Orezone Gold Corporation

Thank you for standing by. Welcome to Orzone Q2 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 your question, press star one again. I would now like to turn the call over to Patrick Downey, President and CEO. Please go ahead.

Thank you and welcome to the ORAZONE Q2 results webcast. I will have Peter Tam, Executive Vice President CFO with me today on this call. As you know, we will be making forward-looking statements, so please read the disclaimer. So a quick summary of Q2 results. Our gold production for the quarter was 25,524 ounces, which was slightly ahead of budget for the quarter. Our gold sales were 24,937 ounces at an all-in sustaining cost of $1,613 per ounce sold, which I will go into in detail a little later in the call. Cash at the end of the quarter was $11.5 million. And we also repaid a further $4.9 million of senior debt. Critically, again, we had zero LTIs at 1.3 million hours worked. And we also completed the MB3 RAP. Again, I'll talk about that a little later on, which was essential for access to the southern mining area. And we remain on track to meet fall year 2024 guidance. So during the quarter, Our results were impacted by a number of factors, mainly the low grid power availability. As you know, we built a power line in 2023. We connected to the grid at the beginning of this year, which allowed us to have power at around 21 cents per kilowatt hour for the operation. But that grid power availability was quite low during the first half of this year, and in Q2 was 34% availability to the plant. and the mine. This was due to a temporary reduction in power exports from Côte d'Ivoire and Ghana, really due to the dam levels in Ghana and power plant issues in Côte d'Ivoire, which have also been explained by other mining companies in the region. This actually resulted in the use of higher cost on-site diesel power generation and impacted the all-in sustaining cost by approximately $110 per ounce. It also significantly impacted throughput due to the power interruptions, which totaled 176 hours of unscheduled downtime, or 8% of total plant availability. And this further impacted costs and production. However, I am happy to report that since July, we've had greater than 95% availability, and that has continued into August, where we're approximately 96% availability to date. which has resulted in throughput's steady state of 500,000 tons per month. And really, this is because of the ongoing onset of the rainy season, and we expect that to continue throughout the year. During the quarter, we also had scheduled lower grade. This was part of the mine plan due to mine sequencing, and mining was confined to the northern portion of the mine pyramid until we completed the wrap in the south. As you can see to the right, the MV3 community has been completed and is now fully occupied, and we've now got full access to Seega East. We've also got access to Seega South, and we're now doing all the grade control drilling there. MV2 is ahead of schedule and should be completed by October, which will give us full access to the southern mining zone. This will allow us to mine the higher-grade softer oxide ore from the south, which will result in greater ounces produced in the second half of 2024, and obviously a lower cost because these tons are softer ore, less drill and blast, easier through the mill, so that will result in the oil and sustaining costs coming back to our guidance for the year. I'll now hand over to Peter Tam to do the financial and operating highlights for the quarter.

Thanks, Patrick. Yeah, so on slide five, just touching on the main items, we produced 25,524 gold ounces in Q2, which we expect to be the lowest production quarter for the year. Gold production is expected to tick upwards as mining advances to the south, into SIGA East and SIGA South, which will provide access to higher-grade soft oxide ores. that will help boost head grades and lower the percentage of transition ore in the mill feed for the second half of 2024. All unsustaining cost per ounce sold of $1,613 per ounce was elevated this quarter due primarily to the low grid availability and high number of power interruptions. Including the effect of the high power costs and lower plant availability, all unsustaining costs would have been below $1,500 per ounce and in line with our internal budget The lower production combined with higher costs contributed to a sequential decline in revenue, earnings, and cash flows for Q2, partially mitigated by a higher realized goal price of $2,334 per ounce. In upcoming quarters, we expect improvements to revenue, production, all in sustaining costs and earnings for reasons stated earlier. Quarterly operating cash flow before changes in working capital was $15.3 million, and after working capital changes was a negative $51,000, reflecting the ongoing buildup of VAT receivables, long-term ore stockpiles, significant tax payment made towards our 2023 Burkina income taxes, and a general reduction in accounts payable. Next slide. For production and unit cost summary, mining was confined to the north until June, when mining primarily and waste began at SIGA East. All release from SIGA East is expected to wrap up in Q3 to be followed by the expected mining start at SIGA South in Q4. Plant availability, as stated in the previous slide, was hampered by power issues in the current quarter, which led to significant downtime. In response, our plant operating team continue to show their resiliency in the face of these challenges by taking initiatives to improve plant throughput, such as increasing the mill's power draw and reducing the retention time in the CIL circuit, amongst other initiatives. This led to a monthly record of 525,000 tons processed in June, with this better performance continuing into Q3. The main item on the cost that I want to highlight is that in processing, unit costs were expected to be lower in Q2, with the availability of lower-cost grid power after the successful energization of the transmission line to the national grid at the end of January. However, as explained earlier, grid availability was low in Q2 at 34%. which we estimated had an approximate $2 per ton impact to processing costs for the quarter. We expect a reduction in processing costs for Q3 and beyond as grid availability normalizes. With that, I'll hand the call back to Patrick.