Shares of Semafo Inc (TSE:SMF) bounced around on Tuesday, after the company announced the initial resource estimate for the recently acquired Natougou gold deposit in Burkina Faso.
Semafo opened strong but turned negative midday as the gold price retreated and investors digested the NI 43-101 compliant estimate that showed indicated mineral resources of 5.79 million tonnes at a grade of 5.87 g/t Au for 1.1 million ounces of contained gold.
Inferred resources on the Natougou deposit which Semafo acquired as part of its takeover of Australia's Orbis Gold stand at 3.93 million tonnes at a grade of 3.49 g/t Au for 0.44 million ounces of contained gold.
The Montreal-based company is worth $1.1 billion on the Toronto Stock Exchange after gaining 26% in less than three weeks following the closing of the Orbis deal and strong financial results.
The $139 million Orbis acquisition brought with it three gold projects in the West African country with the flagship Natougou project located about 600 kilometres east of Semafo's operating Mana mine.
Semafo will spend more than $20.5 million on exploration in 2015, including an initial $2.5 million already under way at Natougou for a feasibility study expected in the first half of next year. The goal of the 22,000 meter in-fill drilling campaign is to convert Natougou’s inferred resources to indicated resources according to the company.
Semafo's 2015 production guidance is 245,000 – 275,000 ounces and is targeting further costs reduction with an expected AISC of $715 – $750/oz.
Semafo in February announced its 2014 reserve and resource statement that upped Mana's total mineral reserves and resources by 250,000 ounces and its reserve grade by 7% to 3.01 g/t Au.
Burkina Faso is the continent's fourth largest gold producer after Mali and has commissioned eight new mines over the past six years.
Image by Jeff Attaway
The post Semafo outlines 1.1m oz gold at Burkina buy appeared first on MINING.com.
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