Roxgold
The Yaramoko processing plant.
TSX-listed gold producer Roxgold has celebrated operational success at its Burkina Faso-based Yaramoko 55 Zone project since it delivered first gold in May 2016.

On the back of this success, Roxgold is looking to expand its production from the nearby Bagassi South prospect which could up its annual gold output to 150 000 ozpa by the end of 2018.

Although this increase alone is quite significant, CEO and president John Dorward believes the potential for even greater production from within the Yaramoko concession is highly probable, writes Laura Cornish.

Editor of Mining Review Africa, Laura Cornish.

Impressive start-up

Roxgold, a relatively new gold mining company focused on Burkina Faso in West Africa, has truly excelled – having met all of its production targets and delivered gold to market according to its promised commitments.

The Yaramoko project covers approximately 230 km2 in the Province of Balé in south-western Burkina Faso. The property is located approximately 200 km south-west from the capital city of Ouagadougou.

On the 55th drill hole (to be precise) the company in 2011 discovered the 55 Zone (the principal gold deposit within the Yaramoko concession) and in just five years took the project from initial discovery to production start-up.

Growing and converting the maiden resource, taking it through to preliminary economic assessment to demonstrate its robustness and then ultimately through feasibility, permitting, financing, construction and ultimately production in such a short time-frame is a proud achievement for Dorward and his team.

“There are not many companies in the world that can boast delivering a mine from the first discovery in five years or can prove that every key assumption and metric published in their feasibility study was met or exceeded as we have done,” Dorward states. “This speaks to the fact that our team understands what they’re doing. Our resource and project is also very robust and our mining-friendly jurisdiction further adds to the successes we’ve enjoyed thus far.”

[quote]Dorward also highlights the exceptional relationship Roxgold has established with its EPCM contractor DRA. The company’s COO has worked with DRA on previous projects where it demonstrated its skills set.

“And they brought this experience and a positive attitude to our project. The quality of their work is evident in terms of Yaramoko’s processing performance and infrastructure.”

The process plant for example reached its nameplate capacity only two weeks after start-up and continues to achieve average recoveries of around 99%.

Roxgold
An aerial view of the Yaramoko site.

Star achiever

Yaramoko’s 55 Zone produced approximately 141 000 oz since the first gold pour in May 2016 at just over 15 g/t and has already made significant re-payments on Roxgold’s project finance debt while building cash on the balance sheet.

The process plant has a nameplate capacity of 750 tpd or 270 000 tpa and its grade within the measured and indicated categories averages a very high 17 g/t.

In this same period its cash cost was just over US$400/oz which has made it a very low cost producer – impressive for an underground operation. “In this position we are comfortably able to build our balance sheet to strengthen the company’s position and fund growth and expansion opportunities,” Dorward notes.

The underground mine comprises a competent, “predictable”, single high grade quartz vein.

“The vein is hosted within granite which means the hanging walls and foot walls are sharp and the ground conditions stable. The ore body starts close to surface and then dips steeply below 1 000 m where we have seen gold intersections continue which we are confident will take us beyond our current 11 year lifespan.”

Roxgold
Roxgold president and CEO, John Dorward with COO, Paul Criddle, at Yaramoko’s first gold pour in May 2016.

Mining rates to date have been higher than forecast, largely thanks to new equipment, skilled personnel and good ground conditions. The mine is accessed via a decline which is reinforced with a culvert to protect against water ingress.

For now 55 Zone’s reserves extend to about 700 m but Roxgold does already have a mine plan that incorporates ounces to 1 000 m (although for now these are inferred resources).

“Our project has an excellent conversion track record and once converted should provide 11 operational years. And the ore body remains open at depth where we are currently drilling to confirm this.”

Expansion opportunity on the horizon

Roxgold is well underway with its first growth development project – which it has been working on for the last 12 months already. Located just less than 2 km south of 55 Zone, Bagassi South has the potential to increase the company’s gold output to 150 000 ozpa.

In July this year Roxgold published an updated mineral resource estimate (MRE) for Bagassi South’s primary QV1 vein, stepping up confidence levels from previous drilling programmes.

The MRE is based on 250 core boreholes totaling approximately 55 660 m of drilling and was prepared in accordance with NI 43-101 standards of disclosure.

The 2017 Bagassi South drilling programme returned a significant number of high grade intercepts. Below are the highlights of the estimate:

  • Indicated MRE of 352 000 t at 16.6 g/t for 188 000 oz of gold at a cut-off grade of 5 g/t;
  • Inferred MRE of 130 000 t at 16.6 g/t for approximately 69 000 oz of gold at a cut-off grade of 5 g/t; and
  • Currently conducting further expansion drilling at Bagassi South with plans to commence drilling at the nearby Ridge Line targets shortly.

The updated Bagassi South MRE is a significant improvement over the 2016 inferred resource estimate of 563 000 t at 12.1 g/t for 220 000 oz at a cut-off grade of 5 g/t.

The programme was primarily designed to infill the QV1 structure with sufficient additional intercepts to support the conversion of the existing inferred MRE to indicated status, ahead of its potential inclusion in a feasibility study which is currently scheduled to be completed in the fourth quarter of 2017.

The recent drilling success along the QV Prime structure will also require further drilling and has thus far revealed very high grades Dorward highlights.

Should Bagassi South be fully developed, Roxgold will need to invest in expanding its process plant – by about 40% to up its nameplate capacity to 1 100 tpd.

Because the plant was designed for easy expansion it will be a low cost exercise.

With a $50 million strong balance sheet, Roxgold can comfortably fund the developments required to bring Bagassi South into production and is aiming to achieve this in the second half of 2018 Dorward confirms.

A significant gold camp

With a 230 km² concession area, Dorward is confident that additional gold resources lie undiscovered.

In light of this the company is in the process of completing a large geophysics campaign to provide detailed resolution on the rocks immediately surrounding 55 Zone and Bagassi South.

“We have already seen that the fabric of the granites is disrupted in certain areas. This is a positive sign because the extensional quartz gold veins lie within fractures.”

Two drills are working on the area between the two project sites to generate targets along the greater Bagassi Corridor.

“We are also looking further afield within our concession area at potential sites which we believe would be better suited to larger tonnage, open pit style operations similar to other mines in Burkina Faso.”

The Yaramoko concession lies directly south of, and is contiguous to, the SEMAFO property which hosts its flagship Mana gold mine and Endeavour Mining’s Houndé mine which is currently in construction – both within the Houndé greenstone belt.

“We are sitting on a great piece of real estate and I’m confident Yaramoko will be a significant gold camp in years to come,” Dorward highlights.

Infrastructure contributes to positive success

55 Zone and Bagassi South are easily accessible via road and are about 40 minutes off the main highway that runs between Ouagadougou and Côte d’Ivoire. An upgraded laterite road leads directly to site from the highway.

And while the project does not use a lot of water, its net consumption per annum is very low. “We recycle and harvest water when we can but even so we have a low throughput compared to most large open pit mines.”

Fortuitously, the mine is also in close proximity to a national power grid line.

Roxgold installed a 4.5 km power line connecting the plant to the main grid and has now been running on state-supplied power for about six months which has significantly reduced its costs. “We have so far enjoyed excellent power supply with about 99% availability.” The project consumes around 5 MW of power.

Community conscious

Roxgold has had an active presence on the ground since it arrived – “Community involvement is at the core of what we do,” and various awards for community social responsibility and human rights projects proves this.

“The relationship we enjoy with our local communities is a positive one and we have to date not lost any production days as a result of community challenges.

Our senior management have significant experience working in West Africa. Consequently we have started from a fundamental perspective of respect and understanding.”

The company has centred its community programmes and initiatives on community dialogue and in fact has called for submissions from communities to help generate ideas for new programmes.

Successes to date include solar electrification projects and women’s entrepreneurship programmes which have achieved “great results”.

Local procurement has also been a significant focus area which has seen the company introduce a programme to integrate local cash based businesses and contractors into Roxgold’s billing cycle, enabling local contractors and service providers to compete on a local footing with more established providers.

Roxgold employs a total of 450 people of which 91% are Burkinabe and a little over 50% of those are local Burkanabes from close villages.

These numbers are augmented from time to time by exploration campaigns which push employment numbers upwards of 600.

The introduction of Bagassi South should also see permanent employee numbers increase by between 50 and 100 people.

Reducing risk

Dorward believes the market will still view Roxgold as a single project company should Bagassi South on on-stream.

“The new project will however mitigate the risk of extracting our ore from a single source which will improve our current risk profile.”

Roxgold is interested in evaluating other opportunities but the CEO notes it is a difficult market to obtain capital for early stage exploration project work, “But there are a number of attractive advanced early stage projects that could be natural fits for our group.

Our skill set naturally lends itself to acquiring early-stage projects, grow and advancing the resource, finalising feasibility studies, obtaining the necessary permits and advancing them through to operation.”

Solid West African experience

The Roxgold senior management team have between them extensive experience in West Africa.

Dorward and COO Paul Criddle together were responsible for the development of the Sabodala gold mine in Senegal. Before that Criddle was also the COO for Perseus Mining when the company built its Edikan gold mine in Ghana.

The company’s vice president for exploration and geology Yan Bourassa was involved in a number of discoveries when we worked for Golden Star Resources in Ghana.

General manager Iain Cox previously worked for Newmont Ghana and CFO Natacha Garoute was the financial controller at SEMAFO for a number of years before joining the company.

All images: Roxgold