Mr. John Dorward reports

ROXGOLD COMMENCES CONSTRUCTION AT THE YARAMOKO GOLD PROJECT; COMMISSIONING AND PRODUCTION EXPECTED IN Q2 2016

Roxgold Inc. has commenced construction at its Yaramoko gold project in Burkina Faso, advancing toward production in the second quarter of 2016.

Highlights:

• Construction has commenced on the 190-person camp at Yaramoko;
• Bulk earthworks have commenced which include:
  • Excavation of the boxcut that accesses the underground mine;
  • Clearing and preparation of the processing plant area;
  • Building the project's water storage facility;
  • Building the project's tailings storage facility;
  • Construction of roads within the project area;
• Fixed-price, lump-sum engineering, procurement and construction contractors, DRA/Group Five, are expected to mobilize and commence construction on the processing plant in the second quarter of 2015;
• Underground contractors, AUMS, are expected to mobilize and begin establishment of the portal to access the deposit in the second quarter of 2015;
• Approximately $10.8-million (U.S.) spent to date on long-lead items;
• Commissioning and production at Yaramoko are expected in the second quarter of 2016.

"We are delighted to announce that we have officially broken ground at Yaramoko. In less than three years, Roxgold has advanced the project from a maiden resource through feasibility and permitting and now into construction," said John Dorward, president and chief executive officer. "We remain well funded and expect to be pouring gold at our high-grade, low-cost operation in the second quarter of next year."

Development activities

Roxgold has commenced site works on the project with the mobilization of its camp construction contractors in late March, 2015, following the successful completion of compensation arrangements for affected landholders on the property and a formal development decision from its board of directors. De Simone, a contractor with extensive experience at similar operations in West Africa, including the Perkoa underground mine in Burkina Faso, is building a permanent 190-person camp at the project. Construction of the project's water storage facility, tailings storage facility, roads and terracing for the processing plant has also commenced. DRA/Group Five, the fixed-price, lump-sum engineering, procurement and construction contractor, together with African Underground Mining Services, the underground mining contractor, is scheduled to mobilize to site later this quarter to enable Roxgold to maintain its target schedule.

"The commencement of construction on the project marks the beginning of another exciting phase in our development, and puts us well on track for first gold in the second quarter of 2016," said Paul Criddle, Roxgold's chief operating officer.

Preproduction costs

The expected preproduction capital costs for the project stand at $110.8-million (U.S.), an increase of approximately 4 per cent from the amount in the feasibility study published in April, 2014, resulting primarily from scope changes. The changes include the adoption of a plastic liner for the project's tailings storage facility, which was a new requirement outlined by Burkina Faso's environmental permitting authority. In addition, the SAG mill and associated equipment were upsized to facilitate a future expansion of the processing plant's capacity and the backup (diesel) power station capacity was also increased, which will provide Yaramoko with full standby capability in support of the grid connected power line. To date, $10.8-million (U.S.) has been spent on long-lead project items such as the SAG mill, detailed engineering design, the Armtec tunnel for the underground mine access, as well as tower steel and a transformer for the 90-kilovolt power line. The current expected project expenditures remaining stand at $100-million (U.S.) with over 50 per cent of total project expenditures either already spent or fixed price in nature.

          PREPRODUCTION CAPITAL COSTS           
         (in millions of U.S. dollars)

Processing plant (fixed price)           $ 34.9 
Underground development                    24.5 
Infrastructure (including power supply)    17.9 
Preproduction working capital              10.2 
Bulk earthworks                             8.1  
Detailed design and project management      4.5  
Other                                       5.3  
                                         -------    
Subtotal                                  105.4 
Contingency                                 5.4  
                                         -------    
Total capex                               110.8 
Spent to date                              10.8 
                                         -------    
Remaining expenditure                    $100.0 

Financing update

Roxgold remains well financed with approximately $30-million (U.S.) in cash on hand. The company's previously announced $75-million (U.S.) senior debt facility, with mandated banks Societe Generale and BNP Paribas, is expected to be available for drawdown later this quarter, pending the completion of customary conditions precedent, which is expected this quarter. In addition, the company has an agreement with AUMS which will allow for up to $15-million (U.S.) to be raised in the form of direct investment by AUMS and shares for services. The company is required to finance a $15-million (U.S.) cost overrun account associated with the senior debt facility at financial close. Together with the remaining contingency, the cost overrun account provides a significant buffer for unanticipated delays and costs given the proportion of outstanding capital costs subject to fixed prices and the amount spent to date.

Qualified person

Craig Richards, PEng, principal mining engineer for Roxgold, a qualified person within the meaning of National Instrument 43-101, has verified and approved the technical data disclosed in this press release.

We seek Safe Harbor.