Orezone Gold (ORE) Q4 2023 earnings summary

Executive summary

• Produced 141,425 oz of gold in 2023, meeting production guidance; first full year of commercial production generated $80.0M in operating cash flow and $53.7M in adjusted earnings.

• 2024 production is guided lower at 110,000–125,000 oz as mining remains limited in the northern zone until resettlement enables access to higher-grade southern pits.

• Phase II hard rock expansion is in early engineering; financing discussions with Coris Bank continue, with further guidance dependent on a binding debt commitment and Board approval.

Financial highlights

• 2023 revenue was $271.5M; net income attributable to shareholders was $43.1M, or $0.12/share basic and diluted.

• 2023 adjusted EBITDA was $120.0M and adjusted earnings were $53.7M, or $0.15/share; these are non-IFRS measures.

• Operating cash flow was $80.0M after working capital changes and $104.8M before; free cash flow was $36.2M.

• Q4 revenue was $67.6M and net income attributable to shareholders was $4.0M; adjusted EBITDA was $26.7M and adjusted earnings were $14.3M.

Outlook and guidance

• 2024 guidance: gold production 110,000–125,000 oz; AISC $1,300–$1,375/oz sold; sustaining capital $14M–$15M; growth capital excluding Phase II $16M–$17M.

• Production is expected to be higher in Q1 and Q4; Siga pit mining is planned to start in Q3-2024 after MV3 household relocation, while some southern higher-grade pits shift to 2025.

• 2024 AISC is forecast higher than 2023 due to lower grades and production, higher unit mining costs, strip ratio and royalties, partly offset by lower grid-power processing costs.

• 2024 sustaining capital includes $5M–$6M for tailings storage facility lifts; growth capital includes $1.0M for grid-power connection commissioning and $15M–$16M for RAP Phases II and III.