of the Bomboré Gold Project is available on SEDAR under the
Company’s profile at www.sedar.com.
Patrick Downey
President and Chief Executive Officer
Vanessa Pickering
Manager, Investor Relations
Tel: 1 778 945 8977 / Toll Free: 1 888 673 0663
[email protected] / www.orezone.com
For further information please contact Orezone at +1 (778) 945-8977 or visit the Company’s website at
www.orezone.com.
The Toronto Stock Exchange neither approves nor disapproves the information contained in this news
release.
Cautionary Note Regarding Forward-Looking Statements
This press release contains certain information that constitutes “forward-looking information” within the
meaning of applicable Canadian Securities laws and “forward-looking statements” within the meaning of
applicable U.S. securities laws (together, “forward-looking statements”). Forward-looking statements are
frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”,
“estimate”, “potential”, “possible” and other similar words, or statements that certain events or
conditions “may”, “will”, “could”, or “should” occur. Forward-looking statements in this press release
include, but are not limited to, statements with respect to the Bomboré Growth Capital Projects and the
2023 Feasibility Study Update for the Phase II Expansion.
All forward-looking statements are subject to a variety of risks and uncertainties and other factors that
could cause actual events or results to differ materially from those projected in the forward -looking
statements including, but not limited to, terrorist or other violent attacks, the failure of parties to
contracts to honour contractual commitments, unexpected changes in laws, rules or regulations, or their
enforcement by applicable authorities; social or labour unrest; changes in commodity prices; unexpected
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failure or inadequacy of infrastructure, the possibility of project cost overruns or unanticipated costs and
expenses, accidents and equipment breakdowns, political risk, unanticipated changes in key management
personnel, the spread of diseases, epidemics and pandemics diseases, market or business conditions, the
failure of exploration programs, including drilling programs, to deliver anticipated results and the failure
of ongoing and uncertainties relating to the availability and costs of financing needed in the future, and
other factors described in the Company's most recent annual information f orm and management ’s
discussion and analysis filed on SEDAR on www.sedar.com. Readers are cautioned not to place undue
reliance on forward-looking statements.
Forward-looking statements are based on the applicable assumptions and factors management considers
reasonable as of the date hereof, based on the information available to management at such time. These
assumptions and factors include, but are not limited to, assumptions and factors related to the Company’s
ability to carry on current and future operations, including: development and explo ration activities; the
timing, extent, duration and economic viability of such operations, including any mineral resources or
reserves identified thereby; the accuracy and reliability of estimates, projections, forecasts, studies and
assessments; the Compa ny’s ability to meet or achieve estimates, projections and forecasts; the
availability and cost of inputs; the price and market for outputs, including gold; foreign exchange rates;
taxation levels; the timely receipt of necessary approvals or permits; the ability to meet current and future
obligations; the ability to obtain timely financing on reasonable terms when required; the current and
future social, economic and political conditions; and other assumptions and factors generally associated
with the mining industry.
Although the forward -looking statements contained in this press release are based upon what
management of the Company believes are reasonable assumptions, the Company cannot assure investors
that actual results will be consistent with these forward -looking statements. These forward -looking
statements are made as of the date of this press release and are expressly qualified in their entirety by
this cautionary statement. Subject to applicable securities laws, the Company does not assume any
obligation to u pdate or revise the forward -looking statements contained herein to reflect events or
circumstances occurring after the date of this press release.