West African Resources Limited (WAF) and Orezone Gold Corporation established a memorandum of understanding (MOU) to study synergies in their mining operations that might unleash considerable value for all stakeholders.
Orezone’s Bomboré and WAF’s Sanbrado operating centres are 14 km apart and currently host 11 million ounces of gold. WAF is also developing the 7.7Moz Kiaka gold project, situated 45 kilometres south of Sanbrado, with gold production set to begin in 2025. The two active mines, development projects, and exploration leases encompass a continuous region of about 1,800 km and 100 strike km of highly promising greenstone belts and structures.
The MOU between the two gold mining companies, who operate separately in Burkina Faso, is intended to yield considerable savings to their respective operations during the life of the mine, with a focus on the following areas:
- Grid Power: Orezone is nearing completion of the Bomboré mine’s connection to the national power grid, and the grid will also power the Kiaka process plant. Both companies have agreed to study the possibility of extending the Bomboré grid power spur line to Sanbrado, which would significantly lower Sanbrado’s processing costs.
- Thermal Back-up Power: Connecting the two mines would allow Bomboré to use Sanbrado’s 24MW HFO and LFO power plants for backup power to keep operations running.
- Renewable Energy: Both companies will study the feasibility of establishing a centralised solar power plant to reduce electricity costs at their facilities and capitalise on the economies of scale of a bigger jointly funded project.
- Procurement and Supply Chain: The companies will attempt to minimise consumable, storage, and transport expenses by combining their purchasing power.
- Common Spares: Both companies will consider whether critical spares may be shared between operations to optimise inventory levels.
- Community and CSR: To guarantee that the local community receive the most benefits possible, companies will collaborate in the areas of CSR, training, employment, and livelihood restoration programs. The establishment of youth employment initiatives and training facilities, as well as a focus on skill development, health care, farm management, and environmental restoration
- Security: Both companies will look for opportunities to work together and reduce security expenses.
“The ongoing discussions between WAF and Orezone reflect a commonsense approach to reduce costs and optimise invested capital. We expect this cooperative will enable both companies to enhance returns to shareholders, as well as deliver on the long-term future of gold mining in this region of Burkina Faso,” WAF Executive Chairman and CEO Richard Hyde said.
“This MOU represents an effective way to generate long-term value from each of our assets in Burkina Faso with the active participation of our neighbouring communities. With the broader industry continuing to face cost inflation, this MOU represents an important opportunity to further improve our cost structure and create further value for our shareholders. As Orezone and WAF look to advance these initiatives, we will continue to pursue the highest standards in safety, along with responsible and meaningful engagement with our employees, communities, and other stakeholders,” Orezone President and CEO Patrick Downey stated.
