Orezone enters definitive deal to acquire Hecla Quebec

Executive Summary

• Orezone Gold Corp. has entered into a definitive agreement to acquire Hecla Quebec Inc. (a wholly owned subsidiary of Hecla Mining Company) for 100% ownership of the operating Casa Berardi gold mine and a portfolio of exploration properties in Quebec.
• The total consideration includes upfront and deferred payments of $352 million and contingent consideration of up to $241 million, bringing the total potential deal value to $593 million.
• The transaction is expected to close in the first quarter of 2026, subject to regulatory approvals, and will be financed using cash on hand and a new $100 million gold stream agreement with Franco-Nevada.

Key Details

• Transaction Structure & Consideration:
  • Upfront and Deferred Consideration ($352 million):
    • $160 million in cash payable upon closing.
    • $112 million in Orezone common shares (representing 9.9% of pro forma issued and outstanding shares, specifically 65,757,265 shares) payable upon closing.
    • $80 million in deferred cash payments: $30 million at 18 months post-closing and $50 million at 30 months post-closing.
  • Contingent Consideration (Up to $241 million):
    • Gold Price Link: Up to $10 million linked to gold prices ($5 million if gold averages ≥$4,200/oz in year 1; $5 million if gold averages ≥$4,200/oz in year 2).
    • Production/Permitting Link: Up to $231 million based on permitting and future gold production from the Principal and WMCP open pits:
      • $20 million upon grant of permits ($10 million for Principal pit, $10 million for WMCP pit).
      • Up to $211 million through continuing payments: $80/oz for the first 500,000 oz of production (up to $40 million) and $180/oz for subsequent production (up to $171 million).
• Financing:
  • Upfront cash consideration funded by cash on hand and a $100 million gold stream from Franco-Nevada.
  • Franco-Nevada Gold Stream Terms:
    • Fixed deliveries of 1,625 ounces of gold per quarter for the first five years.
    • Stream percentage of 5.0% of gold production thereafter.
    • Orezone receives cash equal to 20% of the spot gold price for each ounce delivered.
• Asset Details (Casa Berardi Mine):
  • Located in the Abitibi region of Quebec (Tier 1 jurisdiction).
  • Reserves (as of Dec 31, 2024): 1.3 million ounces (14.4 million tonnes at 2.79 g/t Au).
  • Resources (as of Dec 31, 2024):
    • Measured and Indicated: 900,000 ounces (4.7 Mt at 5.92 g/t Au).
    • Inferred: 500,000 ounces (2.4 Mt at 6.01 g/t Au).
  • Production History: Produced over 3.2 million ounces since 1988.
  • 2026 Guidance: 83,000 to 91,000 ounces of gold production (5-year average prior to guidance: 106,100 ounces).
• Exploration Portfolio:
  • Includes 19,150 hectares covering 37 kilometers of strike along the Casa Berardi fault.
  • Heva-Hosco Project: Most advanced exploration asset with 1.2 million ounces indicated and 600,000 ounces inferred resources, located 150 km southeast of Casa Berardi.
• Closing Conditions:
  • Anticipated closing in Q1 2026.
  • Subject to regulatory approvals including Toronto Stock Exchange, Australian Securities Exchange, and expiry of waiting period under the Competition Act (Canada).
• Advisers:
  • Orezone: BMO Capital Markets (Financial Adviser), Stikeman Elliott LLP (Legal Counsel).
  • Hecla: GenCap Mining Advisory (Financial Adviser), Cassels Brock & Blackwell LLP (Legal Counsel).

Notable Quotes

• Patrick Downey, President and CEO of Orezone: "This transaction marks a significant inflection point for Orezone as it adds a proven, cash-flow-generating asset to our portfolio and provides asset diversification in a Tier 1 jurisdiction... The combination of Casa Berardi and Bombore creates a multiasset platform with strong production and free cash flow, positioning Orezone for near-term growth and long-term value creation."
• Paul Brink, President and CEO of Franco-Nevada: "We are delighted to partner with Orezone in this transformative transaction to acquire the Casa Berardi mine and portfolio of exploration properties in Quebec... Patrick and the Orezone team have an excellent track record operating and developing mines, and we look forward to their future success as they advance Casa Berardi's next chapter."