Orezone Gold closed on its previously announced phase II term loan with Coris Bank. Loan proceeds will be directed towards the phase II hard rock expansion that is currently under construction at the Bomboré Mine, with first gold scheduled in Q4/25.
The phase II term loan is for a principal amount of XOF 35.0 billion (~$58 million at a FX rate of 600), bears interest of 11.0% per annum and has a term of three years. Principal repayments are deferred until January 2026 when the phase II hard rock plant is expected to be in commercial production. The first drawdown of the phase II term loan was completed today with the remaining loan facility available for drawdown as needed in 2025. With strong operating cashflows continuing into the current quarter, the company has also repaid the $20 million bridge loan that was drawn in May 2024.
“We would like to thank our trusted partner, Coris Bank, in providing their continued support as we accelerate the growth of the Bomboré Mine,” Patrick Downey, president and CEO of Orezone, said. “The phase II hard rock expansion is now well advanced and once commissioned, will increase annual gold production to over 170,000 ounces from current levels of between 110,000 to 125,000 ounces.”
The company has agreed to amend certain terms of its outstanding convertible debentures to secure the consent of the debenture holders for the phase II term loan. The key amendment involves an adjustment to the conversion price, which has been revised to $0.70 per common share from the previous conversion price of $1.08.
The amendment to the debenture held by Resource Capital Fund VII is a “related party transaction” as such term is defined by Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. The company is relying on an exemption from the formal valuation and minority shareholder approval requirements set out in MI 61-101 as the fair market value does not exceed 25% of the market capitalization of the company, as determined in accordance with MI 61-101.
A material change report concerning the convertible debenture amendment will be filed less than 21 days before the date of closing of the amendment. The company believes that it is reasonable to do so on the basis that it was commercially prudent to effect the convertible debenture amendment at the earliest opportunity to obtain the consent of the debenture holders.
