Orezone Gold (TSX: ORE; US-OTC: ORZCF) has secured US$105 million in funding commitments to expand its flagship Bombor? gold mine in Burkina Faso, which achieved commercial production in late 2022.
The funding comprises a US$58 million three-year loan from Coris Bank International, its current senior lender, and a US$47 million private placement with Nioko Resources, a strategic investor in the company, who will purchase about 92.7 million shares of Orezone at 70? each.
"(The financing package) sets a clear path forward for Bombor? to realize a substantial hard rock life of mine," which includes a renewed focus on exploration and discovery, Orezone CEO Patrick Downey said.
"With a greater than 14-km long mineralized trend, drilled to an average depth of approximately 200 metres, we see substantial upside to further expand the project's current stated mineral resources of 4.5 million oz. in measured and indicated, and 600,000 oz. in inferred," he added.
Orezone's stock traded at 68? apiece at mid-day on the TSX, for an intraday gain of 3%. Its market capitalization is estimated at $247.9 million.
With this financing, the Canadian gold miner said the hard rock expansion at Bombor? is now fully funded, and its construction has been approved by its board of directors.
The Bombor? mine, the 16th producing mine in Burkina Faso, is currently producing from the first-phase oxide plant at an above-nameplate capacity of 5.9 million tonnes per year (Mtpa). Last October, Orezone released a feasibility study for an expansion that incorporates a 4.4 Mtpa hard-rock plant to boost the total processing rate of 10.3 Mtpa.
The new standalone processing facility will enable Bombor? to produce significantly more gold at a lower incremental capital cost. The company estimates that its annual gold production will increase to over 170,000 oz. in 2026, an approximate 50% increase from current levels.
The capital cost for the second phase expansion is estimated at US$85 million, which is lower than the US$167.5 million shown in the 2023 feasibility study. Orezone expects to deliver first gold from the expansion in late 2025.
According to the 2023 study, the addition of a hard-rock plant could extend Bombor?'s mine life to 11.3 years with total gold production of 2.1 million oz. and all-in sustaining cost of US$1,121 per ounce.