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Semafo estimates 1.5 million gold ounces from Mana, provides FY'18 outlook


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Semafo estimates 1.5 million gold ounces from Mana, provides FY'18 outlook

Semafo Inc.'s prefeasibility study at its Mana project in Burkina Faso estimated total recoveries of about 1.5 million ounces of gold at all-in sustaining costs of US$809 per ounce for the life of mine.

The study, which includes a revised mine plan for all of the Mana project, including the Wona-Kona open pit, Siou open pit and Siou underground operations, was based on a 2,000-tonne-per-day operation using contractor mining, with a base case gold price of US$1,200 per ounce.

Initial expenditure for the project is expected at US$51.7 million, and sustaining capital is expected to be US$62.9 million. The underground mining costs are estimated at US$70 per tonne milled.

Revenues from sales of gold from the mine are estimated at US$1.77 billion.

The 18-month development period is expected to begin in the third quarter of 2018, according to the Feb. 15 release.

Meanwhile, the 2017 infill drill program at the Boungou project added 203,000 ounces of reserves and 201,000 ounces of measured and indicated resources.

The additional reserves will support an average production profile of more than 200,000 ounces per year between 2019 and 2023 at an average all-in sustaining cost of US$516 per ounce.

As at Dec. 31, 2017, mineral reserves at Boungou stood at 11.2 million tonnes at 4.11 g/t of gold for 1.5 million ounces of gold.

In a separate Feb. 15 release, Semafo forecast gold production in 2018 from the Mana and Boungou projects at between 235,000 ounces to 265,000 ounces at all-in sustaining costs of US$900 to US$940 per ounce, assuming a gold price of US$1,250 per ounce.

Capital expenditure is estimated at US$68 million for the year, including US$54 million for Mana and US$14 million for Boungou.

The general and administrative expense for 2018 are estimated to be US$16 million.

Initial exploration expenditure for 2018 has been set at US$26 million, with US$9 million for Boungou, US$7 million for Mana, US$4 million for Nabanga, US$3 million for Korhogo and US$3 million for the Bantou area.

In the five-year period from 2019 to 2023, average production from Mana and Boungou is expected at 413,000 per ounce at average all-in sustaining costs of US$696 per ounce.

Operating cashflow, assuming a US$1,300 gold price, is expected at US$1.26 billion for the five years, on revenues of US$2.68 billion.