Orezone Gold (TSX: ORE; US-OTC: ORZCF) announced Thursday that its Bombor?(C) gold mine in Burkina Faso has now entered commercial production.
"Commercial production at Bombor?(C) is a significant milestone and transforms the company to producer status. We congratulate the Bombor?(C) team for their excellent execution in achieving this goal," Patrick Downey, president and CEO of Orezone, said in a news release.
With this announcement, Bombor?(C) now becomes the 16th mine to go into production in Burkina Faso. Management plans to provide annual guidance for Bombor?(C) in January 2023.
Located 85 km east of the capital city of Ouagadougou, the Bombor?(C) property is host to a large free-digging oxide resources underlain by higher-grade sulphide resources. Orezone owns a 90% interest in the mine project, with the government of Burkina Faso retaining a 10% carried interest.
Commercial production means the mine has achieved 30 consecutive days of mill throughput exceeding 70% of its nominal nameplate capacity of 14,250 tonnes per day and gold recoveries have reached design levels of 90%.
A feasibility study published in 2019 outlined a long-life, low-cost (US$153 million) open pit gold mine for Bombor?(C), highlighted by an after-tax net present value (at 5% discount rate) of US$361 million and internal rate of return of 43.8% with a 2.5-year payback.
Orezone has only been focused on mining the Phase I near-surface oxides and processing them as a carbon-in-leach operation at a planned annual throughput of 5.2 million tonnes. However, the company believes that Bombor?(C)'s underlying sulphide resource could support a substantial expansion.
A 77,000-metre infill and expansion drill program currently underway will feed into an updated resource and feasibility study for the planned expansion. Orezone expects these studies to be completed during the first half of 2023, and a production decision will follow.
Shares of Orezone Gold jumped 6.3% by 12:15 p.m. in Toronto, placing its market capitalization at $451.5 million.