AMN - BURKINA FASO: Positive Natougou feasibility study

SEMAFO Inc has released a positive feasibility study for its Natougou gold project, located 320 km east of Ouagadougou in Burkina Faso. SEMAFO has entered into a commitment letter with Macquarie Bank Limited to amend its existing credit facility.

Natougou feasibility study highlights during the first three years are:

-          Average annual production of more than 226,000 oz

-          Average total cash cost1 of $283/oz and all-in sustaining cost of $374/oz

-          Average head grade of 5.72 grams/tonne at a gold recovery rate of 93.8%

Production of some 1.2 Moz at total cash cost of $408/oz and a gold recovery rate of 92.9% over a projected mine life in excess of seven years:

-          Life of Mine all-in sustaining cost of $518/oz including capitalised stripping and sustaining capital expenditures

-          Maiden open pit mineral reserves of 9.6 million tonnes at a grade of 4.15 grams/tonne gold

-          Initial capital expenditures: $219 million, which includes $42 million in pre-stripping expenditures and an $18-million contingency.

Project economics (base case at $1100/oz):

-          After-tax 5% NPV: $262 million

-          After-tax IRR: 48% and payback period: 1.5 years.

Targeted construction start-up: Year-end 2016, expected first gold pour: second half of 2018 with first year of full production in 2019.

Project Milestones

-          Complete permitting by year-end 2016

-          Complete detailed engineering in fourth quarter of 2016

-          Construction start-up by year-end 2016

-          Ongoing exploration with the aim of increasing reserves and resources and enhancing economics as of the fourth year of the mine life.

www.semafo.com

News courtesy of International Mining