Orezone Receives Mining Permit for Bombore
Current market conditions and design changes can improve project economics
OTTAWA, ONTARIO--(Marketwired - Aug 12, 2016) - Orezone Gold Corp. (TSX VENTURE:ORE) is pleased to announce that the Council of Ministers of the Burkina Faso Government has approved the mining permit application submitted by the Company's local subsidiary Orezone Bomboré SA for its Bomboré Gold Project at a recent cabinet session held on Thursday August 11, 2016.
"This is a major milestone for our team and the Bomboré 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 CEO 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 Bomboré 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.
About Orezone Gold Corporation
Orezone is a Canadian company with a successful gold discovery track record and mine development experience in Burkina Faso, West Africa. The Company owns a 100% interest in Bomboré, the largest and now fully permitted undeveloped oxide gold deposit in West Africa, situated 85 km east of the capital city, adjacent to an international highway. The Company has completed a Feasibility Study, has received all environmental approvals and expects to be in a position to make a production decision in 2017 pending completion of a full project financing.
Tim Miller, COO, Pascal Marquis, SVP and Ron Little, CEO of Orezone, are Qualified Persons under National Instrument 43-101 and have reviewed the information in this release. Readers should refer to the annual information form of Orezone for the year ended December 31, 2015 and other continuous disclosure documents filed by Orezone since January 1, 2016 available at www.sedar.com, for this detailed information, which is subject to the qualifications and notes set forth therein.
FORWARD-LOOKING STATEMENTS AND FORWARD-LOOKING INFORMATION: This news release contains certain "forward-looking statements" within the meaning of applicable Canadian securities laws. Forward-looking statements and forward-looking information are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "potential", "possible" and other similar words, or statements that certain events or conditions "may", "will", "could", or "should" occur. Forward-looking statements in this release include statements regarding, among others; a treasury of over C$30M, receiving the formal mining permit and related mining convention, raising funding to start construction at Bomboré during Q2 2017, potential lower initial capital costs and completion of a resource update.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.