All dollar amounts are in USD unless otherwise stated and abbreviation "M” means million.
VANCOUVER, British Columbia, Nov. 05, 2024 (GLOBE NEWSWIRE) -- Orezone Gold Corporation (TSX: ORE, OTCQX: ORZCF) ("Orezone” or "Company”) reported its operational and financial results for the three and nine months ended September 30, 2024. The Company will host a conference call and webcast on November 6, 2024 commencing at 8:00am PT to discuss its quarterly and year-to-date performance, and outlook for the remainder of the year, including commentary on the progress of its Phase II hard rock expansion and early success on its multi-year, discovery-focus drilling campaign. Call access and webcast details are provided at the end of this press release.
Patrick Downey, President and CEO, commented, "The third quarter provided a number of positive developments for our Bomboré Mine. Operationally, mining access was opened up in the Siga pits and grid power returned to normalized levels, both of which will ensure ongoing improved gold production and costs in Q4-2024. We generated solid free cash flow during the quarter and continued to pay down debt and advance the Phase II hard rock expansion which will set the path for Bomboré to increase annual gold production by 50% within the next 12 months. We also commenced our multi-year exploration program with the first two diamond drill holes from the current campaign returning robust results, with broad and above-average grade mineralization to 240 metres below the current pit limit, validating our belief that with further targeted drilling, Bomboré can grow into a 7 to 10 million ounce orebody.
With unhedged gold sales at record prices continuing into the fourth quarter, we forecast generation of continued strong operating cashflow that will help support the Phase II expansion construction. The $58M Phase II term loan previously announced with Coris Bank is advancing and is expected to close in the coming weeks.”
2024 THIRD QUARTER HIGHLIGHTS AND SIGNIFICANT SUBSEQUENT EVENTS
| (All mine site figures on a 100% basis) | Q3-2024 | Q3-2023 | 9M-2024 | 9M-2023 | |||
| Operating Performance | |||||||
| Gold production | oz | 26,581 | 30,726 | 82,244 | 107,509 | ||
| Gold sales | oz | 27,698 | 29,167 | 83,864 | 105,914 | ||
| Average realized gold price | $/oz | 2,473 | 1,910 | 2,280 | 1,922 | ||
| Cash costs per gold ounce sold1 | $/oz | 1,410 | 1,152 | 1,297 | 936 | ||
| All-in sustaining costs1 ("AISC”) per gold ounce sold | $/oz | 1,655 | 1,306 | 1,519 | 1,088 | ||
| Financial Performance | |||||||
| Revenue | $000s | 68,652 | 55,803 | 191,680 | 203,911 | ||
| Earnings from mine operations | $000s | 22,340 | 13,882 | 72,389 | 81,042 | ||
| Net income attributable to shareholders of Orezone1 | $000s | 4,984 | 5,194 | 25,620 | 39,134 | ||
| Net income per common share attributable to shareholders of Orezone1 Basic Diluted |
$ $ |
0.01 0.01 |
0.01 0.01 |
0.07 0.06 |
0.11 0.11 | ||
| Adjusted EBITDA1 | $000s | 25,756 | 19,163 | 72,175 | 93,334 | ||
| Adjusted earnings attributable to shareholders of Orezone1 | $000s | 7,365 | 3,588 | 18,427 | 39,398 | ||
| Adjusted earnings per share attributable to shareholders of Orezone1 | $ | 0.02 | 0.01 | 0.05 | 0.11 | ||
| Cash and Cash Flow Data | |||||||
| Operating cash flow before changes in working capital | $000s | 18,888 | 16,474 | 53,876 | 82,839 | ||
| Operating cash flow | $000s | 24,043 | 6,978 | 29,677 | 66,059 | ||
| Free cash flow1 | $000s | 14,120 | (4,024 | ) | (818 | ) | 35,490 |
| Cash, end of period | $000s | 66,900 | 27,711 | 66,900 | 27,711 | ||
- Safety: Continued strong safety performance with 1.31M and 3.68M hours worked without a lost-time injury for Q3-2024 and 9M-2024, respectively.
- Liquidity: Free cashflow generation of $14.1M in Q3-2024 despite the continued build-up of VAT receivables and Phase II Expansion capital expenditures in the quarter. Cash stood at $66.9M at September 30, 2024, increases of $55.5M from June 30, 2024 and $47.4M from December 31, 2023, respectively.
- Gold Production and Costs: Gold production of 26,581 ounces at an AISC of $1,655/oz as a result of an above-average strip ratio due to mine sequencing, and drawdown of lower-grade stockpiles due to heavy rainfall events restricting pit access during the quarter combined with higher-than-budgeted government royalties from a better realized gold price.
- Siga Pits Mining Extension: Mining at Siga East ramped up in Q3-2024 after the relocation of households to the new MV3 resettlement site in June 2024 while mining at Siga South commenced in August 2024. The Q4-2024 mine plan calls for greater mill delivery of higher-grade ore tonnes from the Siga pits as mining productivity and material movement are forecasted to improve with the end of the rainy season and the recent expansion of the contractor mining fleet. Two new heavy-duty excavators and twenty new haul trucks were mobilized to site at the end of October and were placed into service at the start of November. As a result, quarterly gold production is expected to be the highest in Q4-2024 as demonstrated by the production of 12,096 gold ounces in October.
- Phase II Hard Rock Expansion ("Phase II Expansion”) Approval: The Company announced on July 10, 2024 that its Board of Directors had approved the Phase II Expansion after securing over $105M in new debt and equity for the construction. On August 8, 2024, the Company completed the issuance of 92,743,855 common shares at a share price of C$0.70 for net proceeds of C$64.8M ($47.3M). Concurrently, the Company is working on closing its XOF 35.0 billion ($58M) senior secured loan ("Phase II Term Loan”) with Coris Bank International ("Coris Bank”) in November 2024. The draft loan agreement with Coris Bank is in final form and the Company is now arranging for intercreditor consents from the convertible debenture holders for this additional senior debt.
- Phase II Expansion Early Achievements: Expansion activities are advancing ahead of schedule while committed costs are tracking on budget. The Company has placed over 50% of all packages, including CIL tank platework and 95% of all process equipment, including the purchase of a new, pre-owned 9MW 26' diameter SAG mill. For site activities, all bulk earthwork is complete, and the laydown area is ready to receive deliveries. Rapid progress on major site contracts such as concrete will see these contracts awarded early, thereby adding further float to the schedule for first gold. For the 9M-2024, the Company has expended $9.8M on both early works and the on-going Phase II Expansion, and expects to expend a further $9M - $12M in Q4-2024 as the Company rapidly advances the expansion towards first gold in Q4-2025.
- Multi-year Exploration Campaign Commencement: The Company initiated a 30,000 m, multi-year discovery focused drill program designed to test the broader size and scale of the Bomboré mineralized system with the goal of increasing the Bomboré global resource to 7M to 10M gold ounces. Results from the first two drill holes at the North Zone intercepted mineralization 240 m below the current reserve pit limit, including 1.67 g/t gold over 46.00 m, demonstrating the continuity of the mineralized system at depth, both in terms of grade and overall width (see the Company's October 10, 2024 news release). Additional drill results from the next round of drilling are set for release before the end of 2024.
- Better Grid Power Availability: Availability of grid power normalized in Q3-2024 with the national grid supplying 92% of Bomboré mine's power needs, up significantly from Q2-2024 when grid power provided only 34% of power consumption.
- Debt Reduction: Scheduled principal repayments of XOF 3.0 billion ($5.0M) were made in Q3-2024 on the Company's Phase I senior loan with Coris Bank.
| Operating Guidance (100% basis) | Unit | Original 2024 Guidance | Revised 2024 Guidance | 9M-2024 Actuals | ||
| Gold production | Au oz | 110,000 - 125,000 | Unchanged | 82,244 | ||
| All-In Sustaining Costs123 | $/oz Au sold | $1,300 - $1,375 | $1,400 - $1,475 | $1,519 | ||
| Sustaining capital2 | $M | $14 - $15 | Unchanged | $11.7 | ||
| Growth capital - non Phase II Expansion2 | $M | $16 - $17 | Unchanged | $13.2 | ||
| Growth capital - Phase II Expansion early works2 | $M | No guidance provided | $3.6 | $3.6 | ||
| Growth capital - Phase II Expansion2 | $M | No guidance provided | $15.0 - $18.0 | $6.2 | ||
- AISC is a non-IFRS measure. See "Non-IFRS Measures” section below for additional information.
- Foreign exchange rates used to forecast cost metrics include XOF/USD of 600 and CAD/USD of 1.30.
- Government royalties of $160/oz included in original AISC guidance based on an assumed gold price of $2,000 per oz. Government royalties of $200/oz is now estimated in the revised AISC guidance from a better gold price realized.
Sustaining capital for 2024 is expected to reach the low-end of the $14M - $15M guidance range as spending in Q4-2024 will be limited mainly to the ongoing tailings storage facility ("TSF”) expansion (stage 4 lift) and completion of the new on-site explosives magazine.
Growth capital consists of two carryover projects from 2023:
(i) Power connection to Burkina Faso's national grid (9M-2024 actuals: $1.4M)
The powerline was energized in January 2024, and system commissioning of the new line and substations were completed in March 2024. Remaining equipment and software upgrades to shorten the transfer between the grid and back-up gensets, and to reduce the quantity of reactive power are expected to be implemented by year-end.
(ii) Resettlement Action Plan ("RAP”) - Phases II and III (9M-2024 actuals: $11.8M)
RAP Phases II and III commenced in 2023 and will see the construction of over 2,200 private and public structures in three new resettlement communities (MV3, MV2, and BV2) to help relocate communities occupying areas in the southern half of the Bomboré mining permit.
The Company successfully relocated families to the new MV3 resettlement site in June 2024 and is currently constructing the new MV2 resettlement site with construction progress reaching 85% at the end of Q3-2024. Relocation of households to MV2 and the start of construction works at BV2 are scheduled for in Q4-2024.
RAP spending, including costs for compensation, consultants, relocation allowances, and livelihood restoration programs, is forecasted to remain unchanged at between $15M to $16M for 2024.
BOMBORÉ GOLD MINE (100% BASIS) - OPERATING HIGHLIGHTS
| Q3-2024 | Q3-2023 | 9M-2024 | 9M-2023 | ||||
| Safety | |||||||
| Lost-time injuries frequency rate | per 1M hrs | 0.00 | 0.00 | 0.00 | 0.00 | ||
| Personnel-hours worked | 000s hours | 1,308 | 1,128 | 3,680 | 3,093 | ||
| Mining Physicals | |||||||
| Ore tonnes mined | tonnes | 1,457,631 | 2,231,360 | 5,826,711 | 6,364,169 | ||
| Waste tonnes mined | tonnes | 2,690,759 | 2,654,010 | 9,265,615 | 8,188,409 | ||
| Total tonnes mined | tonnes | 4,148,390 | 4,885,370 | 15,092,326 | 14,552,578 | ||
| Strip ratio | waste:ore | ()[\]\\.,;:\s@\"]+)*)|(\".+\"))@((\[[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\])|(([a-zA-Z\-0-9]+\.)+[a-zA-Z]{2,}))$/;return b.test(a)}$(document).ready(function(){if(performance.navigation.type==2){location.reload(true)}$("iframe[data-lazy-src]").each(function(b){$(this).attr("src",$(this).attr("data-lazy-src"))});if($(".owl-article-body-images").length){$(".owl-article-body-images").owlCarousel({items:1,loop:true,center:false,dots:false,autoPlay:true,mouseDrag:false,touchDrag:false,pullDrag:false,nav:true})}var a=$("#display_full_text").val();if(a==0){$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:$("#cms_article_id").val()},dataType:"json",success:function(b){},error:function(b,d,c){}})}$(".read-full-article").on("click",function(d){d.preventDefault();var b=$(this).attr("data-cmsArticleId");var c=$(this).attr("data-productId");var f=$(this).attr("data-href");dataLayer.push({event:"paywall_click",paywall_name:"the_manila_times_premium",paywall_id:"paywall_article_"+b});$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:b,productId:c},dataType:"json",success:function(e){window.location.href=$("#BASE_URL").val()+f},error:function(e,h,g){}})});$(".article-embedded-newsletter-form .close-btn").on("click",function(){$(".article-embedded-newsletter-form").fadeOut(1000)})});$(document).on("click",".article-embedded-newsletter-form .newsletter-button",function(){var b=$(".article-embedded-newsletter-form .newsletter_email").val();var d=$("#ga_user_id").val();var c=$("#ga_user_yob").val();var a=$("#ga_user_gender").val();var e=$("#ga_user_country").val();if(validateEmail(b)){$.ajax({url:"/ajax/sendynewsletter",type:"POST",data:{email:b},success:function(f){$(".article-embedded-newsletter-form .nf-message").html(f);$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000);dataLayer.push({event:"newsletter_sub",user_id:d,product_name:"newsletter",gender:a,yob:c,country:e})},error:function(f,h,g){}})}else{$(".article-embedded-newsletter-form .nf-message").html("Please enter a valid email address.");$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000)}});$(document).on("click",".article-embedded-newsletter-form .nf-message",function(){$(this).removeClass("show");$(this).html("")});
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