Orezone has focused its exploration efforts in West Africa as this region offers favorable geological as well as near-surface oxidized deposits that can be explored and developed at a low cost. Burkina Faso has seen significant exploration activity over the past few years and it is here that Orezone has acquired a strategic land position over the last 20 years.
Burkina Faso Snapshot
- French-speaking West African country with 19 million people
- Flat, arid and accessible. 274,000 km² in size (similar to Colorado, the UK, New Zealand and Italy)
- Favorable geology, similar to neighboring Ghana and Mali
- Modern mining codes with reasonable fiscal and taxation policy
- Ranked 4th in Africa and 23rd out of 122 countries for Current Mineral Potential, by The Fraser Institute of Canada in its "Survey of Mining Companies 2014"
- 9 new gold mines commissioned in the last 10 years
- At approximately 1 million oz/year it ranked as the fifth largest gold producing country in Africa in 2014
- More info: CIA Fact Book
Burkina Faso is located in West Africa, one of the world's fastest growing gold producing regions. It has a population of approximately 19 million people, and a non-elected transition government since November 2014. The presidential and legislatives elections are planned for October 11, 2015 and the new President is expected to be inaugurated by November 19, 2015. French is the official language of the government and business, giving Canadian companies an advantage over competitors who come from countries that are not French speaking.
Located between Ghana and Mali, the second and third largest gold producing countries in Africa, it is underlain by rocks of the same age and history as its neighbors but it is still relatively under-explored compared to its neighbors.
Burkina Faso's terrain is flat, making it very accessible; its climate is currently arid, but a previous period of hot and rainy climate has resulted in the oxidization of near surface material. These aspects make it easier to make discoveries, and less expensive to bring discoveries into production, two important factors for successful mining projects.
Gold Mining & History
Burkina Faso is emerging as a significant gold producing country as it shares similar geology as its neighbors, Ghana and Mali, which are the second and third largest gold producing countries in Africa.
Artisanal gold mining has been practiced in the region for centuries, going back to the time when this part of Africa was known as the "Gold Coast". Although predominantly a farming country, gold has recently become the country's largest export commodity.
Orezone accumulated a strategic land position between 1997 and 2002 when there was very little interest in gold projects. During this period, gold production was declining in many countries, however, in West Africa, growth in gold production increased 50% because of its favorable geology, modern mining codes, political stability, reasonable fiscal and taxation regimes as well as government support of the development of natural resources. New discoveries were made, and were brought into production in a timely and efficient manner to accepted international environmental standards.
Burkina Faso was not part of this boom because of a less attractive fiscal policy. In 2003, policies were improved and a study by BRGM, a French government agency that does geological surveys in developing countries, concluded that Burkina Faso has the same age and type of rocks as Ghana and Mali. Interest in Burkina Faso's resource potential continues to grow with 7 producing gold mines built since 2007 and 2 more in construction. It ranks fifth amongst the African gold producing nations, and it is now attracting the interest of mining companies because it is pro-mining permitting process (both government and local support) along with good infrastructure.
Modern Mining Code
The mining legislation of Burkina Faso provides for certain taxes that are specific to mining activities and offers certain tax incentives for titleholders at different stages of their projects. Like many countries, Burkina Faso has recently revisited its Mining Code in view of increasing its benefits from the sector and on June 26, 2015, the Conseil National de la Transition approved a new Mining Code which was subsequently passed into law on July 16, 2015. New items in the 2015 Mining Code include, amongst others, the introduction of a new tax of 1.0% of the gross revenues to support a Mining Fund for Local Development (which was created at the request of the International Monetary Fund and World Bank (“WB”) as a condition for future financial support of the country by the WB), the removal of the 10% reduction in income tax rates for the mining sector, penalties for changes in production levels, the obligation for a mining company to pay a dividend if an after-tax profit is made and adequate reserves have been accumulated, and for feasibility studies to include a plan for the training and the promotion of local mining executives. The Company has been informally advised that the Mining Code in force at the time of submission of the application shall apply to the mining permit upon its approval, which in the Company’s case was the 2003 Mining Code. However, the permit may also be subject to certain changes from the 2015 Mining Code that would ultimately be applicable to all operating mines, including those under the terms of the 2003 Mining Code.
Burkina Faso ranks 4th in Africa and 23rd worldwide in Current Mineral Potential Index, in the “Survey of Mining Companies 2014” conducted by The Fraser Institute of Canada. The Current Mineral Potential Index is based on respondents' answers to the question about whether or not a jurisdiction's mineral potential under the current policy environment encourages or discourages exploration.
The country has attracted considerable foreign investment since 2005 with seven gold mines having been commissioned to date, including the +6 Moz Essakane mine developed by Orezone, and two other gold mines currently in construction.