Orezone Gold Balances Growing Pains With Big Gains

Orezone Gold Corporation ((TSE:ORE)) has held its Q1 earnings call. Read on for the main highlights of the call.

Orezone Gold’s latest earnings call struck an overall optimistic tone, as management balanced near‑term operating hiccups with what they described as a “transformational” shift in the business. The acquisition of Casa Berardi, strong cash generation, and the successful hard‑rock expansion at Bomboré were highlighted as key value drivers, even as logistics issues and higher costs pressured first‑quarter performance.

Strategic Acquisition of Casa Berardi

Orezone closed its purchase of the Casa Berardi gold mine and exploration portfolio in Quebec, giving the company a diversified, multi‑asset platform in a Tier‑1 jurisdiction. While Casa Berardi produced only 1,226 ounces in the quarter under Orezone’s ownership, management emphasized its potential to add meaningful production, free cash flow, and exploration upside once full guidance is issued in June.

Bomboré Stage 1 Hard Rock Expansion Successfully Completed

The company reported that the 2.5 million‑tonne‑per‑annum Stage 1 hard rock expansion at Bomboré was completed on time and on budget, with commercial production declared on January 16, 2026. Throughput is currently running about 10% above nameplate, and the follow‑on Stage 2A expansion is advancing, with completion targeted for late third quarter 2026.

Record Quarterly Earnings and Strong Operating Cash Flow

Orezone posted record net earnings attributable to shareholders of $39.6 million in the first quarter, supported by robust operating cash flow of $175.6 million. Management noted that these figures were boosted by a $100 million gold stream deposit from Franco‑Nevada, which has strengthened the balance sheet and funded recent growth initiatives.

Improved Liquidity and Capital Repatriation

The company’s inclusion in the VanEck Junior GDXJ ETF on March 20 was touted as a key step toward broader investor visibility and enhanced share liquidity. Orezone also began repatriating earnings to Canada, with $52.5 million returned so far in 2026, underscoring improved capital mobility and financial flexibility.

VAT Refunds and Cash Receipts

Working capital benefitted from continued recovery of value‑added tax, with $5.1 million in refunds received during the quarter. Additional refunds in April and May brought year‑to‑date receipts to $23.9 million, which management said is helping fund operations and expansion without over‑reliance on new financing.

Production and 2026 Guidance

Total company production reached 38,789 ounces in the first quarter, with 37,563 ounces from Bomboré and 1,226 ounces from Casa Berardi’s brief contribution. Despite a softer start, Orezone reiterated its 2026 consolidated production guidance of 220,000 to 240,000 ounces, noting that output is expected to be weighted toward the second half as hard‑rock volumes ramp up.

AISC Within Guidance

All‑in sustaining costs came in at $2,245 per ounce sold for the quarter, a level management said remains within the company’s full‑year guidance range. They explained that, based on an assumed gold price of $4,500 per ounce and roughly $540 per ounce of royalties, the underlying AISC excluding royalties is approximately $1,700 per ounce.

Management and Team Strengthening

Orezone continued to build out its senior leadership team, announcing three key appointments aimed at supporting its growing asset base. Marc‑Andre Pelletier joined as chief operating officer, JF Ravenelle was named vice president of exploration, and Amanda Mallough took on the role of vice president of investor relations.

Exploration and Development Upside at Casa Berardi

At Casa Berardi, underground development rates have more than doubled under Orezone’s ownership, laying the groundwork for a sustained production base. The company has mobilized four drill rigs, with plans to ramp to around seven rigs and 80,000 to 100,000 meters per year, and expects to start releasing drill results and portfolio updates in the near term.

Cost Optimization Initiatives

Management highlighted several initiatives aimed at lowering structural costs across the portfolio, particularly as hard‑rock mining becomes a larger part of the mix. At Casa Berardi, mill optimization studies are underway, while at Bomboré, the company is advancing plans for a large solar plant designed to reduce and stabilize future power costs.

Explosives Shortfalls Hit Q1 Grades and Production

First‑quarter results at Bomboré were hampered by shortfalls in emulsion deliveries, which dropped to about one delivery per week versus the expected four toward the end of 2025. This forced a change in the short‑term mine plan, delaying access to higher‑grade pits such as P17 and pushing the operation toward lower‑grade transition material, resulting in lower gold output.

Significant Grade Shortfall Versus Budget at Bomboré

The explosives issues translated directly into a notable grade miss, with reported grades averaging 0.75 grams per tonne versus a budgeted 1.14 grams. This roughly 34% shortfall materially depressed production for the quarter, and management made clear that restoring access to higher‑grade ore is a key near‑term operational priority.

Higher Processing Costs with Hard Rock Operations

The shift into more intensive hard‑rock mining drove processing costs per tonne higher, rising from $19.64 per tonne in the first quarter of 2025 to $23.22 per tonne this year. Orezone attributed the roughly 18% increase to harder ore that demands more drilling, blasting, crushing and grinding, along with greater cyanide consumption.

Limited Near-Term Contribution from Casa Berardi Mill

While Casa Berardi is central to Orezone’s longer‑term growth story, its immediate financial impact was modest because the mill operated for only five days under the company’s ownership in the quarter. Management cautioned that more meaningful production and cost contributions will start in the second quarter and will be better defined once formal guidance and a life‑of‑mine plan are released.

Timing Uncertainty for Full Stage 2 Expansion

The company signaled a more cautious approach to major capital decisions at Bomboré, noting that the timing for the full Stage 2 expansion is under review and likely to be deferred. Management indicated they may wait until early next year to sanction the larger expansion, preferring to first ensure steady‑state logistics and to prioritize payback on recent capital investments.

Supply Chain and Logistics Risks

Underlying many of the quarter’s challenges was a change in Burkina Faso’s national transportation and logistics setup, which disrupted deliveries of explosives and other supplies. While Orezone reported that deliveries have improved recently, they acknowledged that supply chain reliability remains a continuing operational risk that will require ongoing attention.

Forward-Looking Guidance and Outlook

Management reiterated consolidated 2026 production guidance of 220,000 to 240,000 ounces, with growth skewed to the back half of the year as hard‑rock output rises and Casa Berardi ramps. Stage 1 at Bomboré is already performing about 10% above nameplate, Stage 2A remains on track for late third quarter completion, and detailed guidance for Casa Berardi, including a life‑of‑mine overview, is expected later this year.

Orezone’s earnings call painted a picture of a company in transition, moving from a single‑asset producer to a diversified gold miner with growing scale. While logistics disruptions, grade shortfalls, and higher costs weighed on the first quarter, management argued that strategic M&A, strong cash generation, and disciplined expansion planning position the business for stronger performance as 2026 unfolds.