Orezone reveals billion-dollar potential at Casa Berardi

Casa Berardi plan puts a billion-dollar value on Orezone’s Quebec expansion

Orezone Gold Corporation (ASX:ORE; TSX:ORE; OTCQX:ORZCF) has put a large number behind its newly acquired Casa Berardi operation: an after-tax net present value of US$1.046 billion over a planned 14-year mine life. The Quebec mine is forecast to produce 1.63 million ounces of gold between 2027 and 2040, averaging 116,457 ounces a year at an all-in sustaining cost of US$1,877 per ounce.

The production profile is designed to build rather than peak immediately. After an initial period of equipment purchases, underground development and open-pit waste stripping, Orezone expects average annual output to reach 132,000 ounces between 2030 and 2038, with AISC falling to US$1,776 an ounce across that period. The plan assumes 1.4 million tonnes of ore processed annually and total capital expenditure of US$961.6 million, including US$638 million of sustaining capital and US$323.6 million of non-sustaining capital.

Underground restart anchors the production strategy

Casa Berardi’s plan combines underground and open-pit mining through the existing mill. Orezone intends to maintain production from the West Mine through 2038 and restart the previously producing East Mine within three years, with East Mine operations scheduled to run from 2029 to 2038. The underground plan supports a 12-year mine life and relies on renewed development, additional equipment and a recently mobilised mining contractor to lift lateral development rates.

Open-pit production moves through four planned pits. The F134 pit is scheduled to supply ore in 2027 and 2028, while the F160 expansion is expected to resume ore mining in late 2028 and continue to 2031. The Principal pit is scheduled for 2031 to 2038, followed by the WMCP pit from 2034 to 2040. Several of those stages require further permit amendments or approvals, including the F134 Phase 2 and F160 expansions.

Gold price assumptions do much of the economic heavy lifting

The base case uses September 2026 consensus gold prices of US$4,632 an ounce in 2027, US$4,518 in 2028, US$4,378 in 2029 and US$3,570 from 2030 to 2040. On those assumptions, after-tax free cash flow totals US$1.443 billion and revenue net of the Franco-Nevada gold stream reaches US$5.837 billion. Franco-Nevada receives fixed deliveries of 6,500 ounces a year from 2027 to 2030, followed by deliveries equal to 5% of production, while Orezone receives 20% of the spot price for streamed ounces.

The sensitivity is material. A 15% reduction in the gold price assumption cuts after-tax NPV to US$660 million, while a 15% increase lifts it to US$1.426 billion. The same US$1.426 billion NPV is shown at a US$4,350-an-ounce spot price assumption, based on the September 11 closing price. That range makes the headline valuation useful, but not independent of the metal price environment.

PEA status and JORC qualification remain important caveats

The mine plan is classified as a Preliminary Economic Assessment because it includes Inferred Mineral Resources, and Casa Berardi has no defined Mineral Reserves. The resource estimate is also a foreign estimate prepared under Canada’s NI 43-101 framework rather than the JORC Code. Orezone cautions that a Competent Person has not done sufficient work to classify it as a JORC Mineral Resource, and that there is no certainty this will occur after further evaluation or exploration.

The company plans to complete the work required for JORC verification by January 2029, funding it from internal cash flow. A supporting NI 43-101 technical report is due within 45 days of the announcement. Until then, the production schedule should be read as a preliminary operating and economic model rather than a reserve-backed mine forecast.

Exploration offers upside beyond the published model

Orezone is ramping up Casa Berardi drilling towards 100,000 metres a year. It has identified potential to expand underground zones, improve the grade mix, explore beneath existing pits and test the largely underexplored northern side of the Casa Berardi Fault Zone. The company also says the mill has been averaging about 4,025 tonnes a day since its acquisition, above the roughly 3,835 tonnes a day assumed in the plan, with daily rates as high as 4,775 tonnes.

Those opportunities are not included in the published forecasts. The immediate test is therefore execution: whether Orezone can fund the development programme, secure the required pit approvals, restart the East Mine and convert exploration into mineable material without eroding the stated cost profile. The company also expects to release a preliminary economic assessment for its Heva-Hosco development project in Quebec in the fourth quarter.