Orezone Gold (TSX: ORE) announced Thursday that its Bomboré gold mine in Burkina Faso has now entered commercial production, having achieved 30 consecutive days of mill throughput exceeding 70% of nominal nameplate capacity of 14,250 tonnes per day and recovery reaching design levels of 90%.
“Commercial production at Bomboré is a significant milestone and transforms the company to producer status. We congratulate the Bomboré team for their excellent execution in achieving this goal,” Orezone CEO Patrick Downey said in a news release.
With this announcement, Bomboré now becomes the 16th mine to go into production in Burkina Faso. Management plans to provide an annual guidance for Bomboré in January 2023.
Located 85 km east of the capital city of Ouagadougou, the Bomboré 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.
A feasibility study published in 2019 outlined a long-life, low-cost open-pit gold mine for Bomboré, highlighted by an after-tax net present value (at 5% discount rate) of $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 Bomboré’s underlying sulphide resource could support a substantially larger Phase II expansion.
A 77,000-metre infill and expansion drill program is currently underway, and once completed, an updated mineral resource and feasibility study will be issued as part of this Phase II 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 C$451.5 million ($335m).