RCF, Beedie Capital to invest in Orezone’s African gold project

Vancouver, British Columbia-based mining company Orezone Gold Corp has secured commitments of more than US$182 million to finance the construction of its Bomboré Gold Project in Africa.

Vancouver, British Columbia-based mining company Orezone Gold Corp has secured commitments of more than US$182 million to finance the construction of its Bomboré Gold Project in Africa. The funding includes a US$35 million 8.5% convertible note from US mining private equity firm Resource Capital Funds and Canadian family office Beedie Capital.

PRESS RELEASE

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”).

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.

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.