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TABLE OF CONTENTS Sep 1 - 7, 2014 Volume 100 Number 29 - 0 comments

All systems go for Roxgold's Yaramoko mine

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By: Trish Saywell
2014-08-27

It took just three months for authorities in Burkina Faso to approve the environmental and social impact assessment Roxgold (TSX: ROG; US-OTC: ROG) submitted for its Yaramoko gold project in the country’s Houndé greenstone belt, and president and CEO  John Dorward says the company is on track to receive its mine permit in the next couple of months.

“It was very fast,” Dorward says of the ESIA approval Roxgold received on Aug. 19. “Typically Burkina Faso is more efficient than a lot of other jurisdictions — they’re highly motivated to support the gold industry and like seeing projects come along.”

At the same time, he says, the project has a limited scale.

“Yaramoko is pretty straightforward in terms of its footprint so we don’t have to relocate households,” he explains. “So it’s a combination of a good jurisdiction that is generally mining friendly and a reasonably straightforward project.”

Roxgold expects to start breaking ground in the fourth quarter with the first gold pour to follow before the end of 2015. Yaramoko is 200 km southwest of Ouagadougou.

Dorward says he expects to finalize Roxgold’s debt financing within the fourth quarter. The company announced on June 26 that it had executed a project finance mandate with Société Générale Corporate & Investment Banking and Credit Suisse AG. The mandate set forth a US$75 million senior project debt facility. “The credit committee is going through its final approval so that they can issue their commitment letter,” Dorward confirms. “So we would anticipate that before the end of September.”

Roxgold is selecting an engineering, procurement and construction management contractor and has placed orders and paid deposits for a semi-autogenous grinding mill. It has also selected tenders for high-voltage equipment and some of the steel required for a portal tunnel. And the downturn in global mining has made much of it more affordable.

“We’re seeing good pricing and good terms on everything,” Dorward says. “Whilst access to capital is more difficult than in the past, it’s actually a good time to be doing things on the ground. A lot of heat has gone out of the market in terms of inflationary pressure.”

Finally, negotiations with SONABEL, Burkina Faso’s national electricity provider, are advancing and the company expects to finalize these in the fourth quarter.

Roxgold anticipates that it can save costs by connecting the project’s future processing plant to the 90 kilovolt power line currently under construction within 4 km of Yaramoko’s 55 zone.

Based on a feasibility study completed in April, the planned underground operation would run at 750 tonnes per day and produce an average of 99,500 oz. gold a year over its 7.4-year mine life at all-in sustaining costs of US$590 per oz., a 17% decrease from estimates in the preliminary economic assessment. Average total cash costs including royalties are pegged at US$467 per oz., a 12% reduction from the PEA.

The study was based only on the project’s flagship 55 Zone’s indicated resource, which, at a cut-off grade of 5 grams gold per tonne, stands at 1.6 million tonnes grading 15.80 grams gold per tonne for 810,000 contained oz. gold.

Elsewhere in Burkina Faso, Roxgold continues to explore its Bagassi South target — part of its Yaramoko permit and just 1.8 km from the project’s 55 zone. Roxgold just wrapped up its drilling program at Bagassi South but will resume drilling in the fourth quarter after the rainy season ends.

“We’re very encouraged by what we’re seeing so far,” Dorward says. “We’re looking to progress that project as well in the fourth quarter. It’s a pretty well-defined target that we’ve done some infill and extension drilling on and at some point, if it continues to reward the drill bit, then it might advance and could be something the development guys will look at.”



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Photos

A closeup of the terrain at Roxgold's Yaramoko gold project in Burkina Faso. Credit: Roxgold
A closeup of the terrain at Roxgold's Yaramoko gold pro...
Core samples with visible gold extracted from Roxgold's Yaramoko gold project in Burkina Faso. Credit: Roxgold
Core samples with visible gold extracted from Roxgold's...

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