Orezone Gold targets 1.63m ounces from Casa Berardi after transformative Quebec acquisition

Orezone Gold Corporation has outlined a 14-year production plan for its recently acquired Casa Berardi mine in Quebec, giving investors the clearest indication yet of the economic value management expects to extract from the transformative acquisition. The preliminary economic assessment projects 1.63 million ounces of gold production between 2027 and 2040, averaging 116,000 ounces annually at all-in sustaining costs of $1,877 per ounce. After-tax net present value at a 5% discount rate is estimated at $1.05 billion using September 2026 consensus gold-price assumptions and rises to $1.43 billion using a $4,350-per-ounce gold price. The figures provide an important comparison with Orezone Gold’s acquisition structure, which included $352 million of upfront and deferred consideration plus as much as $241 million of contingent payments, although the mine-plan valuation and acquisition consideration are not directly comparable measures.

The plan also strengthens the case for Casa Berardi as more than a short-term production addition to Orezone Gold’s existing Bomboré mine in Burkina Faso. Management intends to restore higher underground mining rates, reopen the East Mine, develop four open pits and increase exploration drilling to approximately 100,000 metres annually, while recent mill performance has already exceeded the throughput assumptions used in the study. Orezone Gold shares traded around C$2.80 during September 15 trading, down roughly 1% to 1.5%, suggesting investors were responding cautiously despite the sizable project valuation as gold itself weakened ahead of the Federal Reserve decision.

Casa Berardi’s $1.05 billion NPV gives investors a new benchmark for Orezone Gold’s acquisition economics

Orezone Gold completed its acquisition of Casa Berardi from Hecla Mining Company on March 25, transforming itself from a single-asset West African producer into a two-mine company with operating exposure in Canada. The transaction included $160 million in cash, approximately $112 million of Orezone Gold shares representing 9.9% of the post-closing company and $80 million of deferred cash payments, producing $352 million of upfront and deferred consideration. A further $241 million is potentially payable through contingent consideration tied primarily to permitting and future production from proposed open pits, taking the maximum headline consideration to $593 million.

Against that backdrop, the new $1.05 billion after-tax NPV is an important data point. At a $4,350-per-ounce gold assumption, the modeled NPV increases to $1.43 billion, illustrating how strongly Casa Berardi’s economics respond to gold prices well above historical norms. The valuation includes the impact of Orezone Gold’s Franco-Nevada stream, under which 6,500 ounces per year are delivered between 2027 and 2030 before the stream transitions to 5% of subsequent production, with Orezone Gold receiving 20% of spot gold value for streamed ounces.

Investors should avoid treating the difference between the acquisition price and project NPV as an immediate gain because the figures measure different things. Net present value depends on future production, gold prices, costs, permitting, capital investment and discount rates, while acquisition consideration reflects what Orezone Gold agreed to pay for an operating company, existing infrastructure and additional Quebec exploration assets.

Even with that qualification, the economic comparison helps explain management’s confidence in the transaction. Casa Berardi has already produced more than 3.2 million ounces historically, possesses extensive underground and surface infrastructure and sits within an established Quebec mining jurisdiction, reducing some development risks normally associated with building a new mine from scratch.

The financing structure also limited the upfront cash burden. Orezone Gold used cash on hand alongside a $100 million Franco-Nevada gold stream to fund the closing payment, allowing the company to preserve more balance-sheet flexibility while gaining immediate production and cash flow.

Production rises toward 132,000 ounces as Orezone Gold rebuilds underground operations

The life-of-mine plan assumes 14 years of continuous production from 2027 through 2040 and total output of approximately 1.63 million ounces. Average annual production is expected to reach 116,000 ounces at an AISC of $1,877 per ounce, while the stronger 2030-2038 period is projected to average approximately 132,000 ounces annually at lower AISC of $1,776 per ounce.

The production profile depends heavily on restoring underground mining activity that declined under the previous operator. Casa Berardi has been mined underground since the late 1980s, but recent planning increasingly favored open-pit operations and resulted in less investment in underground development, equipment and exploration. Orezone Gold now plans to re-establish historical underground mining rates, supporting a modeled 12-year underground mine life.

The existing West Mine is expected to operate from 2027 through 2038, while the East Mine is scheduled to restart production in 2029 and continue through 2038. Orezone Gold has already begun reopening East Mine access and has mobilized additional underground development capacity, with new mining equipment being delivered through 2029 as production ramps.

Surface production will come from four open pits. F134 is scheduled to provide ore during 2027 and 2028, followed by renewed production from the expanded F160 pit between late 2028 and 2031, with the Principal and WMCP pits expected to contribute later in the mine life. Those later pits require additional permits, creating one of the most important execution risks embedded in the long-term production plan.

Orezone Gold also believes the processing plant could outperform assumptions in the study. The life-of-mine plan uses throughput of approximately 3,835 tonnes per day, while the company says it has already optimized average throughput to around 4,025 tonnes per day since completing the acquisition and achieved individual days as high as 4,775 tonnes. Sustaining higher mill rates could therefore lift annual production above the modeled profile without requiring an entirely new processing plant.

Exploration could extend mine life, but the current plan still carries PEA-level uncertainty

Orezone Gold is significantly increasing exploration activity at Casa Berardi, targeting approximately 100,000 metres of drilling annually as it attempts to identify higher-grade underground zones and expand resources near existing infrastructure. The company believes the property offers multiple opportunities below current pits and around existing underground workings, while 37 kilometres of prospective strike along the Casa Berardi Fault Zone remain comparatively underexplored.

Higher underground grades could materially improve the mine economics because historical performance demonstrates what stronger grades can achieve. Between 2006 and 2016, the West Mine produced approximately 141,000 ounces annually at an average head grade near 7 grams per tonne, considerably stronger than the lower-grade profile incorporated into portions of the current plan. Management wants new drilling to rebuild higher-grade stope inventory and move more profitable ounces toward the earlier years of the production schedule.

The upside case comes with an important technical qualification. The current life-of-mine plan includes Inferred Mineral Resources and is therefore classified as a preliminary economic assessment rather than a reserve-based mine plan, and Orezone Gold states explicitly that no mineral reserves are currently defined for Casa Berardi. Inferred resources carry greater geological uncertainty, and there is no guarantee that all material modeled in the plan will ultimately convert into economically mineable reserves.

Permitting adds another layer of risk. The F134 Phase 1 pit is permitted, but amendments are still required for subsequent F134 development and the F160 expansion, while the Principal and WMCP pits require additional future permitting and associated infrastructure approvals.

Gold-price assumptions are also unusually important because bullion prices remain historically elevated. Spot gold traded around $4,286 per ounce on September 15 after falling approximately 0.3% as a stronger dollar and rising Treasury yields increased expectations of another Federal Reserve rate increase. That is slightly below the $4,350 spot-price case Orezone Gold used to generate its $1.43 billion NPV, but still far above the price environment that prevailed during much of Casa Berardi’s operating history.

Record cash flow strengthens Orezone Gold’s ability to fund the Casa Berardi ramp-up

Orezone Gold’s second-quarter results show why management can pursue an aggressive development program without relying entirely on external financing. The company produced a record 58,566 ounces during the quarter, its first full period with Casa Berardi included, and sold 60,654 ounces at an average realized gold price of $4,401 per ounce. Revenue reached a record $271.6 million, adjusted EBITDA totaled $134.5 million and operating cash flow reached $109.3 million.

Orezone Gold ended June with $96.7 million in cash plus 5,354 ounces of bullion worth approximately $21.2 million. Those resources are important because Casa Berardi requires investment in underground development, mining equipment, waste stripping and exploration during the early years of the new plan before the operation reaches its stronger 2030-2038 production profile.

Costs remain a concern despite high gold prices. Consolidated second-quarter AISC reached $2,449 per ounce, while Bomboré AISC rose 29% year over year to $2,278 because of higher royalties, lower grades and increased costs associated with processing harder material. Strong gold prices have more than offset much of that pressure so far, but mining inflation and lower grades could reduce margins quickly if bullion prices retreat materially.

Casa Berardi’s modeled life-of-mine AISC of $1,877 per ounce would represent a significant improvement from Orezone Gold’s recent consolidated cost profile. Delivering that reduction depends on successful underground development, higher production, better grades and efficient execution of the open-pit sequence, making the cost target one of the most important metrics to track over the next several years.

Orezone Gold shares around C$2.80 remain close to their 52-week high near C$3.00 and substantially above the roughly C$1.22-C$1.23 low recorded during the period. The modest September 15 decline therefore comes after a strong longer-term revaluation as investors have responded to higher gold prices, Bomboré expansion and the Casa Berardi acquisition rather than signaling a rejection of the new mine plan.

The longer-term investment case now hinges on whether Orezone Gold can turn the PEA into operating reality. Casa Berardi gives the company geographic diversification, established infrastructure and an asset with a modeled billion-dollar value, while Bomboré continues to provide production and cash flow during the Quebec ramp-up.

If Orezone Gold can restore underground productivity, obtain permits for later open pits, maintain higher mill throughput and convert exploration success into higher-grade ounces, the current 14-year plan could ultimately prove conservative. Failure to achieve those targets would make the mine more dependent on elevated gold prices to produce the returns implied by today’s valuation.

Key takeaways from Orezone Gold’s $1.05 billion Casa Berardi mine plan

• Casa Berardi’s new life-of-mine plan covers 14 years from 2027 through 2040 and approximately 1.63 million ounces of total gold production.
• Average annual production is projected at 116,000 ounces at AISC of $1,877 per ounce.
• Production is expected to strengthen to approximately 132,000 ounces annually between 2030 and 2038 at AISC of $1,776 per ounce.
• After-tax NPV at a 5% discount rate is $1.05 billion using consensus gold assumptions and rises to $1.43 billion at $4,350-per-ounce gold.
• Orezone Gold acquired Casa Berardi in March for $352 million of upfront and deferred consideration plus up to $241 million of contingent consideration.
• Management plans to rebuild underground production, reopen the East Mine in 2029 and develop four open pits over the mine life.
• Exploration drilling is ramping toward approximately 100,000 metres annually as Orezone Gold targets higher-grade underground resources and mine-life extensions.
• The current plan is a preliminary economic assessment and includes Inferred Mineral Resources, with no mineral reserves currently defined for Casa Berardi.
• Second-quarter operating cash flow reached $109.3 million, giving Orezone Gold greater financial capacity to fund development and exploration.
• Long-term value will depend on permitting, underground execution, cost reduction and whether gold prices remain strong enough to support the projected returns.