Randgold Resources
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Roxgold
West Africa Projects  
12 November 2017

Roxgold to increase Yaramoko gold production by 40% to over 150 000 ozpa

A feasibility study for Roxgold’s Bagassi South project could expand its annual gold production by 40% to over 150 000 ozpa.

Burkina Faso - This is following conclusion of a feasibility study which delivered positive results. Bagassi South is located on RoxGold’s Yaramoko concession.

The feasibility study envisions a satellite underground operation at Bagassi South and an expanded processing facility at Yaramoko.

“Like the neighbouring 55 Zone, the economics of this additional high grade feed source are highly accretive and generate increased cash flow from a modest capital outlay. Consistent with our commitment to offer accretive growth while managing dilution, this expansion will be funded from our own balance sheet without the need for additional equity from our shareholders.  In addition, work is already underway to extend the mine life at Bagassi South through the current infill and extensional drilling programme on the QV Prime structure,” states John Dorward, President and CEO.

Under the Mining Code of Burkina Faso, the Government of Burkina Faso is entitled to a 10% interest in the Bagassi South project upon its formal inclusion in the company’s existing Yaramoko exploitation permit.

Project capital cost and production metrics

Pre-production capital costs are estimated to total US$29.6 million including $2.8 million in contingency. This figure includes $7.9 million for underground pre-production development.

The processing plant expansion capital amounts to $7.1 million. There is considerable existing infrastructure and services as part of the 55 Zone underground mine which can also support the Bagassi South project.

Additional surface infrastructure is estimated to total $6.0 million and includes ventilation shaft, water storage, haulage roads, camp expansion, tailings storage facility embankment raise, power and water reticulation.

Annual production profile

As the first expansion project outlined at Yaramoko since the 2014 feasibility study, Roxgold considers the Bagassi South feasibility illustrative of the potential to develop additional high grade structures on the property.

The Mineral Reserves calculated by SRK Consulting for the Bagassi South deposit are 458 000 t at a grade of 11.54 g Au/t containing 170 000 oz gold.  Gold production from the Bagassi South ore reserves will contribute to a stronger production profile for the Yaramoko gold project.

Yaramoko also has significant inferred mineral resources adjacent to these ore reserves, which may contribute to a longer mine life for the property.    Inferred resources have been delineated both at depth for 55 Zone and along strike at Bagassi South’s key structures in QV1 and QV’, which are approximately 70 m apart.

The company anticipates establishing underground drilling platforms in the coming years to specifically target the infilling of these inferred resource blocks.

The feasibility study, led by SRK in partnership with Knight Piesold, DRA, African Underground Mining Services, and Roxgold, focuses on the incorporation of the high grade Bagassi South deposit into Roxgold’s 90% owned Yaramoko permit located approximately 1.8km km North of Bagassi South.

The project focuses on bringing additional gold production from Bagassi South into an expanded processing facility at Yaramoko. The expansion will capitalise on the existing infrastructure at the mine and will increase revenue without a commensurate increase in overheads.

The plant expansion will increase capacity from 270 000 tpa to 400 000 tpa . The original design of the existing Yaramoko plant considered a future expansion and the necessary allowances were made in the layout and mechanical equipment selection to facilitate a modular type expansion.

Project permitting and schedule

Roxgold has substantially advanced the permitting aspects of the project. With the key milestone of submission to the local regulator (BUNEE) of the project’s ESIA (Environmental Social Impact Assessment) being completed in October 2017.

Roxgold expects to advance this permit with the regulators in Burkina Faso in Q4 and furthermore the Mining Permit in Q1, 2018. Given this milestone, it is expected that preliminary surface works would also commence early in 2018. Construction would be on-going throughout the year, with first ore expected late in Q4, 2018.

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