Orezone Gold Corporation (TSX: ORE) (OTCQX: ORZCF) 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

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 1.31M 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 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.

2024 Guidance for Bomboré Mine

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 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.

2024 gold production is expected to be at or above the mid-point of guidance with AISC now guided to fall within $1,400/oz to $1,475/oz, a minor increase to the original guidance, mainly due to the impact of higher power costs from the lack of grid availability in H1-2024 (~$60/oz) and from higher government royalties (~$40/oz) on better realized gold prices.

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 expansion (stage 4 lift) and completion of the new on-site explosives magazine.

Growth capital consists of two carryover projects from 2023:

1. 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.

1. Resettlement Action Plan – 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

¹ Non-IFRS measure. See “Non-IFRS Measures” section for additional details.

Bomboré Production Results

Q3-2024 vs Q3-2023

Gold production in Q3-2024 was 26,581 ounces, a decline of 13% from the 30,726 ounces produced in Q3-2023. The lower gold production is attributable to a 14% decrease in head grades and a 2% decrease in plant recoveries, partially offset by a 3% increase in plant throughput. The better head grades in Q3-2023 were from the sequencing of higher-grade pits in earlier periods of the mine plan, and greater ore release from more tonnes mined allowing for the stockpiling of lower-grade ore. Less tonnes were mined in Q3-2024 due to lower contractor equipment availability and heavier-than-average rainfall events combined with mining rates in Q3-2023 benefiting from the deployment of a second mining contractor. Pre-stripping activities at the Siga pits increased the strip ratio (1.85 vs 1.19) in Q3-2024, leading to the temporary drawdown of lower grade stockpiles to maintain mill throughput in August 2024. Plant recoveries for Q3-2024 were marginally lower from 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 nature of the ore. Plant throughput increased in Q3-2024 as the Company successfully improved hourly plant throughput by increasing mill power draw and reducing residence time in the CIL circuit without a noticeable effect of recovery rates. Plant throughput was further impacted in Q3-2024 by a ball mill reline performed at the end the quarter (no comparable mill reline in Q3-2023). This mill reline was brought forward from Q4-2024 to ensure maximum mill availability during Q4-2024 when higher-grade ore from the SIGA pits is mined.

Plant throughput, head grades, and recoveries in Q4-2024 are expected to improve quarter-over-quarter as mining ramps up at Siga East and Siga South for the full quarter, with more contribution of higher-grade, softer ore to the mill feed, and from the completion of all scheduled major plant maintenance in earlier periods of the year.

9M-2024 vs 9M-2023

Gold production in 9M-2024 was 82,244 ounces, a decline of 24% from the 107,509 ounces produced in 9M-2023. The lower gold production is attributable to a 20% decrease in head grades, a 3% decrease in plant recoveries, and a 1% decrease in plant throughput. Head grades were higher in 9M-2023 as a 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 9M-2024 mainly from a greater blend of transition ore. Plant throughput was marginally lower in 9M-2024 due to plant downtime in Q2-2024 caused by frequent grid blackouts and power dips, and time lost to switch to back-up gensets. Grid availability returned to normal levels beginning in July 2024 and with steady grid power, plant throughput is expected to reach a quarterly record in Q4-2024.

Bomboré Operating Costs

Q3-2024 vs Q3-2023

AISC per gold ounce sold in Q3-2024 was $1,655, a 27% increase from $1,306 per ounce sold in Q3-2023. The higher AISC is primarily the result of: (a) a 14% decline in Q3-2024 gold production as explained above; (b) greater per ounce royalty costs from new royalty rates that took effect in October 2023, coupled with a 29% higher realized selling price ($2,473/oz vs $1,910/oz); and (c) increased unit mining costs with deeper pits, drill-and-blast associated with harder transition ore mined, and higher strip ratio, partially offset by a reduction in power costs from the utilization of lower-cost grid energy.

Cash cost per ore tonne processed in Q3-2024 was $21.29 per tonne, a decrease of 1% from $21.57 per tonne in Q3-2023 mainly from the use of lower-cost grid power in Processing ($7.94/tonne vs $9.80/tonne) and lower site G&A costs ($3.77/tonne vs $3.98/tonne) from tight spending control, partially offset by a 23% increase ($9.58/tonne versus $7.79/tonne) in mining costs per ore tonne processed.

Mining costs have increased as lower benches are mined resulting in longer hauls and more transition material that requires some drill-and-blast prior to excavation and greater rehandle prior to feeding into the dump pocket on the ROM pad. In addition, unit costs have increased from a higher strip ratio from the pre-stripping of the Siga pits and the waste pushback to the H1 pit that experienced a minor wall failure in 2023.

Processing costs per ore tonne have benefitted from the introduction of grid power to the Bomboré mine in February 2024 with power cost per tonne dropping to $2.80/tonne in Q3-2024 from $4.94/tonne in Q3-2023, a decrease of $2.14/tonne. Further savings in power costs were offset by a greater blend of transition ore requiring higher per tonne consumption of power and from the rental and use of back-up diesel gensets to supply power when the grid was unavailable. Grid utilization dramatically improved in Q3-2024 at 92% versus 34% in Q2-2024 when issues with the supply system in Ghana and Côte D’Ivoire temporarily reduced the export of power into Burkina Faso. Processing costs in Q3-2024 was also impacted by higher maintenance costs from the ball mill reline.

9M-2024 vs 9M-2023

AISC per gold ounce sold in 9M-2024 was $1,519, a 40% increase from $1,088 per ounce sold in 9M-2023. The higher AISC were due namely for the same reasons as explained in the above section.

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 cash 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 nine months ended September 30, 2024 which is incorporated by reference herein.

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 discuss 2024 third quarter results on November 6, 2024 at 8:00am PT (11:00am ET).

Webcast
Date: Wednesday, November 6, 2024
Time: 8:00 am Pacific time (11:00 am Eastern time)
Please register for the webcast here: Orezone Q3-2024 Conference Call and Webcast

Conference Call

Toll-free in U.S. and Canada: 1-800-715-9871

International callers: +646-307-1963

Event ID: 9776163

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 proceeding with its staged Phase II hard rock expansion that is expected to materially increase annual and life-of-mine gold production from the processing 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.