Teranga Gold Corporation has increased gold reserves at the Wahgnion development project in Burkina Faso by almost 40 per cent to 1.61 million ounces and extended mine life to 13 years.
An updated mineral reserve estimate has added 450,000 ounces to open pit reserves, increasing proven and probable mineral reserves to 31.07 million ore tonnes grading 1.61 g/t gold.
The initial proven and probable reserves in the 2017 feasibility study totalled 21.4 million tonnes grading 1.69 g/t for 1.16 million ounces. The project's resource has also increased 33%.
New mineral resource and mineral reserve estimates are based on the initial four deposits - Nogbele, Fourkoura, Samavogo and Stinger - and include drill results from a 73,000-metre infill drill program completed in 2017.
Teranga has also completed an update to the feasibility study which has extended initial mine life from 9 to 13 years as part of the company's ongoing goal to increase mine life and improve the mine plan.
A follow-up development drill program is being initiated within the existing deposits to further increase reserves and lower strip ratios.
Beyond the four initial deposits, a multi-year exploration drilling program will focus on a number of highly prospective exploration targets within trucking distance of the plant to further extend Wahgnion’s mine life and optimise the mine plan.
Teranga's president and CEO Richard Young said, “The 40% increase in Wahgnion reserves exceeded our initial guidance and expectations and, most importantly, led to an improved five and 10-year production and cash flow profile relative to last year’s initial feasibility study.
“With average annual gold production of 132,000 ounces through to 2024, Wahgnion is expected to increase company-wide annual production by 50% to between 300,000 and 350,000 ounces.
"This will generate free cash flow to fund our growth plans, and move us closer towards our goal of becoming a multi-asset, mid-tier gold producer in West Africa.”
Construction at the fully funded Wahgnion development project remains on track. Front-end engineering and detailed design is essentially complete, and the steel fabrication and equipment manufacture in preparation for delivery to site are on schedule.
Despite a heavy rainy season, the concrete pour schedule for plant construction remains on schedule for the mill foundations, primary crusher, leach tanks and reclaim areas in preparation for the next phase of construction, mechanical and structural steel erection.
Mining activities have commenced to construct a tailings management facility and to produce a large ore inventory ahead of plant commissioning.
Staffing for operations has been progressing well with a significant focus on the execution of the operations readiness plan. Additionally, community-housing construction is progressing well with the first wave of households successfully relocated.
Chief operating officer Paul Chawrun said, “The project is running on schedule with first gold pour expected December 2019.
“The capital budget remains largely in line with the estimates outlined in the initial feasibility study. Half-way through our project commitments and near the end of the rainy season, we are not seeing any material increases other than unfavourable variances for fuel and foreign exchange, which is moderately impacting equipment, labour and material costs. The majority of our project contingency remains.”
“We have made great progress at Wahgnion,” he said. "We have materially improved the first five-year cost profile, reducing all-in sustaining costs by $43 per ounce compared to the previous plan.
"We have incorporated a high-grade stockpile strategy, similar to Sabodala’s. And, we have extended the mine life to 13 years, delaying the deposits in the mine plan that are not yet fully drilled off.”
The 2017 drill program and subsequent resource modelling has identified areas within the reserve deposits that provide opportunity to further increase reserves and lower strip ratios at a number of deposits.
In addition, the company is undertaking a multi-year regional exploration program to target multiple highly-prospective near-mine targets over five permits that cover an area of over 900 sqkm and surround the mine licence.
The objective of these regional programs is to extend and optimise the life of mine by identifying additional deposits to process at the centrally located plant.