Bomboré Gold Project Detailed Feasibility Study July 10, 2018

Transcription

1 Bomboré Gold Project Detailed Feasibility Study July 10, 2018 All figures in US Dollars on 100% project basis

2 Forward Looking Statement This Presentation may contain forward-looking information which may include, but is not limited to, statements with respect to: political conditions and government regulations in foreign countries; timing of the receipt of governmental approvals and/or acceptances; targets, estimates and assumptions in respect of gold future gold production and prices; amount and type of future capital expenditures and capital resources; mineral reserves and mineral resources; anticipated grades; recovery rates; future financial or operating performance; costs and timing of the development of new deposits; costs, timing and location of future drilling; earning of future interests in various permits; production decisions; costs and timing of construction; project economics; operating expenditures; costs and timing and nature of future exploration; and environmental and reclamation expenses. Often, but not always, forward-looking statements can be identified by the use of words such as plans, expects, is expected, budget, scheduled, estimates, forecasts, intends, anticipates, or believes or variations (including negative variations) of such words and phrases, or state that certain actions, events or results may, could, would, might or will be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company and/or its subsidiaries and/or its affiliated companies to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include risks related to changes in, and volatility of, the price of gold; risks associated with operating in foreign jurisdictions; the speculative nature of gold exploration and development projects; permitting and title risks; risks relating to potential changes to governmental regulation; risks associated with the accuracy of mineral resource and reserve estimates; risks related to the fact that the Company has a history of losses and expects to incur losses for the foreseeable future; risks related to the reliance on the Company s management team and outside contractors; risks related to drill shortages; risks associated with sample backlogs at assay laboratory facilities; risks related to the Company s ability to finance the exploration and development of its mineral properties; risk relating to misrepresentations; uncertainties related to title to the Company s mineral properties; risks relating to health concerns; environmental risks; operational risks and hazards inherent in the mining industry; risks associated with the potential inability to maintain available infrastructure; risks related to the potential unavailability of insurance to cover certain risks; risks related to increased competition in the mining industry; risks related to currency fluctuations; risks related to the fact the Company does not intend to pay dividends in the foreseeable future; risks that shareholders interest in the Company may be diluted in the future; factors that have historically made the Company s share price volatile; risks for United States investors associated with possible PFIC status, as well as those risk factors identified in the Company s publicly filed disclosure documents available at Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of the applicable public record document which the information is derived from and the Company has disclaimed any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements due to the inherent uncertainty therein. Qualified Persons Pascal Marquis, Geo., Senior Vice President of Exploration, Tim Miller, Chief Operating Officer, Chem., MBA, and Patrick Downey, P.Eng, Chief Executive Officer are the Company s qualified person under NI , who have reviewed and verified the technical information in this presentation. The independent Qualified Persons responsible for the Feasibility Study, on which the NI technical report will be based, are Neil Lincoln, P. Eng. of Lycopodium Minerals Canada Ltd.; Alan Turner, CEng MIMMM., of AMC Consultants; Tom Kerr, M.Sc, of Knight Piésold; Jean-Sébastian Houle, P.Eng., of WSP Canada Inc Mineral Resources: The 2017 Mineral Resources disclosures in this presentation have been prepared under the supervision of Jose Texidor Carlsson P.Geo. and Tudorel Ciuculescu, P.Geo., both employees of RPA and independent of Orezone. Messrs. Carlsson and Ciuculescu are Qualified Persons for the purpose of National Instrument The Mineral Resources have been classified in accordance with CIM Definition Standards for Mineral Resources and Mineral Reserves (May, 2014). The technical reports have been filed on SEDAR and can be reviewed at Picton Avenue, Suite 201, Ottawa, Ontario, Canada K1Z 8P8 - Tel: (613) / Toll: (888) Melville Street, Vancouver, British Columbia, Canada V6E 3V6 - Tel: (778) / Toll: (888) / info@orezone.com 2

3 Feasibility Study Technical Summary Simple Conventional Low Cost Shallow, free-dig open pit truck and shovel mining operation Simple processing circuit: Single stage grinding ball mill 7-stage carbon-in-leach (CIL) Standard Zadra gold recovery circuit Tailings stored in lined facility constructed in stages from mine waste Independent CIL Feasibility Study led by: Lycopodium Study Management Plant and Infrastructure Overall Capex and Plant Opex Contributions from: WSP Environmental and Resettlement Action Plan AMC Engineering Mine Planning and Mine Opex Knight Piesold Consulting Tailings and Water Management RPA Inc. Mineral Resources 3

4 Feasibility Study Financial Highlights The Bomboré Feasibility Study with simplified flow sheet provides robust project economics High Returns Short Payback Period Pre-Tax NPV 5% of $315.3m, IRR of 59.4%, 1.3 year payback After-tax NPV 5% of $224.5m, IRR of 42.6%, 1.7 year payback Significant Production Low Capital Intensity LOM production of 1,024,239 gold ounces ~13 year mine life Average gold production of 102,613 oz in the first 7 years Initial construction cost estimated at $143.7 million Strong Margins Low Sustainability Cost LOM cash costs of $677/oz, $445/oz for first 3 years LOM AISC of $746/oz, $485/oz for first 3 years LOM Sustaining capital costs of $58.9 million 4

5 Burkina Faso Gold Endowment A Great Place to Build a Mine Past producer Gold Mine (2P+M&I+Produced) Gold Deposit (2P+M&I) Orezone Bomboré (M&I) km Mali Banfora 3.0 Moz Tongon 3.8 Moz Cote d Ivoire Mana 6.2 Moz Yaramoko 0.8 Moz Houndé 2.5 Moz Karankasso South Houndé Konkera 1.9 Moz Bondi 0.3 Moz Karma 2.6 Moz Kalsaka 1.0 Moz OUAGADOUGOU Poura 1.0 Moz Ghana Inata 2.7 Moz Taparko/Bouroum 1.6 Moz Bomboré 4.8 Moz Balogo Markoye Fault Bissa/Bouly 5.5 Moz Sanbrado 1.3 Moz Kiaka 4.8 Moz Youga 1.4 Moz Essakane 7.0 Moz Bongou Togo Natougou 1.5 Moz Nabanga Niger An emerging district Samira Hill 2.5 Moz Benin 5

6 Local Infrastructure Key to Logistics and Development Orezone office Access Road Ouagadougou 85 km Mogtedo Dam Power Line 132 KVA Camp Bomboré Camp Komadanisi Bomboré Property 10 km Current Mine Plan Ouaga Office Located 85 km from the Capital City along a major highway Excellent infrastructure with majority of support facilities in place camp, offices, warehouse facilities at property located 9 km from town of Mogtedo with a population of 15,000 6

7 Bomboré Gold Resources (NI ) Category Tonnes (millions) Jan 5, 2017 Resource Statement (constrained to a $1400 pit shell) Grade (Au g/t) Gold Content (ounces) Oxidized M&I g/t ,487,000 Oxidized Inferred g/t ,000 Sulphide M&I g/t ,208,000 Sulphide Inferred g/t ,000 Total Measured & Indicated to 0.50 g/t ,695,000 Total Inferred to 0.50 g/t ,000 Low Grade Oxidized M&I to 0.45 g/t ,000 Low Grade Sulphide M&I to 0.50 g/t ,000 Total Measured & Indicated to ,770,000 CIM definitions were followed for Mineral Resources. Mineral resources are not mineral reserves and do not have a demonstrated economic viability. Mineral Resources are estimated at variable cut-off grades depending on weathering layer and location, using a long-term gold price of US$ 1,400 per ounce. A minimum mining width of approximately 3 m was used. Bulk density vary by material type. Numbers may not add due to rounding. Average depth of Oxidized resources is 45 m Average depth of all drilling is only 120 m; Open at depth and along strike 7

8 Study Focus Free Dig Oxide Zone Gold mineralization continues at depth into sulphides Siga South Deposit Section 10600N Phase 1 shallow oxide only pit Average depth 45 m Phase 2 Sulphide Pit OPEN 8

9 Key Technical Details 24 Month Construction Schedule, Including RAP Mining Processing Water & Tailings RAP Free-dig, contractor mining using excavators and 30t & 50t road trucks Mine plan optimized to bring forward higher grades in early years and processing of stockpiles at end of mine life Mill throughput of 4.5mm tpa, Mill sized for expansion Single stage grind, ~70-80% below 150µ with no grinding required 24 hour CIL followed by gold recovery in Zadra strip Leach train designed for easy expansion Tailings thickened to 48% solids, water reclaim by decant tower TSF built using compacted mine waste thereby reducing cost and simplifying mine closure Water supply by diversion channel to early excavated pit All RAP activities planned to be completed prior to initial start-up therefore reducing resettlement risk 9

10 Simplified Site Layout Low Grade Stockpile 10

11 Simplified Flow Sheet 11

12 3-D Plant Layout Area for potential new tank Current Mine Plan 12

13 Low-cost, High-margin Oxide Gold Project: AISC of US$746/oz over 13-year mine life 406koz at AISC of US$485/oz over the first 3 years of production 180,000 $1, , ,373 $1,269 $1, , , , , ,495 92,050 $778 $803 $863 $883 $1,050 $1, ,953 $1,000 $800 80,000 60,000 40,000 $423 $522 $524 $653 77,253 74,736 68,745 66,052 57,659 56,685 $600 $400 20,000 $200 - Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Years 11 to 13 Au production in oz AISC/oz $- 13

14 Production and Grade Profile % 93.9% % 92.5% % % 88.1% % 86.8% % 84.9% 81.4% Pre-prod. Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Years 11 to Recovered gold, koz Head grade (g/t) Recovery rate (%) 14

15 DFS Base Cost Economics Base Case (100% Basis) 1 Unit Years 1 to 3 LOM Material moved Mt Waste moved Mt Ore moved Mt Strip ratio (waste:ore) Total ore processed Mt Annual ore processed Mt Au grade g/t Au recoveries % 93.1% 89.1% Annual Au production oz 135,193 81,325 All-in Sustaining Costs US$/oz $ 485 $ 746 Initial capital cost 2 US$M $ Sustaining capital cost US$M $ 58.9 Net present value (pre-tax) US$ $ Net present value (post-tax) US$ $ IRR (pre-tax) % 59.4% IRR (post-tax) % 42.6% Payback period years 1.7 Mine life years Base Case = US$1,275/oz Au price; 5% discount rate 2 Includes pre-production gold credits 15

16 Initial Capital Costs Area Unit Project Total Construction Indirects US$M $ 13.2 Treatment Plant US$M $ 34.7 Reagent and Plant Services US$M $ 10.6 Infrastructure US$M $ 16.2 Mining (contract mining) US$M $ 1.1 EPCM Management US$M $ 11.6 Owners Project Costs (including RAP) US$M $ 45.8 Plant & Mine Construction (excl contingency) US$M $ Contingency US$M $ 10.5 Plant & Mine Construction (with contingency) US$M $ Commissioning Sales & Operating Costs Pre-production revenue US$M $ (31.2) Pre-production operating costs US$M $ 8.5 Working Capital Ore stockpiles US$M $ 32.7 Opening stock US$M $ 1.0 Pre-commercial production initial capex US$M $ Ore stockpiles Mt 6.1 Exchange rates CFA per USD USD per Euro

17 Operating Cost Breakdown Department Unit LOM Average Mining (contract mining) US$/t $ 4.59 Processing US$/t $ 4.92 Site G&A US$/t $ 1.68 Total Operating Cost per Ore Tonne US$/t $ Mining cost per tonne moved US$/t $ 1.72 (includes stockpile rehandling) Based on the following key inputs: LFO (Diesel) price US$/L $ 1.05 Heavy Fuel Oil price US$/L $ 0.62 DDO (Distillate) price US$/L $ 0.77 Build Own Operate Power costs US$/kwh $ 0.19 Exchange rates XOF per USD USD per Euro

18 Sensitivity Table Gold Price ($/oz) 1,100 1,200 Base Case 1,275 1,300 1,400 NPV After-Tax (5%) ($M) IRR After-Tax 28.6% 36.5% 42.6% 43.5% 51.7% 18

19 Project Construction Schedule Task Name Q Q Q Q Q Q Q Q Q Q4 Resettlement Action Plan Mine Development Tailings Storage Facility (TSF) Stage 1 Process Plant Detailed Engineering Procurement Construction Commissioning Process Plant Ramp Up First Gold Pour 19

20 Enhancement Opportunities Enhancement Opportunities Could Significantly Improve Bomboré s Already Robust Economics Additional CIL Tank TSF Optimization Additional Drilled-off M&I Resources High Grade Sulphides Increase processing capacity to 5.2M tpa from 4.5M tpa increasing annual gold production Reduce the need for low-grade stockpiling and re-handle Reduction of waste storage allows optimized design of tailings Reduce sustaining capital due to lower dam height Areas within mining lease hosting gold are not yet permitted Ministers have approved plans Orezone is moving towards final permits to mine these resources Recent drilling indicated potential higher-grade shallow sulphides Scoping study to mine and feed higher grade sulphides with addition of small crushing plant Exploration Conversion of Inferred to M&I within the current mining permit Drilling indicates oxides extend into surrounding exploration permits 20

21 Addition of one CIL tank will enhance pro-forma annual gold production Production Brought Forward 21

22 TSF Capex Reduction Green outline shows potential extended footprint Limits of Currently Planned TSF 22

23 SARL 2018 Regional Exploration Targets KT KT 4.0 gpt 7.0 gpt 1.6 gpt 14.3 gpt 3.8 gpt P gpt 2.0 gpt 2.7 gpt 1.7 gpt 5.1 gpt P13 P17N P17S P17S 2.1 gpt 5.0 gpt 2.5 gpt 2.7 gpt 2.3 gpt gpt 3.8 gpt 5.3 gpt 3.8 gpt 2.1 gpt 2.5 gpt gpt 5.2 gpt 23

24 Resources in Restricted Zones Currently, significant M&I drilled off oxide resources are within Restricted Zones per circled areas Discussions have been held with relevant authorities on plan to reactivate these areas for mining Plans accepted and approved, and permitting now in process. Approval will improve grade profile and add to gold production and mine life. 24

25 High-Grade Ore Shoot Definition Program HG oxide and shallow sulfide targets 4 target areas 12,171 m RC 3,756 m core drilling ongoing results pending Q2 18 programs P11 Target Area 6.4 gpt 4.2 gpt 22.9 gpt 6.6 gpt 3.5 gpt Maga North Target Area 10.3 gpt 15.1 gpt 7.9gpt 4.2 gpt Maga Hill Area gpt 7.3 gpt gpt 5.4 gpt 10.4 gpt Siga East Target Area 4.1 gpt 10.8 gpt 5.8 gpt gpt 25

26 High Grade Chutes into deeper Sulphides Siga West Pit Shell P11 Pit Shell Siga East Pit Shell 500 m Isometric view (looking N250) of the Siga E-P11 current resource pit shells and folded granodiorite unit. The hypothesis of moderate to shallow fold hinges and sub-parallel highgrade gold mineralized shoots should be tested, first with tighter (25 m x 25 m) RC drilling within the weathered zone, and then, if the concept is confirmed, by core drilling to define the down-plunge extensions within the sulfide zone. 26

27 Next Steps Complete review of tailings and plant optimization work and release when complete. Commence Phase 1 Resettlement Action Plan in H tender contract currently out for bids. Finalize model for high grade zones and update resources which will include resources in the Restricted Zones. Negotiate and award EPCM contract and commence detailed engineering. Advance discussions on project financing alternatives. Strengthen team at corporate and local level for next stage of development - ongoing. 27

28 Capital Structure Capital Structure (as of July 6, 2018) - ORE.TSXV Shares Issued M Shares Fully Diluted M Cash (no debt) C$51.0 M Market Cap C$170 M Key Shareholders Management and Directors 4.51% Strategic Shareholders: Resource Capital Funds VII L.P % Coris Capital S.A. 1.78% 28

29 Experienced Team Management Years Experience Patrick Downey, P.Eng President & CEO, Director 35 Peter Tam CPA CFO 25 Pascal Marquis Ph.D., Geo SVP Exploration (Previously Agnico) 30 Tim Miller Chem, MBA COO (Previously Goldcorp, Glamis) 30 Joe McCoy MBA VP Administration & Corporate Secretary 35 Louis Archambeault VP Corporate Development 15 Board Members Mike Halvorson Previously Director of Viceroy, Nova Gold, Novus, Gentry 40 Joe Conway Previously CEO Iamgold, Primero, RePadre 35 Ron Batt Previously Senior Partner at Ernst & Young 35 Charles Oliver Previously Gold Sector Fund Manager for over 30 years 35 Steve Axcell SVP Jacobs Engineering, MD Debswana 35 Kate Harcourt International Environmental Consultant 25 Marco LoCascio Portfolio Manager for Mason Hills 11 29

30 Tel: / Toll Free: info@orezone.com / 30