True Gold Mining Inc. announced today that it has resumed activity at its Karma Gold Project in Burkina Faso. The Company expects to pour first gold at Karma in March 2016.
Specific developments related to the restart of activity include the following:
- A site clean-up and repair program has begun with a ramp-up to full construction set for the end of the month. Specific activities planned in the coming weeks include the remobilizing and commissioning of the mine fleet, ordering of liners and piping, and surveying of ponds and other locations. The local workforce will be re-engaged as construction accelerates.
- True Gold and the Government of Burkina Faso will continue extensive communication and discussion with community leaders through a reconstituted Community Liaison Committee.
- Karma remains fully funded through construction to first gold pour, which is expected in March 2016. True Gold has $31 million in cash, and up to $62 million under our finance facility with approximately $70 million of project cost remaining. The Company continues to have full support from its partners, Franco-Nevada and Sandstorm Gold.
"We are pleased to be returning to work at Karma with the support of the Government of Burkina Faso and leaders in the local community," said Christian Milau, President and CEO, True Gold Mining. "We have said from the beginning of this process that it is our intention to work towards a long-term solution that builds trust with stakeholders in the community and reduces the risk of similar challenges in the future. As we move toward full construction, we remain committed to delivering long-lasting benefits to the local communities and to the country."
"We are grateful for the support and commitment that our employees, shareholders and our valued partners in Burkina Faso have provided over the past several months to get us to this important juncture. Karma is now in select company, with only a handful of gold mines coming on stream globally over the next year," added Mr. Milau.
Karma Project Highlights
Karma has $62 million spent and committed to date, including the mine fleet which has been delivered and is in the final stages of commissioning. Earthworks for the plant site, plant site terraces, maintenance shop, welding bay, administration and medical buildings are 100% complete. Mine stores and the laboratory are 90% complete with civil construction 41% completed.
True Gold views Karma, which is fully funded and fully permitted, as a strong foundation upon which to build a leading mid-tier mining company. The mine is a technically simple open-pit heap leach project that offers low capital and operating costs, rapid payback and strong financial performance. Once in production, Karma will be one of the lowest cost gold mines in West Africa with significant exploration growth potential that could add years to the life of mine. Economic highlights:
- Feasibility Study: After-tax IRR of 46.3%, NPV5% of $198.8 million @ $1,250/oz gold
- Phase II - North Kao PEA: After-tax IRR of 213%, NPV5% of $69.6 million @$1,250/oz gold
- Phase III - large resource base and multiple targets for long-term growth
It is estimated that Karma will deliver approximately $160 million in revenue to the Government of Burkina Faso during the life of the mine through a net smelter royalty, corporate taxes and a 10% carried interest. The mine will also provide extensive local investment in infrastructure, education and procurement.