Orezone Gold Corporation ($ORE)

Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to the Orezone 2025 Year-End Results and 2026 Guidance Webcast and Conference Call. [Operator Instructions] I would now like to turn the call over to Patrick Downey, President and CEO. Please go ahead.

Many thanks. And welcome to the Q4 and year-end 2025 Orezone Results Presentation. I also want to say this is an exciting day for Orezone as we just announced the completion of the transformational acquisition of the Hecla Quebec assets, including the producing Casa Berardi mine, which I will touch on later in the presentation. With me today is Peter Tam, EVP and CFO; Ryan Goodman, SVP and General Counsel; and Kevin Mackenzie, VP, Corporate Development and IR, who will be available to answer questions, and Peter will be presenting with me today. There are some forward-looking statements, so I ask that you carefully read those through in your own time. And I'll go straight into the Bombore Q4 full year and 2025 highlights. Gold production for the quarter was 30,407 ounces, a 30% increase quarter-over-quarter, full year of 110,014 ounces, which was slightly below guidance, which was really due to the delay of the hard rock high grade with explosives deliveries in Burkina. Gold sales in the quarter were 31,526 ounces at an average realized price of $4,129 per ounce, resulting in $130.5 million in revenue. Full year was 109,084 ounces at an average realized price of $3,444 per ounce, resulting in revenue of $376.6 million. All-in sustaining costs for the quarter were $1,942 per ounce sold and for the year, was $1,776 per ounce sold within revised guidance despite the lower production in the quarter, which is a great achievement for the team. This all resulted in record net income in Q4 of $27.6 million and full year of $64.9 million attributable to shareholders. We have -- remain a strong balance sheet and a strong financial position at the end of the year of cash and gold bullion of $111.9 million and senior debt of $85.9 million, which we continue to pay down at more or less $1.6 million per month. We also completed the Stage 2 2.5 million tonne hard rock expansion on time and on budget, again, another great achievement by the team. I'll now hand over to Peter Tam, EVP and CFO, to go through the financial and operating highlights.

All right. Thanks, Patrick. Financial and operating highlights, both Q4 and the year 2025 saw record revenue and earnings from mine operations, driven by higher gold prices and the start-up of our new hard rock plant. We realized a gold price of $4,129 per ounce in Q4 and $3,444 per ounce for the full year. Gold prices are below today's spot price of $4,500 per ounce and with expanded gold production expected for this current year, we expect to see another record year of revenue and mine earnings in 2026. All-in sustaining costs per ounce sold for both Q4 and 2025 were higher when compared against the respective periods in 2024, attributable to increased government royalties from both better prices and a new royalty structure introduced in April of 2025, a stronger local currency and lower head grades. In terms of cash flow, free cash flow was negative in 2025 as the company invested heavily for its future with $131 million in growth capital with $80 million spent on the Stage 1 hard rock expansion and $22 million on the permanent backup power plant. With these 2 major expenditures now behind us, growth capital is expected to decline by over 60% in 2026. With more ounces and less capital requirements, 2026 is shaping up to be a year of strong free cash flow generation for the Bombore mine. Our liquidity remains strong with $98 million of cash at the end of 2025, combined with cash flow generated by our Bombore mine in 2026 to date. We maintain a healthy cash position even after today's closing on the Casa Berardi acquisition. Next slide. On production and unit cost summary for mining, we moved 22.5 million tonnes in 2026 and in accordance with our mine plan at a relatively low strip ratio of 1.67. For processing, our oxide plant continues to deliver with over 6.2 million tonnes processed, another record year for throughput. For the hard rock plant, 146,000 tonnes were treated in December during its ore commissioning period. Overall, cash cost per tonne processed exclusive of government royalties rose 7% in 2026 from $20.61 per tonne to $22.09 per tonne in 2025. The increase is explained by stronger local currency, slightly higher strip ratio and the start of hard rock processing, which carries with it higher per tonne treatment cost for greater unit consumption of power, grinding media and consumables. With that, I'll hand it back to you, Patrick.

Thanks, Peter. So just into our 2026 production and cost guidance. This is really exclusively for Bombore. Please note that. So gold production of 160,000 to 180,000 ounces at all-in sustaining costs of $2,100 to $2,300 based on a $4,500 per ounce budget, which would contribute approximately $540 to the all-in sustaining costs. So we still remain on cash cost of very, very competitive operation. Sustaining capital, $21 million to $23 million explained below at $15 to $18 for the hard rock and $9 to $11 for the TSF expansion. Growth capital of -- sorry, growth capital of $44 to $52, which is the $15 to $18 of the Stage 2 expansion, the tailings Cell 2 expansion of $9 to $11 and the resettlement action plan of the RAP at $20 to $23. Sustaining capital, as I said, is essentially tailings lifts. So operations will show a 45% to 64% increase to 2025 gold production, which is really attributable to the full year of hard rock operations. This gold production will be weighted towards the second half of 2026 when we really get into the meat of the hard rock, the higher grades in P17 and Maga -- sorry, P8P9, lowest gold production in Q1 due to adjusted mine sequence and temporary shortage of explosives deliveries during that period. Our explosives area is now permitted, and we are getting deliveries from 3 separate explosive suppliers. So these things are being sorted out as we speak. As I said, the assumed gold price is $4,500 an ounce to which royalties will contribute $540 to the all-in sustaining cost for every $500 increase or decrease in the gold price, that goes up by 1% or down by 1%. We are advancing Stage 2A of the hard rock expansion to include the installation of a rock breaker, thickener and an oxygen module, which will optimize recovery and throughput and will be used in the next stage when we go to the 5.5 million tonnes per annum. So this will be used as optimization and part of the build up Stage IIb. Casa Berardi will issue guidance in Q2 of 2026 and that will include our planned production and cost, capital expenditures, drill programs, et cetera, for the asset post-2026 acquisition. So it's been quite a busy 12 months for Orezone. As you can well imagine, it's repositioned the company. We have certainly improved our liquidity in the past 12 months, completed a secondary listing on the ASX, which has expanded our investor base and further enhanced our capital markets profile. We've now been included as of March 20, 2026 in the VanEck Junior Gold GDXJ Exchange traded fund. At Bombore, we completed the 2.5 million tonne per annum Stage 1 hard rock on time and budget and achieved commercial production. We continued exploration success, which as I said, will be released in the coming months. We also acquired Casa Berardi and a portfolio of exploration projects, some of which are advanced, all located in Quebec, really a strategic and transformational acquisition for us in a Tier 1 jurisdiction, positions us as a diversified multi-asset producer, material scale production and free cash flow. And I look forward to bringing further news on that throughout the coming years. So Casa Berardi in Quebec, the assets are all in Quebec. We closed the acquisition today. Last year's gold production was 91,160 ounces. We expect roughly the same in 2026, of which 9 months will be attributable to Orezone's bottom line. Reserves of 1.2 million ounces and a further measured indicated resources of 1.2 million ounces. This excludes Heva-Hosco, which has got another 1.2 million ounces of measured indicated, and across the board and about another 1.2 million of inferred. So quite a robust reserve and resource base at these operations and exploration projects. Bombore, Stage 1 complete, guidance of 160,000 to 180,000, reserves of 2.4 million ounces, resources of 2.1 million, and we are completing a 43-101. So we will update those numbers later this year. So gold production consolidated. We believe this year will be about 220,000 to 240,000, including Casa Berardi. Medium-term target should be around 350,000 ounces a year, which is really focused on: a, the Casa Berardi mine as we rescope the mine plan and optimization. We are -- and very soon we'll be contracting a mine contractor to come on the site very soon. We will be updating all of that mine plan and economic study later this year, probably around Q4 with a PEA. We want to reestablish the high-grade stope inventory there. It was -- historically, it was a 7-gram per tonne underground mine, and that's where we want to get back to. And to do that, we need to really incrementally ramp up the exploration. We hope to do something in the range of 30,000 to 40,000 meters this year, but the goal is to get up to about 100,000 meters a year. We're very excited about the exploration potential, and we look forward to delivering those results to the market over the coming months and years. At Bombore Stage 1 completed, Stage 2A in progress and well in hand, ongoing exploration, as I said, targeting higher grid, which we expect to release again for the results later this quarter. So we really have now established ourselves as a mid-tier producer going forward. With that, I'll end the call, and I'll hand it back to the operator for any questions.

[Operator Instructions] Your first question comes from the line of Jeremy Hoy with Canaccord Genuity.

Congrats on getting Casa Berardi over the line. On Casa Berardi, you've now had a bit more time with the team. Are you able to update us on how thinking has evolved, if at all, on the plans going forward there. I'm wondering if potentially you could give us some -- a general range of what you might expect CapEx to be going forward? And also, if you can remind us what the plans are for the open pits because most of the discussions so far have been on the extension of the underground. And so a reminder of what to expect there on the open pits would be helpful as well.

Yes. Thanks very much. Yes. No, we don't really know exactly what the CapEx would be. We're looking at how can we bring forward some equipment so we can expand the mine plan and get some further development done from both the underground drilling and the optimization of the underground as we see it in the West and later on in the East. So I can't really give you phone numbers, but we are bringing the contractor on very, very soon. I expect to announce that in the coming weeks that we have finalized a contract and we're bringing the contractor on to do a lot of that development for us in the short term because we want to get at this really quickly. We see a lot of exploration upside, both from surface and underground, but starting with the underground drilling. So hard to say exactly what it's going to be at this point in time. In regards to the open pits, we are -- we continue to advance that permitting. That was being done by Hecla. We will take that on and continue that work with the consultants. So I would expect the same sort of timeline that sort of 2033 type of permit timeline would be sort of what we see. They're very, very important part of this acquisition going forward. But in the meantime, the focus will continue to be the exploration in the underground. Two open pits that we have existing in operation would be the 160 and we will likely do an expansion on that. The last reserves were done at [ 1900 ], I believe. So we will relook at that. There is some further drilling beneath that pit, so we'll go after that. There is another pit called the F134. Again, smaller pit, but very valuable to us, was done at 1900. We look at that and optimize that as well with our team, and we'll make some announcement on that as part of the studies going forward. So it will be a fair amount of news. I really can't tell you what the capital is because we need to see what equipment deliveries we could get and what sort of terms you can get. But in the meantime, I would expect we'd be bringing the contractor on spending probably about $1 million a month once he's fully up to speed on development.

Okay. Really appreciate that. On Bombore, is there -- I guess, with the explosives and the situation with the permitting of the storage facility, can you update on the potential timing there? And is there any slack built into the guidance for potential delays in explosive delivery similar to what was seen earlier?

Yes. So the perm is not the issue any longer, we got that. So that's not our issue. It's just delivery. So what we're looking at, we had 1 group, and they bring something up, then we have to get an escort to that. So what we're looking, we've got 3 separate groups now that we're bringing in. So we want to keep a rolling delivery into site. That's the key for us. So the -- it's not the magazines or anything like that anymore. So really getting the -- emulsion, unfortunately, has become a designated product in Burkina, so needs an armed escort now. So those are the sort of things. You've got one guy supplying the delivery. Then you're sort of behest and waiting for him and then for his delivery to come in through that armed escort. So we've branched out. I think we're signing the third contract now, I believe, it's...

We're bringing on 2 new suppliers and they should start delivery probably for us in -- at the start of April. So we'll see the benefit of that going into Q2.

Okay. That's helpful color. Last one was there was commentary on the timing for the completion of Stage 2 hard rock expansion. Understandable there's a few things up in the air there. Do you have any idea when you might sort of be able to finalize the schedule there on that second stage of expansion?

Well, to be frank, we would love to do it today. Just as you see it, this makes total sense to get moving today. But we know there are ongoing discussions right now with WAF and the government, and we expect to hear something very soon. I just don't think it would be prudent for us to start something where those discussions are being finalized. I think they're going well as far as I understand. I don't know, we're not in the room, but we just want to see a final resolution to that, and then we can push the pin on that. That's really -- we don't want to be sort of silly here where we start something and then find out that the resolution wasn't to everybody's satisfaction. So we wait and then hopefully get started very, very soon after that.

[Operator Instructions] I will now turn the call back to Patrick Downey for closing remarks.

Okay. Well, thank you very much for attending. Obviously, a bit of a red-letter day for us today announcing the closing of the Casa Berardi transaction. We look forward to keeping you all updated on that as we go forward and also updated on our progress as we advance the hard rock into the higher grade in -- throughout 2026, should be very busy and exciting year, lots of free cash flow and lots of exploration and development. So busy year for the team. I wanted to thank the team. It's been a very, very busy number of months getting this across the line. So you can't do this on your own. You need a group of people that you can trust and I'm really, really happy that we have that here. Thank you.

Ladies and gentlemen, that concludes today's call. Thank you for joining. Have a great day.