Orezone Gold Corporation announced on 9 August 2023 in Vancouver, its operational and financial results to 30 June 2023.
Patrick Downey, President and CEO, commented: “The Bomboré mine produced gold in another strong trimester, allowing the Company to reduce debt by a further 19.1 million dollars while maintaining a healthy cash balance. Grades were lower than modelled during the first half of 2023, as we encountered greater depletion intensity in some near-surface, mined high-grade ore zones. As a result, we now expect 2023 gold production to be at the lower end of our forecast range, with a modest increase in guidance.”
On electricity supply: “As part of our initiatives, we are making progress with the groundwork to connect to Burkina Faso’s national grid, and we remain on track to receive electricity from the grid before the end of the year. Once this has been achieved, we will significantly reduce the cost of electricity, which is currently generated by diesel generators leased from a third party. In addition, the feasibility study for Phase II of our hard rock expansion is nearing completion and the results of the study are due to be published at the end of September,” added Patrick Downey.
Highlights of the second trimester 2023
The Company’s second trimester production is estimated at 35,482 ounces of gold. It recorded zero lost-time accidents for 1,037,000 man-hours worked. On the financial side, it reported revenues of 66.4 million dollars, operating profits of 27.5 million dollars, free cash flow of 8.0 million dollars and a capital repayment of 19.1 million dollars under the Coris Bank senior credit facility.
The Bomboré mine made its first gold pour on 10 September 2022 and declared commercial production on 1 December 2022. Plant throughput decreased slightly compared to the first trimester. The decrease in plant availability is the result of routine maintenance for the installation of new mill linings in April 2023 and the replacement of worn shafts at the end of May 2023. All planned major maintenance work has now been completed for 2023 and plant throughput is expected to return to record levels.
Forecasts for 2023
The company is forecasting gold production in 2023 at the lower end of its guidance range, i.e. between 140,000 and 155,000 ounces, with production costs per ounce of gold sold of between 1,010 and 1,110 dollars. The mining contractor is currently about 10% behind plan in terms of moving material, which has delayed access to the higher-grade ore zones. A second mining contractor, currently on site to assist with the expansion of the tailings storage facility, has been hired on a temporary basis to improve extraction volumes and catch up to plan by the end of 2023.
As mining deepens in some pits, the amount of transition ore begins to increase. The presence of transition ore results in slightly lower metallurgical recoveries and the generation of additional slag in the ball mill, which must be recirculated to obtain the required size fraction. As a result, the plant’s recovery rates were slightly lower in the second trimester than in the first.
The production cost per ounce of gold sold was 1,109 $, an increase of 20% compared with the first trimester of 2023. The increase was mainly due to a combination of lower grades and lower throughput at the plant.
Coris bank ready to finance extension
The Company has held preliminary discussions with its lead lender, Coris Bank, regarding its participation in the future Phase II expansion. Coris Bank has indicated that it is supportive of the expansion and the Company intends to enter into more formal discussions with Coris Bank once information on the new economics of the expansion and capital requirements are better known.
Pierre Balma
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