Orezone Reports Second Quarter 2023 Results
OREZONE GOLD CORPORATION
450-505 Burrard Street
Vancouver, BC, V7X 1M3
T: 778-945-8977
Orezone Reports Second Quarter 2023 Results
(All dollar amounts in USD unless otherwise stated).
August 9, 2023 – Vancouver, BC - Orezone Gold Corporation (TSX: ORE, OTCQX: ORZCF) (“Orezone” or
“Company”) reported its operational and financial results for the three and six months ended June 30,
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.sedarplus.ca. The Company will
host a conference call and webcast on August 10, 2023 commencing at 8:00am PDT to discuss the
Company’s second quarter results. Additional details are provided at the end of this press release.
Patrick Downey, President and CEO, commented “The Bomboré mine delivered another solid quarter of
gold production which allowed the Company to reduce its debt by a further $19.1 million while
maintaining a healthy cash balance. During the quarter , the operations team successfully completed
several mill maintenance tasks including a full mill re -line with a new liner design that will increase liner
life going forward. Processed head grades were lower than modelled in the first half of 2023 as we
encountered a greater intensity of historical artisanal depletion in certain near-surface higher-grade ore
zones mined. As a result, we now forecast that 2023 gold production will trend towar ds the low-end of
our guidance range with a modest increase in AISC guidance.
With our value enhancing i nitiatives, we are advancing fieldwork to connect to Burkina Faso’s national
grid and remain on track to receive grid power before year-end. Once completed, this will significantly
reduce our cost for power which is currently being generated using on-site diesel gensets rented from a
third party. In addition, our Phase II hard rock expansion feasibility study and LOM plan update is nearing
completion with release of study results planned for the end of September.”
SECOND QUARTER 2023 HIGHLIGHTS
Operational
• Produced 35,482 gold oz
• Sold 33,608 gold oz at an average realized price of $1,970 per oz
• AISC1 of $1,109 per gold oz sold
• Zero lost-time injuries with 1,037,000 personnel hours worked
Financial
• Revenue of $66.4 million
• Earnings from mine operations of $27.5 million
• Net income and net income per share (basic) attributable to Orezone shareholders of $11.4
million and $0.03, respectively
• Adjusted earnings1 and adjusted earnings per share1 (basic) attributable to Orezone shareholders
of $11.2 million and $0.03, respectively
• Cash flow from operations before changes in non -cash working capital of $ 25.2 million ($20.2
million after changes in non-cash working capital)
• Free cash flow1 of $8.0 million
• Principal repayment of $19.1 million under the Coris Bank senior debt facility
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• Cash of $32.3 million at June 30, 2023
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) Q2-2023 Q1-2023 H1-2023
Operating Performance
Gold production oz 35,482 41,301 76,783
Gold sales oz 33,608 43,139 76,747
Average realized gold price $/oz 1,970 1,892 1,926
Cash costs per gold ounce sold1 $/oz 924 799 854
All-in sustaining costs1 (“AISC”) per gold ounce sold $/oz 1,109 926 1,006
Financial Performance
Revenue $000s 66,396 81,712 148,108
Earnings from mine operations $000s 27,490 39,670 67,160
Net income attributable to shareholders of Orezone $000s 11,380 22,560 33,940
Net income per common share attributable to shareholders of
Orezone:
Basic
Diluted
$
$
0.03
0.03
0.07
0.06
0.10
0.09
Adjusted EBITDA1 $000s 31,526 42,645 74,171
Adjusted earnings attributable to shareholders of Orezone1 $000s 11,236 24,574 35,810
Adjusted earnings per share attributable to shareholders of
Orezone1 $ 0.03 0.07 0.10
Cash and Cash Flow Data
Operating cash flow before changes in working capital $000s 25,228 41,137 66,365
Operating cash flow $000s 20,155 38,926 59,081
Free cash flow1 $000s 8,016 31,498 39,514
Cash, end of period $000s 32,309 45,172 32,309
1 Cash costs, AISC, Adjusted EBITDA, Adjusted earnings, Adjusted earnings per share, and Free cash flow are non-IFRS measures.
See “Non-IFRS Measures” section below for additional information.
The Company poured first gold on September 10, 2022 and declared commercial production on December
1, 2022 at its Bomboré mine. As a result, comparative figures for the corresponding quarter and year-to-
date period in the prior year have not been presented as they are not meanin gful as the Bomboré mine
was under construction during this period. Operating and financial performance in the current quarter
have been compared against Q1-2023 to highlight quarter-over-quarter movements in performance.
2023 Guidance Update
The Company previously issued 2023 gold production guidance of between 140,000 to 155,000 oz with
AISC per gold o unce sold in the range of $1,010 to $1,110 . The Company is now forecasting 2023 gold
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production at the bottom end of its guidance range. Greater-than-anticipated artisanal depletion has
been encountered in certain high-grade zones mined to the end of H1-2023 which has resulted in lower-
than-modelled ore grades being delivered to the process plant. Significant artisanal workings were
encountered in H1-2023 but evidence of artisanal activity has diminished as the Company mines towards
lower pit benches. As a result, the Company expects historical artisanal activity to have less influence on
the modelled mined grades in H2-2023. In addition, the mining contractor is currently approximately 10%
behind plan in terms of material movement which has delayed access to areas of higher -grade ore. A
second mining contractor, currently on-site assisting with the expansion of the tailings storage facility, has
been hired on a temporary basis to improve mining volumes and to catch-up to plan by the end of 2023.
As planned, the Company has processed its last remaining stockpiles of higher -grade ore accumulated
during construction in June 2023, and therefore, gold production in H2-2023 is expected to decline from
production levels realized in H1 -2023, offsetting the benefits of greater mining volumes and expected
lower artisanal depletion.
AISC per ounce sold for 2023 is now revised upwards to $1,100 - $1,180, up from the previous guidance
range of $1,010 - $1,110. The cost increase is driven mainly by the lower forecasted gold production and
head grades. Other contributing factors include persistently high local diesel prices which affect both
mining costs and on-site power generation, a stronger XOF currency, and additional government royalties
from a higher-than-budgeted realized gold price.
BOMBORÉ GOLD MINE (100% BASIS) – OPERATING HIGHLIGHTS
Q2-2023 Q1-2023 H1-2023
Safety
Lost-time injuries frequency rate (LTIFR) per 1M hours 0.00 0.00 0.00
Personnel-hours worked 000s hours 1,037 928 1,965
Mining Physicals
Ore tonnes mined tonnes 1,927,753 2,205,056 4,132,809
Waste tonnes mined tonnes 3,152,264 2,382,135 5,534,399
Total tonnes mined tonnes 5,080,017 4,587,191 9,667,208
Strip ratio waste:ore 1.64 1.08 1.34
Processing Physicals
Ore tonnes milled tonnes 1,400,160 1,445,693 2,845,853
Head grade milled Au g/t 0.87 0.96 0.92
Recovery rate % 91.1 92.2 91.7
Gold produced oz 35,482 41,301 76,783
Unit Cash Cost
Mining cost per tonne $/tonne 2.86 2.91 2.89
Mining cost per ore tonne processed $/tonne 6.46 6.51 6.49
Processing cost $/tonne 10.72 9.21 9.95
Site general and admin (“G&A”) cost $/tonne 3.73 3.23 3.47
Cash cost per ore tonne processed $/tonne 20.91 18.95 19.91
Cash Costs and AISC Details
Mining cost (net of stockpile movements) $000s 9,050 9,417 18,467
Processing cost $000s 15,006 13,322 28,328
Site G&A cost $000s 5,217 4,667 9,883
Refining and transport cost $000s 164 148 312
Government royalty cost $000s 3,930 4,912 8,842
Gold inventory movements $000s (2,299) 2,019 (280)
Cash costs1 on a sales basis $000s 31,068 34,485 65,552
Sustaining capital $000s 4,308 3,530 7,838
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Q2-2023 Q1-2023 H1-2023
Sustaining leases $000s - 187 187
Corporate G&A cost $000s 1,883 1,731 3,614
All-In Sustaining Costs1 on a sales basis $000s 37,259 39,933 77,192
Gold sold oz 33,608 43,139 76,747
Cash costs per gold ounce sold1 $/oz 924 799 854
All-In Sustaining Costs per gold ounce sold1 $/oz 1,109 926 1,006
1 Non-IFRS measure. See “Non-IFRS Measures” section for additional details.
Bomboré Production Results
Gold production in Q2-2023 was 35,482 oz, a decrease of 14% from the 41,301 oz produced in Q1 -2023.
The drop in gold production is attributable to decreases in head grades of 9%, plant throughput of 3%,
and plant recoveries of 2% as compared to the prior quarter.
Head grades were lower in Q2 due to mine sequencing, greater prevalence of historical artisanal activity
in areas mined, and the mill feed prioritization of better grade ore stockpiles in Q1.
Plant throughput declined marginally from Q1 which exceeded nameplate by approximately 13%. Lower
plant availability in Q2 was the result of routine maintenance for the installation of newly designed mill
liners in April 2023 and the replacement of worn shafts in the front -end mineral sizer in late May 2023.
All major planned maintenance is now complete for 2023 with plant throughput expected to trend
upwards again towards record levels.
As mining deepens in certain pits , the quantity of transition ore is starting to increase . The presence of
transition ore results in slightly lower metallurgical recovery and the generation of additional ball mill
scats that must be recirculated through the circuit to achieve the required grind size fraction.
Consequently, plant recoveries were slightly lower in Q2 as compared to Q1.
To improve the treatment efficiency of scats and to crush hard oversize transition material, the Company
has acquired a used mobile crushing system (a jaw crusher and a cone crusher) in good condition to pre-
treat transition ore ahead of the ROM dump pocket and to crush scats prior to recirculation. The system
is currently in transit from overseas and is scheduled to be placed into operations by the end of October
2023. This system will also provide additional process plant operational flexibility once the future Phase
II Hard Rock plant expansion is in operation.
Bomboré Operating Costs
AISC per gold ounce sold in Q2-2023 was $1,109, an increase of 20% from the AISC per gold ounce sold of
$926 in Q1-2023. The increase in AISC was mainly driven by a combination of lower head grades, plant
throughput, and recovery as explained above, higher unit operating costs, and timing of sustaining capital.
Cash cost per ore tonne processed increased by 10% from $18.95 per tonne in Q1 to $20.91 per tonne in
Q2 due primarily to lower plant throughput and higher processing costs for maintenance from the mill re-
line and sizer shaft change-outs, and greater consumption of lime, grinding media, and power to treat a
larger percentage of transition or e and scats. Site G&A also increased modestly from the planned
spending increase on site security improvements including additional reinforcements of highly -trained
guards and a greater frequency of patrols on and around the mining permit.
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Bomboré Growth Capital Projects
Grid Power Connection
The project to connect Bomboré to Burkina Faso’s national grid continues to advance and remains on
schedule for completion before the end of the 2023 year.
All long lead equipment orders are in fabrication with certain deliveries already received at site. The main
installation contractors have mobilized and fieldwork has commenced for the switching station, the main
on-site substation, and the transmission line towers. SONABEL , Burkina Faso’s state -owned electricity
company, has approved the required drawings and designs for the powerline and substations while land
compensation under the direction of SONABEL and ground clearing for the transmission line corridor are
essentially complete. Pouring of concrete foundations for the 56 transmission towers are on -going with
the first shipment of transmission towers and stringing gear expected to arrive in August 2023. The
Company is reviewing opportunities to accelerate or to mitigate risks to schedule. The Company has also
initiated discussions to formalize a power purchase agreement with SONABEL following the memorandum
of understanding signed between the parties earlier in the year.
Resettlement Action Plan (“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 erection of over 1,200 private homes and public structures.
RAP construction is currently behind schedule as the construction start for the MV3 village was delayed
for two months as communities conducted sacred cer emonies for the new resettlement grounds. The
Company has engaged several local contractors to complete homes on distinct lots within the MV3 site.
To improve the pace of construction, the Company has commenced the award of work to additional
contractors along with the recruitment of a small owner’s team to assist with procurement of building
material and site construction activities.
RAP compensation for displaced households began in late Q2-2023 and has continued into Q3-2023.
2023 Feasibility Study (“2023 FS”) Update for the Phase II Expansion
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 the 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 134K oz per year for the first ten years of commercial operations.
Subsequent to the 2019 FS, over 150,000 m of drilling has been completed leading to the discovery of the
near surface P17NE deposit and extensions of other known higher grade hard rock zones within the main
Bomboré deposit. Results of drilling undertaken in 2022 are expected to successfully convert Inferred
resources of higher grade hard rock material into the Measured and Indicated categories.
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The Company expects the new hard rock expansion will be sized as a 4.4Mtpa standalone circuit to
operate independently and in parallel 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 size to 10.1Mtpa
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 extens ions and potential new
discoveries from future drilling.
Metallurgical test work is complete and confirms more rapid leach kinetics than those contemplated in
the 2019 FS, leading to a significant reduction 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. Flowsheet development is also
complete and will follow the same design (e.g. carbon -in-leach and elution circuits) of the current
operations where feasible to standardize equipment and processes. Firm quotes have been received for
the SAG mill, which is on the critical path, and budgetary quotes for all other major equipment are in hand
and under evaluation and will form the basis for the expansion capital estimate. Modell ing of the new
mineral resource estimate has concluded with modelling of the new mineral reserve estimate well -
advanced. The Company remains on track to release the study results by the end of Q3-2023.
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 the
Company intends to launch more formal discussions with Coris Bank as it draws closer to completing the
2023 FS when information about the new expansion economics and capital requirements are better
known.
NON-IFRS MEASURES
The Company has included certain terms or performance measures commonly used in the mining industry
that is not defined under IFRS, in cluding “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 accord ance 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 and six months ended June 30, 2023 which is
incorporated by reference herein.
CONFERENCE CALL AND WEBCAST
Orezone will host a conference call and audio webcast to discuss second quarter 2023 results on
Thursday, August 10, 2023 at 8:00am PDT (11:00am EDT).
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Webcast
Date: Thursday, August 10
Time: 8:00 am Pacific Time (11:00 am Eastern time)
Please register for the webcast here: Orezone Q2-2023 Conference Call and Webcast
Conference Call
Toll-free in U.S. and Canada: 1-800-715-9871
International callers: +646-307-1963
Event ID: 1179590
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.
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 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 expansi on. 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.sedarplus.ca.
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
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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
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 inform ation form and management ’s
discussion and analysis filed on SEDAR+ on www.sedarplus.ca. 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 exploration activities; the
timing, extent, duration and economic viability of such operations, including any mineral resour ces 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 an d 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 require d; 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