Orezone Reports Fourth Quarter and Full Year 2022 Results
OREZONE GOLD CORPORATION
450-505 Burrard Street
Vancouver, BC, V7X 1M3
T: 778-945-8977
Orezone Reports Fourth Quarter and Full Year 2022 Results
March 23, 2023 – Vancouver, BC - Orezone Gold Corporation (TSX: ORE, OTCQX: ORZCF) (“Orezone” or
“Company”) today reported its financial and operating results for the fourth quarter and full year 2022.
(All dollar amounts in USD unless otherwise indicated. “M” denotes million.)
Fourth Quarter and Full Year 2022 Highlights
• Gold production of 22,258 ounces in Q4-2022 and 27,831 ounces for 2022.
• Gold sales of 24,676 ounces for both Q4 -2022 and 2022, at an All -In Sustaining Costs ("AISC")1 per
gold ounce sold of $1,075 and revenue of $43.4M.
• Net income attributable to shareholders of Orezone of $3.8M for Q4-2022 and $0.9M for 2022.
• Cashflow from operations of $28.5M for Q4-2022 and $6.0M for 2022.
• Cash balance of $9.2M at December 31, 2022, an increase of $1.8M from September 30, 2022.
• Achievement of 2022 guidance including:
Pouring of first gold on September 10, 2022.
Declaration of commercial production at Bomboré on December 1, 2022.
Delivery of the Bomboré project construction (excluding the third -party managed power plant)
on schedule and under budget. Final project construction costs including pre-production mining
but excluding power plant totalled $168.9M, below the project approved budget of $173.8M.
Orderly transition from construction and commissioning to operations as the Company benefitted
from operational readiness activities undertaken prior to first gold.
Completion of its Phase III exploration drill campaign with the purpose of extending Bombo ré
sulphide expansion potential by converting sulphide resources from Inferred to the Measured and
Indicated categories. The Phase III campaign successfully returned numerous wide, high -grade
intercepts in mineralized zones within Maga, Siga, P8P9, and th e P17 trend. The Company will
incorporate these new and encouraging drill results into a revised mineral resource and mineral
reserve estimate that is being prepared as part of the planned 2023 feasibility study update for
the Phase II Sulphide Expansion.
Patrick Downey, President and CEO, stated “2022 was a milestone year culminating in the declaration of
commercial production before year-end. In a span of under two years, we have succeeded in meeting the
challenges of financing and building a greenfield mining project to deliver a profitable mine on time and
under budget. The Bomboré process plant is now operating above expectations after initial difficulties
1 AISC is a non-IFRS measure. See “Non-IFRS Measures” section of this news release for additional details.
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with reliable power were resolved. Bomboré continues to generate strong operating cashflows that we
are directing towards working capital, debt repayments, and growth projects including installation of grid
power which will significantly reduce processing costs once installed.
We see 2023 as another exciting year as we work on the release of an updated feasibility study for our
Phase II Sulphide Expansion. The study will incorporate over 100,000 metres of drill results including those
from the Phase III drill program completed in 2022 . A larger Phase II Sulphide Expansion than that
contemplated in the current 2019 study is now envisioned and we look forward to sharing the details of
this new study later this year.”
Financial and Operating Highlights
(All mine site figures are on a 100% basis) Q4-2022 FY2022
Operating Performance
Gold production oz 22,258 27,831
Gold sales oz 24,676 24,676
Average realized gold price $/oz 1,760 1,760
All-in sustaining costs1 (“AISC”) per gold ounce sold $/oz 1,075 1,075
Financial Performance
Revenue $000s 43,431 43,431
Earnings from mine operations $000s 16,660 16,660
Net income attributable to shareholders of Orezone $000s 3,763 930
Net income per common share attributable to shareholders
of Orezone:
Basic
Diluted
$
$
0.01
0.01
0.00
0.00
Operating cashflow before changes in working capital $000s 15,400 6,023
Operating cashflow $000s 23,235 6,582
Cash and cash equivalents $000s 9,158 9,158
1 AISC is a non-IFRS measure. See “Non-IFRS Measures” section below for additional details.
Bomboré Gold Mine, Burkina Faso (100% Basis)
Q4-20222 FY20222
Safety
Lost-time injuries frequency rate (LTIFR) per 1M hours 0.00 0.00
Personnel-hours worked 000s hours 958 4,276
Mining Physicals
Ore tonnes mined tonnes 1,526,949 4,818,474
Waste tonnes mined tonnes 3,087,950 8,695,210
Total tonnes mined tonnes 4,614,899 13,513,684
Strip ratio waste:ore 2.0 1.8
Processing Physicals
Ore tonnes milled tonnes 806,875 1,019,465
Head grade milled Au g/t 0.93 0.92
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Q4-20222 FY20222
Recovery rate % 91.9 91.9
Gold produced oz 22,258 27,830
Unit Cash Cost1
Mining cost per tonne $/tonne 2.57 2.54
Mining cost per ore tonne processed $/tonne 6.58 6.53
Processing cost $/tonne 12.47 11.86
Site general and admin cost $/tonne 4.87 5.32
Cash cost per ore tonne processed $/tonne 23.92 23.71
Cash Cost Details
Mining cost (net of stockpile movements) $000s 5,306 6,653
Processing cost $000s 10,062 12,091
Site general and admin cost $000s 3,928 5,425
Refining and transport cost $000s 92 92
Government royalty cost $000s 2,608 2,608
Gold inventory movements $000s 2,010 (2,863)
Total mine-level cash cost on a sales basis $000s 24,006 24,006
Sustaining capital $000s 1,550 1,550
Corporate general and admin cost $000s 955 955
All-In Sustaining Costs3 on a sales basis $000s 26,515 26,515
Gold sold oz 24,676 24,676
All-In Sustaining Costs per gold ounce sold3 $/oz 1,075 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 operations. Cost figures presented for Q4- 2022 and FY2022
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 t he
power plant underwent repairs. As a result, departmental costs for processing and site general & admin have been excluded from
the cash cost and AISC figures presented for Q4-2022 and FY2022. These costs have been capitalized as commissioning costs.
3 Non-IFRS measure. See “Non-IFRS Measures” section for additional details.
Commissioning of the process plant with ore commenced in late August 2022, resulting in the pouring of
first gold on September 10, 2022. Ore commissioning was delayed by approximately four weeks as the
third-party managed power plant encountered numerous commissioning difficulties and was unable to
provide sufficient power for mill operations. During September 2022, the process plant did commence
operations but the on -site gensets fell significantly short of t heir rated power output, restricting mill
throughput to a reduced level. In late September 2022, one of the two working permanent gensets
experienced a major failure. As a consequence, mill operations were stopped in October 2022 and
recommenced in November 2022 with the use of temporary rental gensets. With full and reliable power,
the process plant quickly ramped -up daily mill tonnages leading to the achievement of commercial
production on December 1, 2022.
The process plant continued with its impro ved performance in December 2022 with mill throughput
exceeding nameplate design by 4% and process recoveries reaching design levels. Strong operations at
the Bomboré process plant have carried on into 2023 with mill throughput at 12% above nameplate for
the first two months of 2023.
2023 Outlook
The Company expects to continue the strong operating performance at the Bomboré mine into 2023,
building upon the solid monthly production results attained in December 2022. The Company intends to
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utilize operating cashflow generated by Bomboré to reduce its senior loans with Coris Bank and to fund
growth initiatives that will improve the future cost structure and mine life of the Bomboré operation.
Bomboré Operating Guidance
(100% basis)
Unit Revised Guidance
FY2023
Original Guidance
FY2023
Gold production Au oz 140,000 – 155,000 140,000 – 150,000
All-In Sustaining Costs1 $/oz Au sold $1,010 - $1,110 $975 - $1,075
Sustaining capital $M $15 - $16 $10 - $11
Growth capital $M $33 - $38 $33 - $38
Exploration and evaluation $M $4.4 $4.4
1. AISC is a non-IFRS measure. See “Non-IFRS Measures” section below for additional information.
2. Foreign exchange rates used to forecast cost metrics include XOF/USD of 625 and CAD/USD of 1.30.
3. Government royalties included in AISC assumes an average gold price of $1,700 per oz.
Revision to Original 2023 Guidance (refer to Company’s press release of January 18, 2023)
Sustaining capital has been revised upwards by $5M to $15M - $16M from the Company’s original
guidance of $10M - $11M. The Company has decided to redirect nearby waste generated during the 2023
mine plan to continue with the stage 3 lift of the tailing storage facility (“TSF”). The previous guidance
contemplated the commencement of this stage 3 lift in 2024 using waste with a longer -haul profile and
additional re-handle. The acceleration of this construction activity will ensure sufficient available tailings
storage ahead of the sulphide expansion and will result in lower overall costs for the TSF expansion as it
eliminates waste re -handle costs. Once completed, the stage 3 lift is expected to provide TSF storage
capacity to capture tailings from production to mid-2025.
Correspondingly, 2023 guidance for AISC per gold ounce sold has also been revised upwards by $35/ounce
to $1,010/ounce - $1,110/ounce.
2023 Guidance Details
Gold production is expected to be more weighted towards H1 -2023 from better in-pit ore grades due to
mine sequencing and from the reclaim of higher -grade stockpiles as supplemental mill feed. Plant
throughput is forecasted to range between 5.6M to 5.8M tonnes with plant recoveries approximating
91%.
AISC per gold ounce sold is expected to be lower in the H1-2023 in step with the higher planned gold
production for this period. Overall, AISC in 2023 will be impacted by the high cost of diesel- generated
power from on-site rental gensets until the Company’s connection to the national grid is energized.
Sustaining capital will range between $15M - $16M with $9M dedicated towards the TSF lifts (stages 2
and 3). Other areas of sustaining capital include mine and mine infrastructure, processing, security, camp,
information technology and safety. Capital coverin g camp and infrastructure improvements are
considered one-time projects not contemplated during the main construction such as site -wide sewage
treatment system, potable water treatment plant, and recreational facilities.
Growth capital consists of two main projects:
(i) Power connection to Burkina Faso’s national grid ($15M - $18M)
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The Company plans to bring low -cost grid power supplied by SONABEL, Burkina Faso’s stated -
owned electricity company, to Bomboré before the end of 2023 to replace the high-cost, on-site
diesel power generation. The Company has budgeted for the installation of a 23 -km 132 kV
transmission line, mine substation, and switching station needed to connect Bomboré to Burkina
Faso’s national grid. Energization of the powerline is scheduled for Q4-2023
(ii) Resettlement Action Plan (“RAP”) – Phases II and III ($18M - $20M for 2023)
RAP Phases II and III will see the construction of over 2,200 private and public structures in four
new resettlement villages to help relocate communities occupying areas in the southern half of
the Bomboré mining permit. During 2023, RAP costs are estimated to be $18M - $20M. The RAP
is scheduled for completion in 2024 but will be significantly advanced in 2023.
Exploration and evaluation spending includes $2.5M for the preparation of an updated Phase II Sulphide
Expansion feasibility study and $1.9M for the continuation of a reverse circulation (“RC”) drill program to
target mineralization outside of known resources and for advanced grade control. This drill program
covers over 21,000 metres of RC drilling.
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 “all -in sustaining costs”. 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 IFRS.
All-In Sustaining Costs (“AISC”) and AISC per gold ounce sold
The measure is intended to reflect the expenditures required to produce and sell an ounce of gold from
current operations. AISC include mine site operating costs (mining, processing, administration, royalties,
and selling charges), sustaining capital, sustaining exploration, and corporate general and administration
costs. E xcluded from the Compa ny’s AISC definition are d epreciation and depletion, accretion and
amortization of reclamation costs, growth capital, growth exploration, financing costs, and share -based
compensation. AISC per gold ounce sold is determined by dividing AISC by the number of gold ounces
sold.
The Company believes that the use of AISC per gold ounce metric will assist investors, analysts, and other
stakeholders of the Company in assessing the operating performance and cashflow generation of current
operations.
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($000s except for ounces sold and per ounce sold figures) Q4-20221 FY20221
Operating expenses from mine operations 21,398 21,398
Royalties 2,607 2,607
Sustaining capital 1,550 1,550
Sustaining exploration - -
Corporate general and admin 959 959
All-In Sustaining Cost on a sales basis 26,514 26,514
Gold ounces sold 24,676 24,676
All-In Sustaining Costs per gold ounce sold 1,075 1,075
1 Sales of September 2022 gold production were made in October 2022 and therefore, all 2022 gold production were sold in Q4-2022.
Sustaining and Growth Capital
($000s) Q4-2022 FY2022
Additions to mineral properties, plant and equipment 11,385 132,440
Growth capital (including capitalized borrowing costs) 9,835 130,890
Sustaining capital 1,550 1,550
The distinction of sustaining capital from growth (non -sustaining) capital follows the guidance set forth
by the World Gold Council which defines non -sustaining capital as costs incurred at new operations and
costs related to major projects at existing operati ons where these projects will materially benefit the
operation. A material benefit to an existing operation is considered to be at least 10% increase in annual
or life-of-mine production, net present value, or reserves compared to the remaining life of mine of the
operation.
For 2022, predominantly all capital expenditures are considered non -sustaining as they relate to the
construction, pre -production mining, and commissioning of the Bomboré mine. Sustaining capital
primarily relates to the stage 2 lift of the TSF expansion.
Sustaining Exploration Expense
($000s) Q4-2022 FY2022
Exploration and evaluation costs 3,065 7,932
Non-sustaining exploration and evaluation costs 3,065 7,932
Sustaining exploration expense nil nil
For 2022, exploration and evaluation costs were dedicated to exploratory drill programs to add new
Inferred resources and to upgrade existing Inferred mineral resources into Measured and Indicated, and
to study costs towards an updated Phase II Sulphide Expansion feasibility study to be released in 2023.
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Conference Call and Webcast
Orezone will host a conference call and audio webcast to discuss the financial and operating results for
Q4-2022 and 2022 year on Friday, March 24, 2023 at 8:00am PDT (11:00am EDT).
Webcast
Date: Friday, March 24, 2023
Time: 8:00 am Pacific Time (11:00 am Eastern time)
Please register for the webcast here: Orezone FY-2022 Conference Call and Webcast
Conference Call
Toll-free in U.S. and Canada: 1-800-715-9871
International callers: +646-307-1963
Event ID: 7747831
Financial Statements
Orezone’s audited financial statements and management’s discussion and analysis for the year ended
December 31, 2022 are available on the Company’s website at www.orezone.com and under the
Company’s profile on SEDAR at www.sedar.com.
Qualified Persons
The scientific and technical information in this news release was revie wed 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.
Orezone is focusing on mining and processing the Phase I near surface free-dig oxides at a planned annual
throughput of 5.2 million tonnes. T he Company believes that Bomboré has a significant underlying
sulphide resource 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 expected 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.
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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
Company’s 2023 outlook (including all statements with respect to Bomboré operating guidance), power connection
to Burkina Faso’s national grid, RAP Phases II and III, and the updated feasibility study for the Phase II Sulphide
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 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 form 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 (including those
assumptions and factors noted under the heading 2023 Guidance Details in this press release). 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 exploration 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 Company’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.