Nov 19 2014
True Gold Mining Inc. ("True Gold" or the "Company") today provided the following construction and capital expenditure update on the Karma Gold Project ("Karma" or the "Project"): To date, the Company has spent and committed approximately US$51.5 million at Karma, or more than 39% of the US$131.5-million initial capex.
Pre-stripping of the Rambo Deposit, Karma's highest grade deposit and the first to be mined, will begin in December 2014. To date, all aspects of the Project are on time and on budget.
"We continue to make excellent progress at Karma and remain on track to pour gold by the end of next year," stated Dwayne Melrose, True Gold's President & CEO. "Construction progress continues at a strong pace, and you can see the mine taking shape. We have an exceptional mine-building team in Burkina Faso, which includes more than 200 people from local communities. The capacity of this team to work efficiently and cost-effectively has increasingly become a competitive advantage for the Company."
Karma is fully funded and permitted, and is one of a select few gold mines under construction globally. It is scheduled to be the next gold mine to go into production in Burkina Faso. During mine operations, True Gold will employ over 400 people at Karma.
Additional Mine Development Details
- The Company expects Karma to produce approximately 150,000 ounces gold in 2016(1).
- Key personnel are in place; recent hires include the Mine Superintendent and the Mine General Foreman.
- Procurement was 33% complete at the end of October, ahead of the planned 23%.
- Earthworks on the plant site terraces are complete, one month ahead of schedule.
- Civil works were 20% complete at the end of October, ahead of the planned 14%.
- Work has started on foundations for the ADR plant, cement storage facility, and maintenance shop.
- Administration, security and medical buildings are built; mine offices are 90% complete.
- Two dozers and two graders, part of the mining fleet, were delivered to site November 11.
- All mining fleet vehicles and equipment are expected on-site by January 2015.
- Major earthwork projects, haul roads, raw water storage pond and the base for the heap leach pad will begin in January 2015.
Funding Update
True Gold has approximately CAD$49.1 million in the treasury, and it expects to draw down the next tranche under its facility with Franco-Nevada and Sandstorm by December 2014. Over the next 10 months, the Company expects to draw down the balance of the US$100 million financing. With the Company's portion of up-front capital expenditures substantially invested, Franco-Nevada and Sandstorm will fund the majority of the remaining capex through to construction completion.
Phase II, Potential Mine Expansion Update
As noted in the October 21, 2014 news release, True Gold recently completed a Preliminary Economic Assessment ("PEA") on the North Kao Deposit ("North Kao") that demonstrated the potential to enhance the 8.5-year mine life outlined in the Karma Project Definitive Feasibility Study ("DFS"). The PEA on North Kao, or the Phase II expansion scenario, supported a heap leach mine that would produce an average of 118,000 ounces gold a year over 2.5 years.
The PEA indicated the potential to add US$118 million in after-tax free cash flow to the DFS economics. North Kao yields an after-tax IRR of over 200% and adds approximately US$70 million to Karma's after tax NPV. The Company plans to carry out infill drilling to upgrade the Inferred resources at North Kao, which is the northern extension of the existing Kao Deposit ("Kao"). Upon upgrading the resource category, True Gold will be able to advance further mine schedule optimizations, however there is no certainty the resources will be converted to reserves.
Exploration Update
True Gold has identified more than 40 high-priority exploration targets over the 856-square-kilometre property. Targets include high-grade rock values associated with gold-in-soil anomalies and historical workings at Karma that have yet to be tested. The Company has budgeted approximately US$5 million for exploration through 2015. It will be focused on discovering new domains of open-pit, leachable material that could be incorporated into a future mine plan. Mapping of the Kao Trend is currently underway. Over a strike length of more than 10 kilometres, the trend hosts the Kao/North Kao pair of deposits open to the north and south, as well as the Nami deposit and its extensions and numerous earlier stage targets, including Anomalies B & C, Idriss, and Bonguirga.
Qualified Persons
Peter C. Carter, P. Eng., Chief Operating Officer and Vice President Engineering of the Company, is the designated Qualified Person for this news release within the meaning of National Instrument 43-101 Standards of Disclosure for Mineral Projects and has reviewed and verified that the technical information contained in this release is accurate and approves of the written disclosure of same.
Scott Heffernan, P. Geo., Vice President Exploration of True Gold and is the Company's designated Qualified Person, within the meaning of NI 43-101, for resource estimation information contained in this news release. He has reviewed and verified that such information is accurate and approves of the written disclosure of same.
About True Gold
True Gold Mining Inc. is where gold comes to life. We are committed to growing a successful gold exploration, development and production company by focusing on projects with low costs, low technical risks and solid economics. The Company's board, management, and technical teams have proven track records in gold exploration, development, operations and production worldwide.
Additional information about the Company and its activities may be found on the Company's website at www.truegoldmining.com and under the Company's profile at www.sedar.com.
ON BEHALF OF THE BOARD
Dwayne Melrose, President and CEO
Source: http://www.truegoldmining.com/