Orezone awards EPCM contract for Bombore, expects binding debt financing shortly

Phase I resettlement around Bombore Credit: Orezone

Developer Orezone Gold has awarded the engineering, procurement and construction management (EPCM) contract for its open pit Bombore project in Burkina Faso to Lycopodium Minerals. The emerging gold producer has its sights set on a first gold pour in the third quarter of 2022.

In the project development update, the company also notes that project debt negotiations, which would cover a ‘major’ portion of the project construction budget are “advancing rapidly and smoothly.” After site visits were completed, Orezone signed a non-binding term sheet in December and expects to announce binding debt commitments later this month.

The developer has also completed a tender process and assessed the proposals for a mining contract for the site. Orezone anticipates to award the open pit mining contract early this year, which would allow the selected contractor to start pre-production mining by the end of the first quarter.

Orezone has also received bids for a build-own-operate power plant and expects to award the contract in the first quarter of 2021.

The release notes that Lycopodium has an “excellent track record of delivering projects on time and on budget in West Africa.”

In the brief, Patrick Downey, Orezone’s president and CEO, also highlights that Lycopodium completed both the 2018 feasibility study and the 2019 updated feasibility study for Bombore and previously completed front-end engineering and design for the site.

Village and infrastructure relocation is also complete, which will allow access to areas required for the preparation of process and surface infrastructure, mining and the tailings storage facility.

Orezone has a 90% stake in Bombore. A 2019 feasibility study defined a staged project, starting with a free-digging oxide operation with carbon-in-leach extraction. In the third year of operations, a sulphide circuit would be incorporated with a separate equipment fleet mining this material with drilling and blasting. The resulting 13-year open pit, producing an average of 117,760 oz. per year at AISCs of US$730 per oz., delivers an after-tax net present value of US$361 million, at a 5% discount rate, with an initial construction cost of US$153 million for the oxide phase based on US$1,300 per oz. gold.

For more information, visit www.Orezone.com.

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