Orezone’s drills continue to turn at new gold mine in Burkina Faso

Earlier this month Orezone Gold (TSX: ORE; US-OTC: ORZCF) kicked off commercial production at its open pit Bombore gold mine in central Burkina Faso, but its drills continue to explore the underlying sulphides at the mine for a larger Phase II expansion.

The company is undertaking a 77,000-metre infill and expansion drill program at the mine, 85 km east of the capital city of Ouagadougou, and once completed, plans to issue an updated resource and reserve statement.

Workers organizing samples at Orezone Gold’s Bomboré gold project in Burkina Faso in 2015. Credit: Orezone Gold.

It also intends to release a feasibility study as part of the Phase II expansion in the second half of 2023, followed by a production decision, the company says.

Today, Orezone released results from its Phase III resource definition drill program from three zones at Bombore: Maga Hill, Maga Main and Siga, with highlights of 21 metres grading 5.35 grams gold per tonne at Maga Hill starting from 150 metres in hold BBD1220.

Other results from Maga Hill included 7.20 metres grading 8.50 grams gold from 124 metres downhole in BBD1246, including 1.20 metres of 48.27 grams gold.

Drilling at Siga returned 4 metres of 5.82 grams gold from 87 metres in BBD1157, including 1 metre of 19.79 grams gold; 29 metres of 1.11 grams gold from 205 metres in BBD1186; and 32.45 metres of 1.17 grams gold starting from 213.80 metres in BBD1199.

The “positive drill results show potential for future upside,” mining analyst Michael Fairbairn of Canaccord Genuity wrote in a research note. “While we do not believe today’s results change Orezone’s fundamental story, definition drilling at Maga and Siga does help increase our confidence in the orebody both in terms of contained ounces and the potential for higher grade material to be brought into the mine plan with the next resource update.”

“Notably, several of the intercepts released today are significantly higher grade than Orezone’s existing global 4.0 million oz. sulfide resource grading 0.80 gram per tonne gold and 2.17 million oz. oxide resource grading 0.53 gram gold per tonne.”

Orezone owns 90% of Bombore with the government of Burkina Faso retaining a 10% free-carried interest.

The mine, where first gold was poured in September, is adjacent to a major highway with nearby power and water. A 2019 feasibility study forecast average annual production of 118,000 oz. gold per year over a 13-year mine life at an all-in sustaining cost of US$730 per ounce.

According to the company’s latest corporate presentation, major shareholders include RCF with 20%; Equinox (Mason Hill) with 7% and Van Eck with 5%. Management owns 5%.

Over the last year, Orezone has traded in a range of $1.04 and $1.81 and at presstime in Toronto was $1.25 per share.

The gold miner has about 334 million common shares outstanding for a market cap of roughly $418 million.

Cannacord’s Fairbairn has a price target on the stock of $3.25 per share.