Orezone Gold (TSX: ORE) reported record revenue for the second quarter, its first full period running two mines, though costs ran ahead of the company’s full-year target.
Revenue reached $271.6 million in the three months ended June 30, up from $185.9 million in the first quarter. Net earnings attributable to shareholders were $45.2 million, or 7 cents a share, against $39.6 million and the same per-share figure three months earlier. On an adjusted basis, earnings were 8 cents a share, up from 7 cents.
Adjusted EBITDA climbed to $134.5 million from $94.2 million. Operating cash flow was $109.3 million, and free cash flow $80.6 million.
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The quarter closed with $96.7 million in cash, roughly double the $48.3 million held at the end of March, plus bullion valued at $21.2 million.
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Gold production totalled a record 58,566 ounces, up from 38,789 in the first quarter, with 38,063 ounces coming from Bomboré and 20,503 from Casa Berardi, acquired in late March. Sales were 60,654 ounces.
The average realized price slipped to $4,401 an ounce from $4,887, reflecting deliveries under the gold stream sold to Franco-Nevada Corp. to help finance the Casa Berardi purchase along with the decline in gold pricing.
Cash costs rose to $2,136 an ounce sold from $2,078, and all-in sustaining costs to $2,449 from $2,245. That leaves AISC above the $2,200 to $2,400 range guided for the year, though the first-half figure of $2,371 sits inside it. Bomboré ran at $2,278 an ounce, Casa Berardi at $2,558.
Consolidated guidance of 222,000 to 247,000 ounces was left unchanged, and the company said first-half results are tracking to plan. Hitting it will require a step up, with 97,355 ounces were produced through June, leaving at least 124,645 ounces to come. Orezone attributed the weighting to shortfalls in explosive deliveries that forced changes to the short-term mine plan and cut hard rock grades, and expects costs to ease as feed grades improve.
“Both operations performed in line with expectations, delivering strong financial results and robust cash flow,” said president and chief executive Patrick Downey.
Commissioning of the Stage 2A hard rock expansion at Bomboré remains on schedule for the fourth quarter. A life-of-mine study for Casa Berardi is due in September, with a preliminary economic assessment for the Heva-Hosco project to follow.
Orezone Gold last traded at $2.65 on the TSX.
