Ottawa, Canada — MININGREVIEW.COM — 02 June 2008 – Orezone Resources Incorporated – an exploration company and emerging gold producer – has shown an increase of almost 20% in recoverable reserves at its Essakane gold project in Burkina Faso, and is boosting both plant capacity and production at the mine substantially.
Announcing an update to its definitive feasibility study here, the company revealed that its recoverable reserves had risen by 18% from 2.5Moz at 1.78 g/t to 3.0Moz at 1.67 g/t, using a US$600 gold price as compared to US$500.
The announcement added that the CIL plant capacity at Essakane had been increased by close to 40% from 5.4Mtpa to 7.5Mtpa to enable softer oxide ores to be processed at a higher rate for the first few years of operation. Annual production would increase by 16% to an average of 330 000 oz pa for the first four years, and a faster project payback would result. Peak year would be the first year with 374 000 oz, and mine life had been increased from 8.5 to 9.4 years.
The update also revealed that capital costs had increased by 21% from US$347 million (R2.6 billion) to US$420 million (R3.2 billion) as a result of increased plant capacity; increased allowances for contingencies and owner’s costs; changes in US/Euro exchange rates; and general inflation.
It added that cash costs, including royalties and government charges, had decreased slightly and were expected to be US$358 per ounce, using an US$800 gold price and $US85 oil price. Every dollar change in the oil price would represent approximately a one dollar change in cash costs.
The update confirmed that the time line for construction remained at 18 months. All long lead items, including the grinding circuit, the fleet and generators, had been ordered with expected delivery dates in time for a start-up in early 2010.
“We are very pleased with the results of the update,” said Orezone CEO Ron Little. “Even though capital expenditures have increased, the net result is a larger and more robust project with a much higher NPV. Our goal is to continue to run the plant at higher capacity well past the first few years by focusing on the known satellite oxide deposits,” he added.