Orezone Resources Inc. (TSX: OZN) is on schedule at its Essakane Gold Project in Burkina Faso, and has reported an upped resource base and prospects of a higher yield, but the Canadian company will have to dig deep to bring the project on stream by 2010.

The Ottawa-based company now expects to spend US$471.7-million, a figure that includes sustaining and working capital, to bring the gold mine into production after capital costs rose by 21% from US$347-million, according to an update to the Definitive Feasibility Study (DFS) for Essakane released this week.

Orezone says the increases are a result of the increased plant capacity, increased allowances for contingencies and owner's costs, changes in US/Euro exchange rates and general inflation.

Sustaining capital is now put at US$26-million and working capital US$25.7-million which has also risen by US$1-million over what was estimated in the last DFS, it announced to the TSX this week.

However, cash costs, including royalties and government charges, fell slightly from earlier projections, to US$358 per ounce, assuming a US$400 per ounce gold price and $85 per barrel oil price, Orezone added.

Thanks to high gold prices, recoverable reserves increased by 18% from 2.5-million ounces at 1.78 grams per ton to 3-million ounces at 1.67 grams per ton cut-off using a US$600 gold price as compared to US$500. The mine life was revised from 8.5 to 9.4 years.

Orezone expects a 16% increase in production to an average of 330,000 ounces per year for the first four years after remodelling the CIL plant capacity from 5.4-million tons per year to 7.5-million. It also expects a faster project payback period, with production expected to peak at 374,000 ounces.

It said all long lead items including the grinding circuit, the fleet and generators have been ordered with expected delivery dates in time for the start-up.

Our goal is to continue to run the plant at higher capacity, well past the first few years, by focusing on the known satellite oxide deposits. Higher gold prices will also yield an increase in reserves, said Ron Little, Chief Executive Officer for Orezone.

While the company owns other properties in the country, as well as in Niger, Essakane will be its first producing mine, when it comes on stream in early 2010. Orezone took control of the late-stage project last year through the acquisition of Gold Fields' 60% stake in the West African-based project.

It paid the gold major US$150-million cash for the stake and issued common shares valued at about US$50-million, granting Gold Fields a 12.2% stake in the company.