Orezone Gold Corporation

Thank you for standing by. My name is Hermione and I will be your conference operator today. At this time, I would like to welcome everyone to our Zone Q1 2024 results webcast and conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw a question, Press star 1 again. I would now like to turn the call over to Patrick Downey, President and CEO. Please go ahead.

Thank you very much and welcome to the ORAZONE Q1 2024 results conference call. With me today will be Peter Tam, CFO, who will be going through the financial aspects of the quarter. So during Q1, we had gold production of 30,139,000 ounces, which was right on plan. Gold sales of $31,229 at an all-in sustaining cost of $1,324 per ounce sold. Cash at the end of the quarter stood at $15.6 million. We also paid down a further $5 million of senior debt, which on top of the $34 million we paid in 2023, leaves us with approximately $56 million of senior debt remaining. We had zero LTIs during the quarter, worked of 1.4 million hours, which is another strong reflection of the operational excellence at the Bomboré mine. We also essentially completed the MV3 wrap. I'll talk about it in a little bit later on, but that now allows us access to mining in the south, and we're on track to meet full year guidance for 2024. We also announced that we'd be doing a phase two hard rock expansion. It'll be completed in two stages. We announced that last week. I'll talk about that later on in the presentation. And very importantly, we will be commencing another phase of exploration, which will be ongoing likely for several years, which will further unlock value at the operation. I'll now hand over to Peter.

Thank you, Patrick. Our financial and operating highlights. For the first quarter, we produced 30,139 gold ounces consistent with our mine plan and grades and sold 31,229 gold ounces at a realized gold price of $2,066 per ounce. Cash cost was $1,127 per ounce sold and all in sustaining cost was $1,324 per ounce sold. for a healthy cash margin of $742 per ounce, or 36%. Gold production in the first quarter was lower than the comparable quarter in 2023, as the prior period mill feed benefited from the reclaim of high-grade stockpiles, which were fully depleted by the end of June 2023. Revenue from gold sales was $64.7 million, resulting in earnings from mine operations of $26.9 million after cost of sale of $37.8 million. Cost of sales was comprised of $30.1 million in production costs, $5.1 million in government royalties, and $5.7 million in depreciation and depletion, partially offset by a $3.1 million write-down reversal to our long-term or stockpile inventory, driven by an increase in the consensus long-term goal price during the quarter. Pre-tax income was $20.4 million, and then after-tax net income was $13.6 million. Net income after minority interest was $11.7 million, and basic and diluted earnings per share were both $0.03 for the quarter. In terms of cash flows, operating cash flows before changes in working capital was $20.4 million, and after working capital was $13.6 million. Cash used in investing activities was $11.6 million, which included growth spending of over $6 million for the ongoing RAP, finalization of the grid power connection, and early works for the Phase II hard rock expansion. This resulted in free cash flow of $2 million for the current quarter. As stated by Patrick earlier, cash at March 31, 2024 stood at $15.6 million after principal repayments on a Coors Bank senior debt of $5 million in the first quarter. To improve our cash position and near-term liquidity, the company closed and drew upon an XOF-denominated bridge loan of approximately 20 million U.S. with Coors Bank after the end of the quarter on May 10th. We are in advanced discussions with Coors Bank for the project loan on our Phase II hard rock expansion and expect to conclude a binding debt commitment before the end of June in order to allow the expansion to proceed. Next slide. Production and unit cost summary. Operationally, for Q1, we mined 5.5 million tons at a trip ratio of 1.3. Mine tons were 20% higher than the same quarter in 2023 as mining rates in the current quarter were increased by the assistance of a second mining contractor that mobilized the site in July of last year in order to help keep pace with the mine plan. For processing, we processed 1.36 million tons in Q1 2024 at an average head grade of 0.78 grams per ton gold with a recovery rate of 89%. resulting in gold production of 30,139 gold ounces. When compared to Q1 2023 gold production of 41,301 gold ounces, gold production declined by 27% due to an 18% decrease in head grades, a 6% decline in plant throughput, and a 3% decrease in plant recoveries. The reclaim of higher grade stockpiles as supplemental mill feed contributed to the higher head grades in 2023, As for plant throughput and process recoveries, they are lower in the current quarter due mainly to the greater proportion of transition ore as mining deepens in certain pits and lower plant availability experienced in the quarter. Specifically, the presence of harder transition ore results in slightly lower metallurgical recoveries, lower plant throughput, and additional plant maintenance, while plant availability was also impacted from commissioning activities to connect to the national grid in January. followed by the unexpected shortage of grid power from Sanibel beginning in March. We do expect, however, planned throughput, head grades, and recoveries to improve from a greater blend of oxide ore once mining commences at SIGA East in Q3 2024. From a cost perspective, all unsustaining cost per ounce sold was $1,324 in Q1 2024, a 43% increase when compared to Q1 2023 all-in sustaining costs of $924 per ounce. The higher all-in sustaining costs is attributable to lower gold production, greater per ounce royalty costs from the new royalty rates that came into effect in October 2023, and increased mining costs. Unit cash costs covering mining processing site G&A was $21.05 per orton process in Q1 2024, an increase of 11% from $18.96 per ore ton in Q1 of 2023. The increase is due to the higher mining and site G&A costs and from fuel ore tons process. Mining costs have moved higher as lower benches are mined, resulting in longer hauls and more transition material that requires drill and blast prior to excavation, combined with a higher strip ratio and more contractor management fees with the use of two mining contractors. Site G and A costs reflect greater security spending as mining and RAP activities progressively increase in the southern half of the Bonebrae mining permit. Processing costs per ore ton have remained relatively steady from $9.21 per ton in Q1 of 2023 to $9.24 per ton in Q1 2024. Unit processing costs were expected to decline in Q1 2024 from 2023 levels upon connecting to the national grid at the end of January. However, power cost savings were offset by the greater blend of transition ore, resulting in higher per-ton consumption of power, grinding media, and main reagents, more plant maintenance to address higher equipment wear, and from lower plant throughput. Furthermore, the mine relied on more self-generated power using diesel beginning in March from the lower-than-expected availability of the national grid towards the end of the quarter. We do expect unit cash costs to improve once full mining access commences at Tiga East, with greater release of near-surface oxide ore from the starter pits in this area, beginning in the second half of 2024. With that, I'll hand it back to Patrick.