Highlights
- Realizes value for silver not included in the 2019 feasibility study – The value of the silver is not included in the 2019 Bomboré feasibility study due to a lack of assay data. This streaming deal now unlocks that value while allowing the Company to participate in the remaining 50% silver values;
- Provides immediate cash for exploration at Bomboré – The upfront sale of the silver stream will allow the Company to conduct exploration drilling on near-term oxide targets and newly identified high-grade sulphide targets;
- Does not impact project debt package of the Bomboré project – The previously announced debt financing package is based solely on the gold economics and does not incorporate the silver;
- Stream buyback at Orezone’s option – Orezone retains the option to buy back 50% of the silver stream thereby maintaining additional exposure to the metal in a rising commodities environment.
“We are very pleased to announce this silver stream transaction with EURO. The Bomboré project offers tremendous exploration potential and merits further drilling and this transaction provides immediate funds for such work. Despite the lack of comprehensive silver assay data for the Bomboré project, current management has always been aware of the presence of silver and recent work with EURO has provided a platform to unlock this value. This non-dilutive source of capital is a very positive outcome for our shareholders and will allow us to continue demonstrating the exploration potential of Bomboré during project construction. I am also pleased to complete this unique deal with EURO, whose team is very familiar with
Key Terms of
The definitive silver purchase agreement (the “Stream Agreement”) will be with Orezone’s
- EURO will make a cash payment of
US$7,150,000 to Orezone on closing as consideration for the purchase of 50% of the payable silver produced at Bomboré for life of mine. - Orezone is to deliver a minimum annual payment equivalent to 37,500 ounces of silver to EURO commencing from the date of commercial production for Bomboré. Should there be a shortfall in the annual silver deliveries, Orezone will make an initial catch-up payment only on the later of: (a) the fifth anniversary from the date of the initial silver delivery under the Stream Agreement and (b) repayment of senior secured term loan for development of Bomboré, to ensure the aggregate minimum annual payment has been satisfied for each of the preceding years. Thereafter, Orezone will make catch up payments, if required, on an annual basis until the cumulative delivery or payment of 375,000 ounces of silver after which the minimum annual payment guarantee will no longer apply. Orezone will provide a parental guarantee to EURO in favour of its
Burkina Faso subsidiary to secure its obligations under the Silver Stream. - If, within the first five years of the life of mine, Bomboré’s sulphide processing plant achieves an average throughput rate 50% above the 2019 feasibility study design capacity, Orezone has the right to buy back 50% of the Silver Stream from EURO for
US$7,150,000 . - EURO has a right of first refusal, for the life of mine, over any further silver production from Bomboré that has not been purchased by EURO pursuant to the Silver Stream.
- The completion of the Silver Stream is subject to standard precedent conditions for a transaction of this nature.
Exploration Potential
The primary objective of the previous drilling at Bomboré was to bring the main shear zone to the Measured and Indicated categories to support a feasibility study and subsequent project financing in a cost-effective manner. With Bomboré being fully financed, this silver stream transaction allows the Company the opportunity to perform additional drilling to investigate further expansion potential on the project.
Targets include:
- Extension Drilling – Additional drilling between known mineralized zones to establish continuity
- Infill Drilling – Converting near-pit oxide and sulphide inferred resources to M&I to incorporate into the mine plan
- Regional Drilling – Numerous prospective targets have been identified on the exploration claims
Extension drilling to confirm continuity between mineralized zones
The Bomboré project spans over 13kms and is yet to be fully defined. Several isolated mineralized zones are believed to be continuous but have not been drilled sufficiently to confirm such continuity. Two such zones identified as high priority drill targets are the P17 sulphide zone and the hanging wall oxide zone at Maga.
P17 - P17S Gap - Figure 1
This high priority exploration target was discovered late in project development and recent drilling has defined high-grade sulphide resources1 at P17S. Unlike the main moderately dipping shear zone of the project, the P17S and P17 zones are plunging folded granodiorite bodies with grades more than double that of the overall average grade for the project. Drilling just to the north of the P17S reserve pit indicates that the orebodies are still open and that repeat folding is evident and trending towards the surface at P17, 1.2kms to the north.
Drilling at the P17 zone also returned excellent intercepts and there is a large untested gap between these two areas. The objective of future drilling will be to infill this large, underexplored area and expand the high-grade resources and reserves.
Figure 1: P17 - Plan View of Prospective Exploration Potential - https://www.globenewswire.com/NewsRoom/AttachmentNg/2f232559-4ce6-4bd5-8092-8fe9ebce7dd3
Maga Oxides – Figure 2
The Maga area in the northern end of the Bomboré mining permit has both oxide and sulphide drill targets. The oxide targets in the hanging wall were previously inaccessible prior to the recent relocation of families to their new resettlement villages. Shallow RC drilling in this area will focus on establishing continuity between oxide pits along this strike extent of approximately 2kms of previous wide-spaced drilling. Limited previous drilling together with auger drilling and historic artisanal gold workings all outside of current reserve pits, provide strong indication that the mineralized structures hosting the current reserves display good lateral continuity and are very prospective to expand these reserves.
Figure 2:
Infill drilling to convert Inferred resources to Measured and Indicated
High-grade sulphide inferred mineralized zones are located directly below or along strike of several sulphide pits in the current mineral reserves, and previous drilling suggests that these zones are both wide and continuous at Siga South where the sulfide zone definition drilling is most advanced. Orezone has identified 3 main target areas for sulphide resource drilling: Maga, Siga South and
Table 1: Significant drill intercepts from inferred blocks outside of reserve pits
Deposit | Hole # | From (m) | To (m) | Length (m) | Grade (g/t gold) |
BBC2329 | 41.00 | 46.00 | 5.00 | 2.19 | |
43.50 | 63.00 | 19.50 | 6.06 | ||
208.00 | 215.00 | 7.00 | 3.23 | ||
BBC4555 | 56.00 | 63.00 | 7.00 | 2.11 | |
69.00 | 73.50 | 4.50 | 3.86 | ||
BBC4549 | 57.00 | 64.00 | 7.00 | 2.07 | |
BBC4788 | 63.00 | 70.00 | 7.00 | 2.19 | |
Siga South | 157.00 | 175.00 | 18.00 | 1.73 | |
89.00 | 123.50 | 34.50 | 1.18 | ||
122.50 | 169.00 | 46.50 | 1.35 | ||
167.00 | 213.50 | 46.50 | 1.13 | ||
157.00 | 196.00 | 39.00 | 1.75 | ||
184.00 | 211.00 | 27.00 | 1.01 | ||
214.00 | 230.50 | 16.50 | 1.80 | ||
153.00 | 193.50 | 40.50 | 1.20 | ||
117.00 | 129.00 | 12.00 | 14.52 | ||
142.00 | 161.50 | 19.50 | 1.74 | ||
BBC4506 | 40.00 | 55.00 | 15.00 | 7.54 | |
174.00 | 187.00 | 13.00 | 1.58 | ||
105.00 | 113.00 | 8.00 | 5.88 | ||
150.00 | 160.00 | 10.00 | 1.55 | ||
97.50 | 111.00 | 13.50 | 3.50 | ||
65.00 | 76.00 | 11.00 | 2.62 | ||
66.00 | 76.00 | 10.00 | 3.76 |
* True widths for
** True widths for
Regional drilling for mine life extension
Orezone has 14,547 hectares of exploration claims surrounding its mining lease with numerous prospective targets that have been identified. Future drilling is also warranted on these targets.
Project Debt Package
The Company is progressing with documentation on the Senior Debt Facility and its
About EURO
EURO is a French company whose main assets are a royalty on the
EURO has approximately 62.5 million shares outstanding. At
The 2019 feasibility study highlights Bomboré as an attractive shovel-ready gold project with forecasted annual gold production of 118,000 ounces over a 13+ year mine life at an All-In Sustaining Cost of
President and Chief Executive Officer
Manager, Investor Relations
Tel: 1 778 945 8977 / Toll Free: 1 888 673 0663
info@orezone.com /www.orezone.com
Qualified Persons
Dr.
For further information please contact Orezone at +1 (778) 945-8977 or visit the Company’s website at www.orezone.com.
Neither
Cautionary Note Regarding Forward-Looking Statements
This press release contains certain information that may constitute “forward-looking information” under applicable Canadian securities legislation. Forward-looking information in this press release relates to statements with respect to the closing of the Stream Agreement and the use of proceeds including exploration at P17, P17S and the Maga oxides. Additional forward-looking information relates to the Company’s strategic plans, future operations, future work programs, capital expenditures, and corporate and technical objectives. Forward-looking information is necessarily based upon a number of assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information, including the risks inherent to the recent COVID-19 pandemic, the mining industry, adverse economic and market developments and the risks identified in Orezone’s annual information form under the heading “Risk Factors”. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. All forward-looking information contained in this press release is given as of the date hereof and is based upon the opinions and estimates of management and information available to management as at the date hereof. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
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1 P17S contains Measured and Indicated resources of 1.7Mt grading 2.11 g/t gold for 116,000 ounces of gold.
Please see Orezone’s NI 43-101 Technical Report (Amended) Feasibility Study of the Bomboré
Bomboré Gold Project : P17 - Plan View of Prospective Exploration Potential
Bomboré Gold Project : P17 - Plan View of Prospective Exploration Potential
Bomboré Gold Project : Maga Hill - Plan View of Prospective Exploration Potential
Bomboré Gold Project : Maga Hill - Plan View of Prospective Exploration Potential
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