Burkina Faso – The Council of Ministers of the Burkina Faso Government has approved the mining permit application submitted by Orezone Gold Corporation’s local subsidiary, Orezone Bomboré SA, at a recent cabinet session held on 11 August 2016.
Receipt of the formal mining permit and related mining convention from the Burkina Faso tax department (fiscal and tax policy for the permit) are expected in the coming months.
“This is a major milestone for our team and the Bomboré project, including all of its stakeholders.
“This completes the permitting process and allows us to focus on the time line to construction and building up our operating management team,” says Orezone CEO Ron Little.
With a treasury of over C$30 million, Orezone is well positioned to complete the detailed engineering and all time-sensitive tasks to ensure the project is “shovel ready” for the start of construction in the send quarter of 2017.
In parallel, the company continues to work on securing the required project financing on the most favorable terms.
Favourable project economics
The feasibility study completed in the second quarter of 2015 for a Phase 1 oxide-only heap leach and combined carbon-in-leach circuit with a capacity of 5.5 Mtpa is expected to produce 135 000 ozpa over the first eight years.
The study indicates robust project economics including an after tax return of 24% at a US$1 250/oz gold price, an NPV (5%) of $196 million and a 2.7 year payback.
The estimated capital required to build the project is $250 million including all working capital, contingencies and an owner operated new fleet of equipment.
Current measured and indicated resources at Bomboré include 2 Moz (67 Mt) of oxide material at 0.9 g/t averaging 45m in depth and over 2.6 Moz (73 Mt) of sulphide material at 1.1 g/t.
The average depth of drilling to date is only 120 m but the sulphide resource reaches depths of up to 200 m (where localised drilling extends to these depths) within the optimised pit shells that constrain the resource.
Orezone has been reviewing the feasibility study with other experienced engineering firms and is optimistic it can further reduce the initial capital expenditures up to 10% by staging some of the construction and deferring those costs into the sustaining capital.
Since the feasibility study was completed, the project also benefits from improved currency exchange ratios (drop in the Euro which is at a fixed ratio to the local Cfa currency), lower fuel prices, and lower consumable prices.
The company is also working on a resource update that includes an additional 50 000 m of infill drilling.