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Roxgold Inc (2)
Symbol ROG
Shares Issued 324,081,829
Close 2016-02-05 C$ 0.77
Market Cap C$ 249,543,008
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Roxgold finishes 75% of Yaramoko construction

2016-02-08 07:15 ET - News Release

Mr. John Dorward reports

ROXGOLD PROVIDES DEVELOPMENT UPDATE FOR THE YARAMOKO GOLD PROJECT

Roxgold Inc. is providing a development update for the Yaramoko gold project.

Development highlights:

  • Approximately $64-million (U.S.) of the $110.8-million (U.S.) capital estimate spent to date and the project remains on budget;
  • Project commissioning remains on target for second quarter 2016;
  • Overall construction program approximately 75 per cent complete and on schedule;
  • Bulk earthworks complete;
  • Tailings storage facility (TSF) complete;
  • 1,237 metres of decline and lateral underground development completed against a plan of 972 metres;
  • Processing facility approximately 80 per cent complete and on schedule.

Since the last update (see Roxgold press release dated Dec. 10, 2015), development of the Yaramoko gold project has advanced considerably with significant infrastructure packages now complete. Underground mine development rates are ahead of plan, and the project continues to track on time and on budget, with the first gold pour remaining on schedule for next quarter.

Work progressed across the property with all contractors mobilized and established. In January, the project personnel levels peaked at 750 people on-site. At the end of January, the company had spent approximately $64-million (U.S.) and remains on target to complete the project within the budget of $110.8-million (U.S.).

Roxgold president and chief executive officer John Dorward stated: "We are very pleased with the progress on the project in recent months. With a number of important infrastructure works now complete, the team is focusing on underground development and the start of commissioning activities."

Bulk earthworks

Bulk earthworks are complete, and the TSF and the water storage facility are being handed over to the operations group.

Mine development

During the month of December, 2015, the underground mine access infrastructure was completed with the Armtec tunnel installed and the boxcut backfilled.

Underground development has advanced well, with the underground contractor, African Underground Mining Services (AUMS), delivering several months of above-plan development rates. Total development meterage stood at 1,237 metres as at the end of January against a planned level of 972 metres.

As at the end of January, 2016, the ramp had advanced 610 metres from the portal and level development was advancing on four levels, namely the 5270, 5253, 5236 and 5219 levels.

Since the last update, the deposit has been crosscut at the above-mentioned four levels, exposing the 55 zone vein. The company is encouraged by what has been observed here with the orebody and thickness consistent with that of the block model. Initial chip sampling of the crosscuts indicates that ore grades are also consistent with expectations.

The vent raise contractor, Bauer Drilling, is on-site and has completed the pilings for the first vent raise. Initial site works for the raise boring contractor, Murray & Roberts, are well advanced. All equipment associated with the final installation of the ventilation fans is on-site.

Construction of the surface mine infrastructure, including workshops, offices and backup power station, remains on schedule. The surface settling ponds are complete and the recycling of underground water has commenced.

AUMS is fully mobilized with a full complement of personnel and equipment for preproduction and operational phases on-site.

Processing plant

Construction of the processing plant by the lump-sum engineering, procurement and construction (EPC) contractor, the DRA/Group Five joint venture, is approximately 80 per cent complete.

All procurement associated with the EPC contract is completed with approximately 90 per cent of the mechanical equipment on-site and awaiting installation. The balances of the remaining packages are either in Burkina Faso or en route from ports in Ghana or Ivory Coast.

Plant civil and concrete works are complete, and the majority of structural steel has been erected.

Since the last update, key mechanical packages such as the thickener, kiln, screens, cyclone pack, agitators, carbon transfer pumps, reagent mixing and crusher plant have been received on-site and installed.

The carbon-in-leach tanks had been erected to their full height by the end of January with top of tank steel also in place.

The workshop, warehouse and reagent storage sheds are complete. The site office, mess and security buildings are scheduled to be completed and occupied in March, 2016.

Handover and commissioning processes have commenced across the site, and physical commissioning of key packages will commence in February, 2016.

The Yaramoko gold project remains on schedule to pour first gold in second quarter 2016.

Operational readiness

Roxgold's management team continued to advance preparations for the operational phase. The recruitment of all department heads, senior technical and senior operational personnel is complete, and significant progress has been made in recruiting the local work force.

IT and communication systems installation has continued across site. Configuration of the business systems software (accounting and inventory modules) is continuing and is expected to be finalized during first quarter 2016.

The environmental and social management system (ESMS) has been developed and is being installed in advance of the project becoming fully operational.

Financing update

The company's cash position, including the restricted $15-million (U.S.) cost overrun account, is approximately $36-million (U.S.).

Available project financing remaining from the $75-million (U.S.) six-year senior secured project finance facility is $24-million (U.S.), while a further $10-million (U.S.) is available from AUMS in exchange for underground development work (see Roxgold press release dated Sept. 29, 2014).

As at the end of January, 2016, approximately $64-million (U.S.) of the $110.8-million (U.S.) preproduction capital estimate had been spent.

Remaining estimated preproduction capital required for the development of the Yaramoko gold project is approximately $46.8-million (U.S.).

Qualified persons

Paul Criddle, FAUSIMM, chief operating officer for Roxgold, and Craig Richards, PEng, principal mining engineer for Roxgold, are qualified persons within the meaning of National Instrument 43-101, and have verified and approved the technical data disclosed in this press release.

We seek Safe Harbor.

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