Orezone gets $10 million for exploration

Orezone Gold (ORE-T) is raising $10 million in a bought-deal financing to fund exploration and development work at its projects in West Africa.

The gold explorer has entered into an agreement with Canaccord Financial and CIBC World Markets whereby it will issue $10 million in common shares at a price of 75¢ each. Orezone shares were unchanged today at 80¢ apiece on a trading volume of 500,000 shares.

Canaccord has the option to buy an additional $1.5 million in shares for gross proceeds of $11.5 million.

Orezone has projects in Burkina Faso and Niger.

Just yesterday, Orezone announced a resource update for its Sega project in Burkina Faso after completing 8,050 metres of reverse-circulation drilling and 4,400 metres of diamond drilling.

Indicated resources now stand at 8.3 million tonnes grading 1.69 grams gold per tonne for 450,000 oz. gold, just slightly higher than the last estimate, reported a year ago.

Inferred resources stand at 2.9 million tonnes grading 1.58 grams gold per tonne for 147,000 oz., up from 64,000 oz. gold.

In addition to the drill program, Orezone also undertook a quality control program, re-logging all of its previous RC and diamond drill holes to further refine and standardize the geological model. The company says the geological model is now more robust and can be used in a scoping study with a higher degree of confidence than last year’s model.

Orezone’s goal is to advance Sega to the feasibility stage for an eventual small heap leach operation similar to the nearby Kalsaka mine owned by Cluff Gold (CFG-T, CLF-L).

But in the near term, Orezone plans to complete a scoping study that focuses on the near-surface oxide and semi-oxidized ores that represent about half of the total resources.

The scoping study will include metallurgical tests and heap leach column tests on both the oxidized, semi-oxidized and sulphide ores.

Orezone’s project with the largest resource is the Bombore deposit, also in Burkina Faso.

Bombore has measured and indicated resources of 49.4 million tonnes grading 0.59 gram gold per tonne for 927,000 oz. gold and inferred resources of 64.1 million tonnes grading 0.61 gram gold per tonne for 1.23 million oz. gold.

(Bombore resources are constrained within in a US$800 Whittle pit shell with a cutoff of 0.24 gram gold per tonne for the oxide material, 0.25 gram gold for the transition material and 0.52 gram gold for the fresh material.