Orezone secures $105 million funding for Bomboré mine expansion

Orezone Gold (TSX: ORE) has secured $105 million in funding commitments for the second-phased expansion of its flagship Bomboré gold mine in Burkina Faso, which achieved commercial production in late 2022.

The funding comprises a $58 million three-year loan from Coris Bank International, its current senior lender, and a $47 million private placement with Nioko Resources, a strategic investor in the company, who will purchase approximately 92.7 million shares of Orezone at C$0.70 each.

By 11:00 a.m. ET, Orezone Gold’s stock traded at C$0.68 apiece on the TSX, for an intraday gain of 3.0%. Its market capitalization is estimated at C$249.8 million ($183.5 million).

With this financing, the Canadian gold miner said the Phase II hard rock expansion at Bomboré is now fully funded, and its construction has been approved by its board of directors.

The Bomboré mine is currently producing from the Phase I oxide plant at an above-nameplate capacity of 5.9 million tonnes per annum (Mtpa). In October 2023, 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 Bomboré 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 Phase II expansion is estimated at $85 million, which is lower than the $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 Bomboré’s mine life to 11.3 years with total gold production of 2.11 million oz., with all-in sustaining cost of $1,121/oz.

Patrick Downey, CEO of Orezone, said the financing package “sets a clear path forward for Bomboré to realize a substantial hard rock life of mine,” which includes a renewed focus on exploration and discovery.

“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.