Jim's Mining Letter - May 7, 2024

Orezone Gold (ORE.TO ORZCF) updated on its Phase II hard rock expansion and provided a three-year production forecast for its Bomboré Gold Mine located in central Burkina Faso. Following a review of available financing sources, the company has decided to complete this brownfield expansion in two stages: Stage 1 will consist of an initial 2.5Mtpa hard rock plant; Stage 2 will increase the hard rock throughput to 5.0-7.0Mtpa. The existing Phase I oxide plant will continue to process oxide ore at a targeted rate of 6.0Mtpa. Capital cost for the initial 2.5Mtpa hard rock plant is estimated at US$80 million, significantly less than the US$168 million estimated for the 4.4Mtpa hard rock plant, along with the benefit of a shorter overall construction timeline. Costs of construction for this Stage 1 hard rock plant will primarily be financed through senior debt, with the balance from future operating cash flow. The company expects to achieve first gold from the 2.5Mtpa hard rock plant in late 2025. Over the next three years, Orezone will focus on ramping up future production at Bomboré to 170,000-185,000 oz/year, which will help the company to rapidly de-lever its balance sheet. During this period, the company will continue to evaluate the timing of the Stage 2 hard rock expansion which it will look to advance with a strong treasury and cash flow from operations. Additionally, Orezone plans to initiate a multi-year exploration campaign to further determine the size and scale of the Bomboré mine. With current mineral reserves down to an average depth of under 40m across 14km of strike, the company sees significant potential to not only increase the overall mineral inventory at Bomboré, but the potential to systematically target higher-grade mineralization within the much broader structural corridor. Planning and budgeting for this program are ongoing, with drilling expected to commence in Q3 2024. During the next three years, Orezone is forecasting strong growth from its Bomboré operations, with gold production projected to exceed 170,000 oz/year by 2026.

Hot Chili (HCH.AX HCH.V HHLKF) announced that it has arranged a A$29.9 million funding to accelerate the Costa Fuego Copper Hub, Chile and is positioning for near-term, meaningful, copper production. The A$24.9 million private placement received strong demand from Australian, Canadian and overseas institutional investors, as well as existing shareholders, plus the company is undertaking a share purchase plan to eligible existing shareholders under the same offer price as the placement to raise up to an additional A$5 million. Upon completion of the capital raise, the company will be fully funded to deliver key milestones in the growth and development of the Costa Fuego copper-gold project: completion of the Costa Fuego pre-feasibility study, expected in H2 2024, an advance water supply study and the creation of a new water company, expected in H2 2024; up to 25,000m of drilling, exploration and further land consolidation over the next 18 months; and commencement of a bankable feasibility study. Further updates are expected as the company accelerates its growth and development plan with a strengthened treasury and a rising copper price environment. The placement and the share purchase plan aim to increase Hot Chili’s trading liquidity on the TSXV.

Canada Nickel (CNC.V CNIKF) updated on its 2024 exploration program with assay results from four new holes at its Reid property, which included the best drill result to date from the property - 687 metres of 0.27% nickel including 36.0 metres of 0.41% nickel and 7.5 metres of 0.56% nickel in REI24-18. All four holes intersected core lengths of at least 676 metres with average grades of 0.24% to 0.27% nickel. The 2024 exploration program is targeting delivery of seven new resources by Q2 2025 and six further discoveries, unlocking the regional exploration potential of the Timmins Nickel District. With six drill rigs now operating, the company expects a steady flow of drill results from across the exploration portfolio.

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