Orezone defines resources in Burkina Faso

VANCOUVER–With four advanced-stage gold projects on the go in Burkina Faso, news keeps on coming from Orezone Resources (OZN-T, OZN-X), including a recently updated resource estimate for its Bondi project.

The new estimate for Bondi, which lies in the southeast of Burkina Faso, pegs measured and indicated resources at 4.14 million tonnes grading 2.12 grams gold per tonne; inferred resources add 2.54 million tonnes grading 1.84 grams gold.

The estimate boosts measured and indicated resources at the project by 73% and ups inferred resources by 333%, compared with the last estimate from November 2004. At Bondi, mineralization extends to an average depth of 125 metres and is contained within three contiguous zones: Zone 2, Zone 2 North, and Zone 2 South. The zones lie on a 5-km-long, north-south-striking corridor; Orezone continues to explore along strike and at depth, where several of the zones remain open.

The 924-sq.-km project is located in Burkina Faso’s Hound greenstone belt, some 275 km southwest of the capital Ouagadougou.

The company’s flagship project, Essakane, sits in the northern tip of Burkina Faso. It took a significant step forward on the last day of February when the federal government passed a law granting Orezone an industrial mining permit for the project.

Orezone CEO Ron Little says that, with the permit in hand, the company can now focus on completing the due diligence for its US$250- million project loan and move towards beginning construction. The company hopes to achieve production by 2010.

Orezone completed a definitive feasibility study for Essakane in August. The study envisioned an 18-month construction period for a mine built to mill 5.4 million tonnes a year to produce 292,000 oz. gold annually. Capital costs are estimated at US$346 million. Essakane hosts reserves of 2.65 million oz. gold using a gold price of US$500 per oz.

An updated version of the feasibility study, expected in the next few weeks, will include revised reserve estimates at higher gold prices, an increased plant throughput plan for the earlier years of production, and recent capital cost adjustments. In addition, the government of Burkina Faso recently reduced its corporate tax rate for mining companies to 20% from 25%.

And the company is not yet finished drilling at Essakane. It recently started a 5,000-metre infill and deep drilling program, focused on upgrading inferred resources and testing the depth potential of the deposit. At present, the main limit to the depth of the pit — given the current price of gold — is the depth of drilling; Orezone hopes to increase resources by going deeper.

And in mid-February, Orezone released an updated resource estimate for another of its advanced exploration- stage projects, Bombore. The 250-sq.-km project sits 80 km east of Ouagadougou, encompassing a southwest-northeast-striking greenstone belt. In the mid-1990s, Channel Resources (CHU-V) and Solomon Resources (SRB-V, SLRLF-O) spent $2.5 million to define a historic, 1-million-oz. gold resource.

Orezone’s recent report, the first National Instrument 43-101-compliant estimate for the project, pegs indicated resources at 29.6 million tonnes grading 0.61 gram gold and inferred resources at 23.8 million tonnes grading 0.66 gram gold. Mineralization extends to an average depth of 60 metres.

The resources are contained in five zones that lie within the Bombore geochemical anomaly. The gold-in-soil anomaly extends for more than 14 km averaging 0.1 gram gold per tonne, making it the largest gold anomaly in the country.

The company began a 6,000- metre core drilling program in December and plans to follow it immediately with a 20,000-metre reverse-circulation program in the second quarter. Orezone holds a 50% interest in Bombore and can increase its interest to 100%, minus a 1% net smelter royalty, by completing a feasibility study and making a $1-million cash payment.

At the Sega gold project, 200 km north of Ouagadougou, Orezone is at the scoping study stage. Drill results out in late December attested to the project’s growth potential. A 6,500-metre drill program confirmed or enhanced previous results and produced new discoveries at two of the project’s four zones.

Drilling in the Bakou zone intersected several high-grade zones downdip from the boundary of known mineralization, including hole 46, which returned 24 metres of 3.11 grams gold from 159 metres depth and hole 47, which hit 21 metres grading 2.29 grams gold from 107 metres.

At the Gambo zones, the better results included 9 metres of 3.22 grams gold from 36 metres depth in hole GRC911, and several mineralized intervals in hole G2D052, including 9 metres of 2.45 grams gold from 115 metres. At Tiba, hole TID058 returned 29.5 metres grading 3.31 grams gold from 14 metres, followed by 11 metres of 2.42 grams gold from 46.5 metres.

All zones remain open at depth. Sega currently hosts 7.15 million

indicated tonnes grading 1.94 grams gold and 1.32 inferred tonnes grading 1.5 grams gold. A technical scoping study recommended a heap-leach operation with a throughput of 3,000 tonnes per day. An initial capital cost estimate came in at US$12.7 million.

As though gold exploration wasn’t keeping the company busy enough, in early February Orezone announced that it has joined forces with North Atlantic Resources (NAC-T, NOATF-O) to form a new uranium exploration company focused on Niger.

The new entity, named Brighton Energy, will take on Orezone’s wholly owned subsidiary, Niger Resources, which hold two permits near Areva’s exploration permits and operational uranium mines. North Atlantic will transfer to Brighton its wholly owned subsidiary, Selier Energy Niger, which holds three permits in the same area. All together, the new company will control 4,000 sq. km in the centre of Niger’s uranium production region.

Orezone fell slightly on news of the Bondi resource estimate, closing down 9 at $1.56. The company has a 52-week trading range of $1.10-2.29 and has 356 million shares issued.