/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES
OR FOR DISSEMINATION IN THE UNITED
STATES/
US$96 Million in
Senior Secured Debt, a US$35 Million
Convertible Note Facility, and US$51
Million in Equity
VANCOUVER, BC, Jan. 21, 2021 /CNW/ - Orezone Gold Corporation
(TSX.V: ORE) (OTCQX: ORZCF) (the "Company" or "Orezone") is
pleased to announce that the Company has secured binding
commitments totalling in excess of US$182
million to fully finance the construction of its
shovel-ready Bomboré Gold Project ("Bomboré" or the "Project")
located in Burkina Faso,
West Africa ("Project Financing
Package"). The Project remains on track for first gold pour
by Q3-2022.
The Project Financing Package is comprised of the following key
terms:
- US$96 million senior secured
debt facility with Coris Bank International ("Coris Bank") with
interest rates of 8.0% and 9.0% ("Senior Debt Facility").
-
- Coris Bank is one of the
largest and fastest growing banks in West
Africa.
- US$35 million 8.5% convertible
note with Resource Capital Fund VII L.P. ("RCF") and Beedie
Investments Ltd. ("Beedie Capital") ("Convertible Note
Facility").
-
- RCF VII is part of Resource Capital Funds, a global mining
private equity firm.
- Beedie Capital is the private investment arm of Beedie, the
largest private industrial owner, developer, and property manager
in Western Canada.
- US$51 million bought-deal
equity offering of 61,950,000 common shares of the Company (the
"Common Shares") at a price of C$1.05
per Common Share (the "Equity Offering Price") for gross proceeds
of C$65,047,500 co-led by Canaccord
Genuity Corp. ("Canaccord") and CIBC Capital Markets ("CIBC") (the
"Equity Offering").
- No gold hedging, offtakes, or cost overrun reserve required
by the debt facilities.
- Debt covenants allow for expansion flexibility of oxides and
sulphides.
- The Project remains free of gold streams and private
royalties, thereby preserving upside for shareholders.
Patrick Downey, President and CEO
stated, "We are extremely pleased to announce this attractive
financing package following a competitive selection process.
We believe the financing package announced today is a testament to
the strong project fundamentals offered by Bomboré.
We are delighted to welcome Coris as the senior lender to the
Project and proud to have them as a partner. They are one of
the largest West African banks and first became a shareholder in
2018. They have financed mining projects within West Africa and are very conversant with the
technical and political landscape in the region.
We have worked very closely with RCF throughout this process
and thank them for their continued support. We are also very
pleased to welcome the Beedie Group as a new lender to the Company.
The debt package is structured to provide maximum flexibility
for the Company to complete future expansions including the staged
Phase II Sulphide Expansion. Bomboré hosts a very large
M&I resource at shallow depths, has exciting exploration
potential, and is open to further enhancement opportunities.
We are now ready to ramp up construction activities at
Bomboré with first gold pour scheduled for Q3-2022."
PROCESS OVERVIEW
The Project Financing Package was the result of a competitive
process conducted with the Company's financial advisor, Cutfield
Freeman & Co Ltd. The Senior Debt Facility with
Coris Bank together with the
Convertible Note Facility with RCF and Beedie Capital were selected
as they provided the best combination of operational flexibility
and pricing for the Company.
SENIOR DEBT FACILITY
The Company has received a credit-approved binding term sheet
from Coris Bank International for a senior secured project-level
debt facility that is divided into a Medium-term Loan and a
Short-term Loan. The Medium-term Loan will fund construction
costs while the Short-term Loan will fund the remaining capital
spend and initial working capital at a lower interest rate.
Both loans are denominated in West African Communauté Financière
Africaine francs ("XOF"), the official currency of Burkina
Faso. The US dollar equivalents are shown using an exchange
rate of 545 XOF per USD. As a
portion of the project capital will be spent in XOF, the Senior
Debt Facility in XOF will provide a natural currency hedge during
construction.
Medium-term Loan of ~US$64
million (XOF 35.0
billion)
- Term of 5 years.
- Interest rate of 9.0% per annum.
- Availability period to June 30,
2022 with multiple drawdowns permitted and first drawdown by
December 31, 2021.
- Deferral of principal repayments for the first 24 months.
- Early repayment permitted with a sliding scale prepayment
penalty ranging from 2% to 3%.
Short-term Loan of ~US$32
million (XOF 17.5
billion)
- Term of 12 months from first drawdown.
- Interest rate of 8.0% per annum.
- Availability period to September 30,
2022 with two drawdowns permitted.
- First drawdown is to commence after full drawdown of
Medium-term Loan.
- First principal repayment by January 31,
2023.
The Senior Debt Facility has no requirement for hedging, cost
overrun reserve, or cash sweeps. A fee of 0.75% is payable
should the Company exercise early termination of the Senior Debt
Facility before first drawdown.
Conditions precedent to loan drawdowns include execution and
delivery of the final Senior Debt Facility documentation, local
registration of project-level security, and other customary
conditions.
Idrissa Nassa, President of Coris Bank International, who was
appointed best CEO of the year 2020 by the Financial Afrik
Magazine, stated "We are pleased to be working with Orezone in
the development of the Bomboré Gold Mine. Our team has
visited the project and was impressed with the community
relocations and other early works that the project has
undertaken. We look forward to completing the funding of
Bomboré and seeing the mine placed into production. Our
financing of Bomboré demonstrates the stated aim of Coris Bank to be a leading bank in support of
the economic growth in each of our country markets.
Moreover, this lending continues to showcase the experience of
Coris Bank in mine financing and
follows several other successful financings by Coris Bank of mining companies located in
West Africa, including
Burkina Faso."
CONVERTIBLE NOTE FACILITY
The Company has signed binding letter agreements for a
Convertible Note Facility issuance in the aggregate amount of
US$35 million.
Key terms include:
- Term of 5 years.
- Interest rate of 8.5% per annum.
- Interest is payable up to 75% in common shares at the option of
the Company.
- Availability period to September 30,
2021 in a single drawdown following the satisfaction of all
conditions precedent.
- Convertible at the option of the lenders at any time at the
conversion price of US$1.08,
representing a 30% premium to the Equity Offering Price
("Conversion Price").
- Forced conversion at the Company's election at the Conversion
Price for up to 50% of the outstanding principal when both of the
following conditions are met simultaneously:
-
- Commercial production has been achieved; and
- If over 20 consecutive trading days, the VWAP of the Company's
common shares exceeds a 50% premium to the Conversion Price.
- Non-callable with any outstanding principal due at
maturity.
- No upfront fees.
Conditions precedent to drawdown include project expenditures of
US$50 million to be funded by new
equity, execution and delivery of the final Convertible Note
Facility documentation, and other conditions customary for a
facility of this nature.
The Convertible Note Facility to be issued to RCF is a "related
party transaction" as such term is defined by Multilateral
Instrument 61-101 - Protection of Minority Security Holders in
Special Transactions ("MI 61-101"), requiring the Company, in the
absence of exemptions, to obtain a formal valuation for, and
minority shareholder approval of, the "related party 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 of the Convertible Note Facility
does not exceed 25% of the market capitalization of the Company, as
determined in accordance with MI 61-101.
Pursuant to the policies of the TSXV, the Company is required to
seek shareholder approval for the Convertible Note Facility to be
issued to RCF as the conversion of such note into common shares of
the Company could result in the creation of a new "Control Person",
as such term is defined in the policies of the TSXV.
Shareholder approval will be sought at the Company's annual general
and special meeting which is anticipated to be held in May 2021.
EQUITY OFFERING
The Company has entered into an agreement with Canaccord and
CIBC to act as co-lead underwriters, on behalf of a syndicate of
underwriters (collectively the "Underwriters"), pursuant to which
the Underwriters will purchase, on a bought deal basis, an
aggregate of 61,950,000 Common Shares of the Company at a price of
C$1.05 per share for aggregate gross
proceeds of C$65,047,500
(~US$51 million).
The Offering Price of C$1.05 per
share represents:
- 7.1% discount to the closing price of C$1.13 per share on January 20, 2021; and
- 8.2% discount to the 10-day VWAP of C$1.14 per share to January 20,2021.
The Company has granted the Underwriters an over-allotment
option to purchase up to an additional 9,292,500 common shares at
the Offering Price exercisable in whole or in part, at any time and
from time to time, up to 30 days from and including the closing
date of the Equity Offering (the "Underwriters' Option"). If
the Underwriters' Option is exercised in full, an additional
C$9,757,125 in gross proceeds will be
raised pursuant to the Equity Offering and the aggregate gross
proceeds will be C$74,804,625.
The Company intends to use the net proceeds from the Equity
Offering to advance Bomboré towards production, as well as for
working capital and general corporate purposes.
The Common Shares will be offered by way of a supplement to the
short form base shelf prospectus of the Company dated November 3, 2020 in each of the provinces of
Canada, except Quebec, as agreed to by the Company and the
Underwriters.
Closing of the Equity Offering is expected to occur on or about
January 28, 2021 and is subject to
certain conditions including, but not limited to, receipt of all
necessary regulatory approvals, including the approval of the TSXV
and applicable securities regulatory authorities.
Investor Webinar
Wednesday, January
27th, 2021 Time: 7:00 am
PST/10:00 am EST
Orezone will host an investor webinar on Wednesday, January 27th at
7:00 am PST/10:00 am EST to discuss the project financing
package and next steps in Bomboré's development. To register for
the webinar, please click here.
About Coris Bank
Coris Bank International ("CBI SA"), the subsidiary of the West
African Financial Group Coris Holding, is a Burkinabe private
universal bank with a balance sheet in excess of US$2.8 billion and is listed on the Regional
Stock Exchange of Securities (BRVM) of UEMOA. It has been the
leader of the Burkinabe market since 2016.
Maintaining and consolidating its quality standards throughout
its network coupled with its continued growth have enabled CBI SA
to obtain numerous national and international distinctions.
In 2020, CBI SA received the awards for the "Best Retail Bank
in West Africa" by the prestigious
African Banker Awards and for the "Fastest Growing Bank Partner" by
the International Finance Corporation, a subsidiary of the World
Bank Group.
The expertise of CBI SA served as a reference for the
development of the Coris Group internationally through its
establishment in seven (7) other countries in Africa: Benin, Côte d'Ivoire, Guinea Conakry,
Mali, Niger, Senegal and Togo. Further information on
CBI SA can be found on its website
(https://burkina.coris.bank/).
About RCF
RCF is a group of commonly managed private equity funds,
established in 1998 with a mining sector specific investment
mandate spanning all hard mineral commodities and geographic
regions. Since inception, RCF has supported 198 mining companies,
with projects located in 51 countries and across 32 commodities.
RCF aims to partner with companies to build strong, successful and
sustainable businesses and in doing so, strives to earn superior
returns for all shareholders. Further information about RCF can be
found on its website (www.resourcecapitalfunds.com).
About Beedie
Capital
Beedie Capital is the private investment arm of Beedie, the
largest private industrial owner, developer, and property manager
in Western Canada. Beedie
Capital partners with ambitious operators of high-growth public and
private companies across a variety of industry sectors in
North America, including a core
focus on metals and mining. Further information on Beedie
Capital can be found on its website (www.beedie.ca/capital).
About Orezone Gold Corporation
Orezone Gold Corporation (TSX.V: ORE OTCQX: ORZCF) is a Canadian
development company which owns a 90% interest in Bomboré, one of
the largest undeveloped gold deposits in Burkina Faso.
The 2019 feasibility study highlights Bomboré as an attractive
shovel-ready gold project with forecasted annual gold production of
118,000 ounces over a 13+ year mine life at an All-In Sustaining
Cost of US$730/ounce with an
after-tax payback period of 2.5 years at an assumed gold price of
US$1,300/ounce. Current Bomboré
mineral resources are in excess of 5 million ounces of gold.
Qualified Person
Dr. Pascal Marquis, Geo., Senior
VP Exploration is the Qualified Person who has approved the
scientific and technical information in this news release.
For further information please contact Orezone at +1 (778)
945-8977 or visit the Company's website at
www.orezone.com.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy the securities described herein in
the United States. The securities
described herein have not been and will not be registered under the
United States Securities Act of 1933, as amended, and may not be
offered or sold in the United
States or to the account or benefit of a U.S. person absent
an exemption from the registration requirements of such Act.
Cautionary Note Regarding Forward-Looking Statements
This press release contains certain information that may
constitute "forward-looking information" within the meaning of
applicable Canadian Securities laws and "forward-looking
statements" within the meaning of applicable U.S. securities laws
(together, "forward-looking statements"). Forward-looking
statements are frequently characterized by words such as "plan",
"expect", "project",
"intend", "believe", "anticipate", "estimate", "potential", "possible" and other similar words, or statements
that certain events or conditions "may", "will", "could", or
"should" occur. Forward-looking statements in this press
release include, but are not limited to, statements with respect to
the Bomboré project being fully funded to production, projected
first gold by Q3-2022, the Senior Debt Facility, the Convertible
Note Facility and the Equity Offering, including the anticipated
closing date and use of proceeds of the Senior Debt Facility,
the Convertible Note Facility and the Equity
Offering.
All such forward-looking statements are based on certain
assumptions and analyses made by management in light of their
experience and perception of historical trends, current conditions
and
expected future developments, as well as other factors management and the qualified persons believe are
appropriate in the circumstances.
All forward-looking statements are subject to a variety of
risks and uncertainties and other factors that could cause actual
events or results to differ materially from those
projected in the forward-looking statements including, but not limited to, delays
caused by the COVID-19 pandemic, terrorist or other violent
attacks,
the failure of parties to contracts to
honour contractual commitments, unexpected changes in laws, rules
or regulations, or their enforcement by applicable authorities; the
failure of parties to contracts to perform as agreed; social or
labour unrest; changes in commodity prices; unexpected failure or
inadequacy of infrastructure, the possibility of project cost
overruns or unanticipated costs and expenses, accidents and
equipment breakdowns, political risk, unanticipated changes in key
management personnel and general economic, market or business
conditions, the failure of exploration programs, including drilling
programs, to deliver anticipated results and the failure of ongoing
and uncertainties relating to the availability and costs of
financing needed in the future, and other factors described in the
Company's most recent annual information form and management
discussion and analysis filed on SEDAR on www.sedar.com. Readers
are cautioned not to place undue reliance on forward-looking
statements.
Although the forward-looking statements contained in this
press release are based upon what
management of the Company believes are reasonable assumptions, the Company cannot assure investors
that actual results will be consistent with these forward-looking
statements. These forward-looking
statements are made as of the date of this press release and are expressly qualified in their entirety by this
cautionary statement. Subject to applicable securities laws, the Company does not assume any obligation
to update or revise the forward-looking statements contained herein
to reflect events or circumstances occurring after the date of this
press release.
SOURCE Orezone Gold Corporation