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'We're producing now' - Orezone Gold's Patrick Downey charts growth plans

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(Kitco News) - Despite a series of political upheavals in West Africa, Orezone Gold CEO Patrick Downey said there has been no impact upon company operations.

Downey spoke to Kitco mid-September at the Precious Metals Summit 2023 held in Beaver Creek, Colorado.

Orezone Gold (TSX:ORE) is a Burkina Faso miner that expects to produce between 140,000 and 155,000 ounces of gold in 2023 at an all-in-sustaining cost between $1,100 and $1,180 per ounce. The company is targeting 250,000 ounces per year mid decade after the company wraps up brownfield expansion.

There have been nine coups across Africa in the past three years, reports Bloomberg. Niger, which shares a border with Burkina Faso saw its democratically-elected government overthrown by the military this summer.

Interview edited for clarity.

Kitco Mining: What is Orezone?

Downey: Orzone is a mining company mining in West Africa, Burkina Faso in particular. We're a producing mine now. We built the mine on time under budget in 2022. 2023 is our first year of production and it's been going extremely well. Our all-in-sustaining costs are around $1,100. So we're really pleased and we're planning an expansion to go to 250, 000 ounces a year.

Kitco Mining: What’s your expansion plans?

Downey: The expansion is very simple, very similar to what we just built. It's a hard rock operation. The first part was oxides, but it's got the same heap leach circuits. We're putting a sag mill and a jaw crusher in front of it—and that's basically it.

Capital intensity in West Africa normally is about $85 to $95 per tonne per year to process. We will be around $35 to $40—so about half of what it costs to build a green fields plant. Our neighbors are West African Resources. They're producing about 220, 000 ounces a year. They're building Kiaka, but another 40 kilometers to the southeast of us. So that whole belt will have three producing mines producing around 700, 000 ounces a year in two years time. If that was Nevada, there'd be a gold staking rush.

Kitco Mining: How is the political situation? [In 2022 Ibrahim Traore seized power in Burkina Fast after a military coup.]

Downey: It has been very stable. We've been very pleased with what he's done. He's very popular in the country. He has certainly achieved what he set out to achieve in pushing back the infiltration into Burkina Faso. It never affected us whatsoever in terms of ongoing operation, taxation, supply chain, people, etc. It has not affected anything we're doing with the expansion. We're currently building a power line that will reduce our costs by about $120 an ounce. All is going very smoothly. We expect to see there'll be elections in about a year to a year and a half's time. And it's very typical of West Africa. Coups occur on a regular basis.

Kitco Mining: How’s inflation?

Downey: We're seeing some pluses and minuses—electrical cable and copper has gone up. Labor is very stable. I don't see a big increase in terms of labor.

Kitco Mining: What’s the milestones over the next 12 months?

Downey: Well, it will be the announcement of the study that will be complete at the end of this month. Then we'll have Q3 results. Normally in West Africa Q3 is your worst quarter because of the wet season. I'm very pleased to date with what I'm seeing, and how the guys have coped. By the end of the year we're doing a study on the next phase of drilling.

Kitco Mining’s coverage of the Precious Metals Summit 2023 was sponsored by Newcore Gold.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.