Orezone Reports Second Quarter 2024 Results
OREZONE GOLD CORPORATION
450-505 Burrard Street
Vancouver, BC, V7X 1M3
T: 778-945-8977
Orezone Reports Second Quarter 2024 Results
All dollar amounts are in USD unless otherwise stated and abbreviation “M” means million.
August 6, 2024 – 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,
2024. The Company will host a conference call and webcast on August 7, 2024 commencing at 8:00am PT
to discuss its Q2-2024 results. Additional details are provided at the end of this press release.
Patrick Downey, President and CEO, commented “Second quarter results were impacted by lower-than-
expected grid power availability, and by lower scheduled head grades per the 2024 mine plan. Operating
and financial results are anticipated to be significantly stronger in the second half of 2024 as mining ramps
up in our newest mining areas, Siga East and Siga Sout h, which will provide a steady source of higher-
grade, soft oxide ore to the mill. This outlook is further underscored by a resumption in grid power
availability to historical levels, which for the month of July exceeded 95%.
While the temporary reduction in grid power availability in H1-2024 presented a challenge, our operating
team proved its resiliency, further optimizing and increasing plant throughput, which culminated in a
record 525,000 tonnes processed in the month of June. This performance has continued into the third
quarter, and positions the Company well to achieve its 2024 guidance.
After the quarter end, the Company announced a $105M financing package and positive construction
decision for the Bomboré Phase II hard rock expansion, in addition to a multi-year discovery focused drill
campaign. The Company looks forward to providing further announcements on these strategic initiatives
in upcoming months.”
2024 SECOND QUARTER HIGHLIGHTS AND SIGNIFICANT SUBSEQUENT EVENTS
(All mine site figures on a 100% basis) Q2-2024 Q2-2023 H1-2024 H1-2023
Operating Performance
Gold production oz 25,524 35,482 55,663 76,783
Gold sales oz 24,937 33,608 56,166 76,747
Average realized gold price $/oz 2,334 1,970 2,185 1,926
Cash costs per gold ounce sold1 $/oz 1,386 924 1,242 854
All-in sustaining costs1 (“AISC”) per gold ounce sold $/oz 1,613 1,109 1,452 1,006
Financial Performance
Revenue $000s 58,343 66,396 123,028 148,108
Earnings from mine operations $000s 23,167 27,490 50,049 67,160
Net income attributable to shareholders of Orezone1 $000s 8,939 11,380 20,636 33,940
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(All mine site figures on a 100% basis) Q2-2024 Q2-2023 H1-2024 H1-2023
Net income per common share attributable to
shareholders of Orezone1
Basic
Diluted
$
$
0.02
0.02
0.03
0.03
0.06
0.05
0.10
0.09
Adjusted EBITDA1 $000s 20,491 31,526 46,419 74,171
Adjusted earnings attributable to shareholders of
Orezone1 $000s 3,326 11,236 11,062 35,810
Adjusted earnings per share attributable to
shareholders of Orezone1 $ 0.01 0.03 0.03 0.10
Cash and Cash Flow Data
Operating cash flow before changes in working
capital $000s 15,331 25,228 35,688 66,365
Operating cash flow $000s (51) 20,155 13,586 59,081
Free cash flow1 $000s (16,951) 8,016 (14,938) 39,514
Cash, end of period $000s 11,446 32,309 11,446 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.
• Safety: Continued strong safety performance with 1.32 million and 2.73 million hours worked
without a lost-time injury for Q2-2024 and H1-2024, respectively.
• Grid Power: Gold production, plant throughput, and AISC in Q2 -2024 were negatively affected
by lower-than-normal availability of the national grid. The Bomboré mine successfully connected
to the grid at the end of January 2024 and expected to operate on grid power at its historical
availability of over 90%. However, Burkina Faso receives power from neighbouring Côte d’Ivoire
and Ghana which began to temporarily reduce power exports in March 2024 due in part to
conduct repairs to power generation plants. As a result, grid utilization at the Bomboré mine
averaged 34% in Q2 -2024 with grid blackouts and power dips contributing to 176 hours (8%) of
plant downtime. During the quarter, p ower costs using on -site diesel generators average d
approximately $0.59/kwh whereas grid power cost approximately $0.22/kwh, and this higher
power cost impacted AISC for Q2 -2024 by an estimated $110 per ounce. Encouragingly, grid
availability for July 2024 has significantly improved with utilization in excess of 95% which will
help increase gold production and lower operating costs in H2-2024.
• Rescoped Phase II Hard Rock Expansion: On May 6, 2024, the Company announced a rescoping
of its Phase II expansion into two stages to better align capital requirements with available
financing. The Company will now construct a 2.5 million tonnes per annum (“Mtpa”) hard rock
plant for stage one in comparison to the larger 4.4 Mtpa hard rock plant outlined in the 2023
feasibility study.
• Phase II Expansion Construction Decision and Financing: On July 10, 2024, the Company
announced that its Board of Directors had approved a positive construction decision on the Phase
II expansion after the Company had secured binding commitments totaling over $105 million in
additional debt and equity for the construction. The commitments consisted of binding term
sheets for a XOF 35.0 billion (~$58 million) senior secured term loan with Coris Bank International
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(“Coris Bank”) and a C$64.9 million (~$47 million) non-brokered private placement of 92,743,855
common shares of Orezone at C$0.70 per share with Nioko Resources Corporation. The Company
expects to close on both the loan and private placement in Q3-2024.
• Multi-year Exploration Campaign: On July 25, 2024, the Company announced it will initiate a
30,000 metre, multi-year discovery focused drill program designed to test the broader size and
scale of the Bomboré mineralized system which has a shallow average drill depth for resource
definition of only 200 metres across a 14 km strike length. An initial drill program of 5,000 metres
centred on the Maga Zone will commence in August 2024.
• Debt Reduction: Scheduled principal repayment of XOF 6.0 billion ($9.9 million) made in H1-2024
on the Company’s Phase I senior loan with Coris Bank. Outstanding principal on the Phase I senior
debt stood at XOF 31.0 billion (~$51 million) on June 30, 2024.
• Liquidity: Cash stood at $11.4 million on June 30, 2024, a decrease of $4.2 million from March
31, 2024 and a decrease of $20.9 million from December 31, 2023. On May 10, 2024, the
Company closed and drew down on a XOF 12.0 billion ($19.8 million) bridge loan with Coris Bank
in order to improve t he Company’s cash position which was heavily impacted in H1 -2024 by a
$22.1 million increase in non -cash working capital, mainly from the build -up of value-added tax
(“VAT”) receivables, payment of income taxes, and reduction in trade payables.
• Board Changes: At the June 7, 2024 annual general meeting of shareholders (“AGM”), Ms. Tara
Hassan was elected as a new director and Mr. Sean Harvey was appointed by the directors as the
new Board Chair following the meeting. Mr. Halvorson, a director since 2009 and Bo ard Chair
since 2018, and Mr. Charles Oliver, a director since 2017, two long -serving directors that have
made substantial contributions to the Company’s success, did not stand for re -election at the
AGM.
The Phase II Hard Rock Expansion
A hard rock plant, to complement the existing Phase I oxide plant, is required to process the fresh rock
and lower transition mineral reserves of the Bomboré orebody.
Prior to a formal construction decision on the Phase II expansion, the Company undertook early works
activities in order to maintain schedule to deliver first gold before the end of 2025. Approved early works
in progress or completed in H1-2024 included front-end engineering and design (“FEED”) with Lycopodium
Minerals Canada Ltd. (“Lycopodium”), additional camp accommodations and offices, geotechnical
investigations, and bulk earthworks on the new plant layout area.
Following the Board’s positive construction decision to proceed with the expansion in early July 2024, the
Company has released awards on four long-lead equipment packages including a 9MW SAG mill.
The capital cost estimate for this expansion is estimated at $85 million.
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2024 Guidance for Bomboré Mine
Operating Guidance (100% basis) Unit 2024 Guidance H1-2024 Actuals
Gold production Au oz 110,000 – 125,000 55,663
All-In Sustaining Costs123 $/oz Au sold $1,300 - $1,375 $1,452
Sustaining capital2 $M $14 - $15 $7.3
Growth capital (excluding Phase II Expansion)2 $M $16 - $17 $9.4
Growth capital – Phase II Expansion $M see commentary
below Unchanged
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 600 and CAD/USD of 1.30.
3. Government royalties included in AISC assumes an average gold price of $2,000 per oz.
Gold production in 2024 is forecasted to range between 110,000 to 125,000 gold ounces with production
more weighted to the second half of the year due to mining in the higher grade southern zone of the
mining permit. Mining was confined to the northern zone of the mining permit in the first half of the year
with staged access to higher-grade southern pits (Siga East and Siga South) planned in the second half as
Phases II and III of the resettlement action plan (“RAP”) progress. Mining in the Siga East pit commenced
in June 2024 and will continue to ramp up through Q3 -2024. Haul roads to Siga South are in place and
grade control drilling is being advanced in key areas with mining scheduled in Q4-2024.
AISC per ounce sold for 2024 is estimated to fall within the range of $1,300/oz to $1,375/oz. AISC per
ounce sold in H2-2024 is forecasted to be materially lower than H1-2024 as mining advances south to Siga
East and Siga South thereby accessing softer ne ar surface oxide ore at higher grades resulting in better
gold production and operating costs. In addition, grid availability is expected to now continue at normal
high levels in H2-2024 (as evidenced by grid availability in excess of 95% in July 2024) re sulting in higher
mill throughput and lower power costs.
BOMBORÉ GOLD MINE (100% BASIS) – OPERATING HIGHLIGHTS
Q2-2024 Q2-2023 H1-2024 H1-2023
Safety
Lost-time injuries frequency rate per 1M hours 0.00 0.00 0.00 0.00
Personnel-hours worked 000s hours 1,322 1,037 2,372 1,965
Mining Physicals
Ore tonnes mined tonnes 1,966,547 1,927,753 4,369,080 4,132,809
Waste tonnes mined tonnes 3,451,757 3,152,264 6,574,856 5,534,399
Total tonnes mined tonnes 5,418,305 5,080,017 10,943,936 9,667,208
Strip ratio waste:ore 1.76 1.64 1.50 1.34
Processing Physicals
Ore tonnes milled tonnes 1,428,396 1,400,160 2,784,015 2,845,853
Head grade milled Au g/t 0.64 0.87 0.71 0.92
Recovery rate % 86.8 91.1 88.0 91.7
Gold produced Au oz 25,524 35,482 55,663 76,783
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Q2-2024 Q2-2023 H1-2024 H1-2023
Unit Cash Cost
Mining cost per tonne $/tonne 3.29 2.86 3.38 2.89
Mining cost per ore tonne processed $/tonne 8.87 6.46 8.46 6.49
Processing cost $/tonne 9.19 10.72 9.21 9.95
Site general and admin (“G&A”) cost $/tonne 3.96 3.73 3.87 3.47
Cash cost per ore tonne processed $/tonne 22.02 20.91 21.54 19.91
Cash Costs and AISC Details
Mining cost (net of stockpile movements) $000s 12,672 9,050 23,539 18,467
Processing cost $000s 13,120 15,006 25,640 28,328
Site G&A cost $000s 5,654 5,217 10,788 9,883
Refining and transport cost $000s 136 164 253 312
Government royalty cost $000s 4,595 3,930 9,727 8,842
Gold inventory movements $000s (1,625) (2,299) (209) (280)
Cash costs1 on a sales basis $000s 34,552 31,068 69,738 65,552
Sustaining capital $000s 3,281 4,308 7,299 7,838
Sustaining leases $000s 73 - 146 187
Corporate G&A cost $000s 2,319 1,883 4,388 3,614
All-In Sustaining Costs 1 on a sales
basis $000s 40,225 37,259 81,571 77,192
Gold sold Au oz 24,937 33,608 56,166 76,747
Cash costs per gold ounce sold1 $/oz 1,386 924 1,242 854
All-In Sustaining Costs per gold ounce
sold1 $/oz 1,613 1,109 1,452 1,006
1 Non-IFRS measure. See “Non-IFRS Measures” section for additional details.
Bomboré Production Results
Q2-2024 vs Q2-2023
Gold production in Q2 -2024 was 25,524 ounces, a decline of 28% from the 35,482 ounces produced in
Q2-2023. The lower gold production is attributable to a 26% decrease in head grades and a 5% decrease
in plant recoveries, partially offset by a 2% increase in plant throughput. The better head grades achieved
in Q2-2023 were primarily the result of processing high-grade stockpiles accumulated during the Phase I
construction, which were fully depleted by June 2023 , and from the sequencing of higher -grade pits in
earlier periods of the mine plan. Plant recoveries were lower in Q2 -2024 primarily due to the greater
blend of transition ore in the mill feed as mining deepens in certain pits. The presence of transition ore
results in slightly lower metallurgical recoveries and additional plant maintenance due to the harder
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nature of the ore. In addition, instability in operational controls from grid power interruptions unrelated
to Bomboré operations contributed to a marginal dip in recoveries in Q2-2024.
Plant downtime caused by grid blackouts and power dips, and time lost to switch to back-up gensets, also
negatively impacted plant operations in Q2-2024. In response, the Company successfully improved hourly
plant throughput by increasing mill power draw and reducing residence time in the CIL circuit without a
noticeable effect on recovery rates, leading to a monthly record of 525K tonnes processed in June 2024.
Plant throughput, head grades, and recoveries are expected to improve from a greater blend of softer
oxide ore as mining continues to ramp up at Siga East in Q3-2024. Furthermore, reliability of the national
grid has significantly increased since the start of July 2024.
H1-2024 vs H1-2023
Gold production in H1-2024 was 55,663 ounces, a decline of 28% from the 76,783 ounces produced in H1-
2023. The lower gold production is attributable to a 23% decrease in head grades, a 4% decrease in plant
recoveries, and a 2% decrease in plant throughput namely for the same reasons as explained in the above
section.
Bomboré Operating Costs
Q2-2024 vs Q2-2023
AISC per gold ounce sold in Q2-2024 was $1,613, a 45% increase from $1,109 per ounce sold in Q2-2023.
The higher AISC is primarily the result of: (a) lower Q2-2024 gold production and sales as explained above;
(b) greater per ounce royalty costs from new royalty rates that took effect in October 2023, coupled with
a higher realized selling price; and (c) increased mining costs with deeper pits, harder transition ore being
mined and higher strip ratio per tonne processed.
Cash cost per ore tonne processed in Q2-2024 was $22.02 per tonne, an increase of 5% from $20.91 per
tonne in Q2 -2023. The higher cash cost in Q2 -2024 was predominantly due to greater mining and site
G&A costs with costs per ore tonne processed increasing by 37% ($8.87 versus $6.46) for mining and 5%
($3.96 versus $3.73) for site G&A. Mining costs have increased as lower benches are mined resulting in
longer hauls and more transition material that requires drill -and-blast prior to excavation and greater
rehandle prior to feeding into the dump pocket on the ROM pad. In addition, unit mining costs have
increased from a higher strip ratio and more management fees from the mobilization of a second mining
contractor in July 2023 to supplement material movement of the main mining contractor. Site G&A costs
reflect greater spending for security as the Company expands its operations into the southern portion of
the mining permit.
Processing costs per ore tonne in Q2-2024 was $9.19 per tonne, a decrease of 14% from $10.72 per tonne
in Q2-2023. Unit processing costs were expected to decline by over $3 per tonne in Q2 -2024 from 2023
levels upon the introduction of grid power to the Bomboré mine at the end of January 2024; however, the
power cost savings from using grid power have been offset by a greater blend of transition ore requiring
higher per tonne consumption of power, grinding media, and main reagents, and more plant maintenance
to address higher equipment wear. Furthermore, the mine relied on more self -generated power
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beginning in March 2024 from lower-than-expected grid availability directly impacted by issues with the
Ghanian and Côte d’Ivoire supply systems as explained above. Grid utilization was historically low in Q2-
2024, but gradually improved throughout the quarter from 18% in April to 58% in June, and normalizing
to over 95% starting in July.
H1-2024 vs H1-2023
AISC per gold ounce sold in H1-2024 was $1,452, a 44% increase from $1,006 per ounce sold in H1-2023.
The higher AISC were due namely for the same reasons as explained in the above section.
Bomboré Growth Capital Projects
Grid Power Connection
The commissioning of the powerline to connect Bomboré to Burkina Faso’s national energy grid
commenced in January 2024 and was successfully energized by the end of the same month. As of June
30, 2024, the Company has incurred costs of $19.7M, of which $0.3M was incurred in Q2-2024 ($1.4M in
H1-2024). The Company continues to make minor upgrades to the grid connection by installing
equipment and software to reduce the transfer time to back-up gensets.
RAP Phases II and III
RAP Phases II and III involve the construction of three new resettlement communities (MV3, MV2, and
BV2) in order to relocate households currently residing within the southern half of the Bomboré mining
permit. The Company sequenced MV3 first, followed by MV2 and BV2, to prioritize mining areas closest
to the processing plant.
The construction of homes and relocation of families to the new MV3 resettlement community were
successfully completed in Q2 -2024, and in parallel, construction of MV2 commenced with site
establishment activities and award of contracts to local companies. Compensation payments to affected
residents for loss of land, crops, trees, and private structures continue to progress.
As of June 30, 2024, the Company has incurred project-to-date costs of $18.6M for RAP Phases II and III,
of which $5.0M was incurred in Q2-2024 ($8.1M in H1-2024).
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 c ash 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 IFRS. 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 , 2024 which is
incorporated by reference herein.
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CONFERENCE CALL AND WEBCAST
The condensed consolidated interim 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. Orezone
will host a conference call and audio webcast to discus s 2024 second quarter results on
August 7, 2024 at 8:00am PT (11:00am ET).
Webcast
Date: Wednesday, August 7, 2024
Time: 8:00 am Pacific time (11:00 am Eastern time)
Please register for the webcast here: Orezone Q2-2024 Conference Call and Webcast
Conference Call
Toll-free in U.S. and Canada: 1-800-715-9871
International callers: +646-307-1963
Event ID: 9401780
QUALIFIED PERSONS
The scientific and technical information in this news release was reviewed and approved by Mr. Rob
Henderson, P. Eng, Vice -President of Technical Services and Mr. Dale Tweed, P. Eng., Vice-President of
Engineering, both 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 West African gold producer engaged in mining,
developing, and exploring its 90% -owned flagship Bomboré Gold Mine in Burkina Faso. The Bomboré
mine achieved commercial production on its Phase I oxide operations on December 1, 2022, and is now
focussed on its staged Phase II hard rock expansion that is expected to materially increase annual and life-
of-mine gold production from the p rocessing of hard rock mineral reserves. 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 entitled Bomboré Phase II Expansion, Definitive Feasibility Study is available on
SEDAR+ and the Company’s website.
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