Orezone seeks $50M capital raise in Australia IPO

[Redator]

Orezone Gold (TSX: ORE) said on Friday it has filed a prospectus with the Australian Securities and Investments Commission (ASIC) for an initial public offering to raise A$75 million ($50 million).

Under the prospectus, the Canadian miner, which operates the Bomboré gold mine in Burkina Faso, is offering approximately 65.8 million CHESS depository interests (CDIs) at a price of A$1.14 per CDI.

CDIs are used by foreign entities wishing to list on the Australian Securities Exchange with the advantage of participating in the CHESS system for clearing and settling trades. Each CDI represents a beneficial interest in one common share of a company.

For Orezone, Canaccord Genuity will act as its lead manager, bookrunner and underwriter to the offering, while Euroz Hartleys, Argonaut Securities, SCP Resource Finance and BMO Capital Markets will serve as the co-managers.

“We look forward to the ASX listing, which will raise the company’s profile by broadening its shareholder base and increase trading liquidity for all shareholders,” stated Patrick Downey, president and CEO of Orezone, in a press release.

“The listing also represents an exciting opportunity for investors to participate in the company’s growth strategy as we execute on our staged hard rock expansion at the Bomboré mine, which will significantly increase our annual gold production,” he added.

Orezone Gold’s shares rose 3.6% to C$1.14 apiece on the TSX by 11:20 a.m. ET, for a market capitalization of C$590.5 million ($431.7 million).

Bomboré expansion

The Bomboré mine located 85 km east of Ouagadougou represents Orezone’s sole asset. The company has worked on the project since 2003 and now holds a 90% interest, with the Burkina Faso government owning the other 10%.

The open pit mine entered commercial production in December 2022 following successful commissioning of the Phase 1 oxide plant earlier that year. Since then, it has operated above the planned nameplate at a processing rate of 5.9 million tonnes per annum (Mtpa).

Orezone is currently focused on expanding the operation by processing Bomboré’s hard rock mineral reserves to increase its life-of-mine gold production. The expansion will come in phases, beginning with a 2.5Mtpa plant that could increase the overall gold production to 170,000 oz. a year.

The Stage 1 plant is already under construction and is expected to begin production in the fourth quarter. The Stage 2 expansion will add a second 2.5Mtpa plant and could increase the mine production further to 220,000-250,000 oz. per year.

“Subject to funding, ongoing studies and final board approval, the Stage 2 hard rock expansion will commence in H2 2025, with commissioning expected in Q4 2026,” said Downey.

Proceeds of the Australian offering are expected to fund the Stage 2 expansion, including procurement of mechanical and electrical equipment, freight to site, engineering design and construction.

According to a technical report from 2023, the mine’s average annual gold production is expected to rise to 231,000 oz. in the first three full years after expansion.