Orezone completes Hecla Quebec acquisition

Executive Summary

• Orezone Gold Corp. has completed the acquisition of Hecla Quebec Inc. (a subsidiary of Hecla Mining Company), gaining 100% ownership of the operating Casa Berardi gold mine and a portfolio of exploration properties in Quebec, Canada.
• The transaction is valued at $352 million in upfront and deferred consideration, plus up to $241 million in contingent consideration based on gold prices and future production.
• Orezone is diversifying into a Tier 1 jurisdiction, adding a proven, cash-flow-generating mine to its portfolio, while financing the deal through cash on hand and a new gold stream with Franco-Nevada Corp.

Key Details

• Assets Acquired:
  • Casa Berardi Mine: Operating gold mine in Quebec; produced over 3.2 million oz of gold to date.
  • Resource Base: 1.2 Moz Measured & Indicated (M+I) and 1.2 Moz Proven & Probable (P+P).
  • Heva-Hosco Project: Advanced-stage exploration project with 1.2 Moz M&I and 0.7 Moz Inferred resources along the Cadillac-Larder Lake Break.
  • Duverny Project: Early-stage project north of Val d'Or along the Chicobi Break.
  • Opinaca-Wildcat Properties: Located in the James Bay region near the Eleonore mine.
• Transaction Consideration:
  • Total Upfront/Deferred: $352 million.
  • Contingent Consideration: Up to $241 million.
  • Payment Structure on Closing:
    • $160 million in cash.
    • 65,757,265 common shares issued to 1576447 B.C. ULC (Hecla subsidiary), representing 9.9% of post-closing shares.
  • Deferred Payments: $80 million due at 18 months and 30 months post-closing.
  • Contingent Payments:
    • $10 million linked to gold prices.
    • $231 million based on permitting and future gold production from the Principal and WMCP open pits at Casa Berardi.
• Transaction Financing:
  • Gold Stream: Concurrently entered into with an affiliate of Franco-Nevada Corp.
  • Upfront Deposit: $100 million provided by Franco-Nevada upon closing.
  • Stream Terms:
    • Fixed deliveries of 1,625 ounces of gold per quarter from 2026 to 2030.
    • Post-2030: 5.0% stream percentage on acquired properties (2.5% for certain properties).
    • Until deposit is nil: Franco-Nevada buys refined gold at spot price; 20% paid in cash, 80% reduces the deposit.
    • After deposit is nil: Franco-Nevada buys refined gold at 20% of spot price.
• Operational Plans:
  • Integration of Casa Berardi into Orezone through 2026.
  • Updated 2026 guidance to be provided in Q2 2026.
  • Trade-off studies underway to optimize mine plan and ramp up underground production using existing infrastructure.
  • Updated mine plan and economic study expected in Q4 2026.
  • Exploration drilling to reinitiate in Q2 2026, targeting down-plunge extensions.
  • Targeted drilling volume: 80,000 to 100,000 metres per annum over the next several years.

Notable Quotes

• "This acquisition marks a strategic and transformational expansion into a Tier 1 jurisdiction for Orezone. The addition of Casa Berardi, a proven and cash-flow-generating mine, together with the Quebec exploration portfolio, positions the company as a diversified multiasset producer, with an established and self-funded growth profile." — Patrick Downey, President and CEO, Orezone Gold Corp.