Gold

Orezone Gold Corporation (TSX:ORE) has received approval from the council of ministers of the Burkina Faso government for the mining permit application submitted by the company’s local subsidiary Orezone Bombore SA for its Bombore gold project at a recent cabinet session held on Thursday, Aug. 11, 2016.

Orezone Gold Corporation (TSX:ORE) has received approval from the council of ministers of the Burkina Faso government for the mining permit application submitted by the company’s local subsidiary Orezone Bombore SA for its Bombore gold project at a recent cabinet session held on Thursday, Aug. 11, 2016.
“This is a major milestone for our team and the Bombore project, including all of its stakeholders. This completes the permitting process and allows us to focus on the time line to construction and building up our operating management team,” said Orezone chief executive officer Ron Little. Receipt of the formal mining permit and related mining convention from the Burkina Faso tax department (fiscal and tax policy for the permit) are expected in the coming months. With a treasury of over C$30M, the Company is well positioned to complete the detailed engineering and all time-sensitive tasks to ensure the project is “shovel ready” for the start of construction in Q2 2017. In parallel, the Company continues to work on securing the required project financing on the most favorable terms.
The feasibility study completed in Q2 2015 for a Phase 1 oxide-only heap leach and combined CIL circuit with a capacity of 5.5 Mt/yr is expected to produce 135,000 oz per annum over the first eight years. The study indicates robust project economics including an after tax return of 24% at a US$1250 gold price, an NPV5% of US$196M and a 2.7 year payback. The estimated capital required to build the project is US$250M including all working capital, contingencies and an owner operated new fleet of equipment. Current measured and indicated resources at Bombore include 2Moz (67Mt) of oxide material at 0.9 g/t averaging 45m in depth and over 2.6Moz (73Mt) of sulphide material at 1.1 g/t. The average depth of drilling to date is only 120 m but the sulphide resource reaches depths of up to 200 m (where localized drilling extends to these depths) within the optimized pit shells that constrain the resource.
The Company has been reviewing the feasibility study with other experienced engineering firms and is optimistic it can further reduce the initial capital expenditures up to 10% by staging some of the construction and deferring those costs into the sustaining capital. Since the feasibility study was completed, the project also benefits from improved currency exchange ratios (drop in the Euro which is at a fixed ratio to the local Cfa currency), lower fuel prices, and lower consumable prices. The Company is also working on a resource update that includes an additional 50,000 m of infill drilling. This ongoing technical work may not be published as an updated NI43-101 compliant document unless the Company considers the net changes to be material to the current phase I mine plan and or overall economics of the project.
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