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Semafo gold discovery in Burkina Faso 'looks pretty good'

Gold-miner Semafo Inc. boosted planned exploration spending on a prospect in Burkina Faso from US$3 million to US$11 million after reporting a gold discovery on its Bantou property, part of the broader Kongolokoro concessions.

The discovery, called Bantou Nord, "looks pretty good," Haywood Securities analyst Kerry Smith said in an interview.

Semafo said that in the first quarter, it hit "an interesting area" while drilling a couple of kilometers north of its Bantou gold deposit, which hosts an inferred resource of 361,000 ounces gold grading 5.24 g/t gold.

Semafo added a second drill rig to test the new area and released drill results for the first time June 3.

It reported numerous intercepts over 100 meters long, starting close to surface, that largely grade in the 1 g/t to 2 g/t gold range. Intercepts include 96.3 meters grading 1.32 g/t gold, 111 meters grading 1.06 g/t gold and as much as 135.8 meters grading 2.45 g/t gold. The area of gold mineralization is about 250 by 300 meters so far, Semafo said.

The consistent width and decent gold grades are positive, Smith said. "They must be pretty encouraged given the budget increase is even more than I expected."

Semafo, which produces about 400,000 ounces gold per year, could not be reached for comment.

Paradigm Capital analyst Don Blyth said in an interview that the early results were "very encouraging." He noted that it was hard to estimate tonnage for the early-stage discovery. "But with multiple 100-meter intercepts, this has the legs to grow to a meaningful deposit."

Like Smith, Blyth highlighted the increase in the exploration budget as a sign that the prospect had become a top exploration priority for Semafo. "Bantou exploration could find their next mine."

Semafo said preliminary metallurgical testing gave recoveries over 90% in oxide mineralization and over 85% in sulfide mineralization.

The Bantou property abuts the Karankasso property that Semafo acquired earlier this year in a takeover. Analysts see the cluster of claims, hosting a number of gold deposits, as a potential site for a central processing facility that could handle feed from multiple deposits.