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Roxgold Inc (2)
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Roxgold increases NI 43-101 reserves at Yaramoko

2020-11-10 07:38 ET - News Release

Mr. John Dorward reports

ROXGOLD REPORTS UPDATED MINERAL RESERVE AND RESOURCE ESTIMATE AT YARAMOKO MINE COMPLEX

Roxgold Inc. has released an updated mineral resource and mineral reserve estimate for the Yaramoko mine complex located in Burkina Faso. Total proven and probable mineral reserves increased by 8 per cent to 710,000 ounces of gold replacing depletion of 207,396 ounces during the period from Dec. 31, 2018, to June 30, 2020. Measured and indicated mineral resources increased 4 per cent to 857,000 ounces of gold -- increasing the total gold in measured and indicated mineral resources plus the cumulative production to date to approximately 1.4 million ounces over the life of the project. The increased mineral reserves reinforce the project as a stable foundation of long-term production and free cash flow generation for Roxgold's ambitious growth plans.

Highlights:

  • Total proven and probable mineral reserves at Yaramoko increased 8 per cent to 710,000 ounces of gold, net of mining depletion of 207,396 ounces Au, from the period of Dec. 31, 2018, to June 30, 2020.
  • Measured and indicated mineral resources at Yaramoko increased 4 per cent to 857,000 oz Au, increasing the mineral endowment of measured and indicated mineral resources plus cumulative production to date at Yaramoko to 1.4 million ounces.
  • The addition of near-surface mineral reserves and mineral resources highlights the plan for an open-pit operation to complement the underground mine and extend the mine life at the 55 zone.
  • The 14,500 m underground drill program has commenced in the 55 zone at the 4754 level targeting the replacement and upgrading of inferred mineral resources down to the 4170 level, approximately 1,200 m below surface.
  • A regional exploration program has commenced targeting additional near-surface mineralization opportunities across the Yaramoko permit targeting multiple early-stage opportunities, which have been identified including the significant mineralized footprint around the operating Bagassi South underground mine.

"Since starting production in 2016, the Yaramoko mine complex has poured over 575,000 ounces of gold and continues to demonstrate its ability to replace production and maintain a long mine life," stated John Dorward, president and chief executive officer. "Earlier this year we initiated a review of near-surface mineralization opportunities across the Yaramoko property to complement our high-grade underground operations. This review identified the near-surface portions of 55 zone that extended outside of the prior underground mineral resource. With today's announcement, we are planning for an open-pit operation with a reserve grade of over seven g/t to complement the high-grade underground operation and extend the mine life at the 55 zone.

"This is just the first phase in our near-term plans to continue to explore additional mine life opportunities at Yaramoko. This month we initiated a 14,500 m underground drill program at the 55 zone which is designed with the intention of upgrading and extending mineral resources at depth to approximately 1,200 m below surface. The results of this program will be incorporated into the annual mineral resource and reserves update to be released mid-next year. Extending the mine life at Yaramoko has long been a priority for us and between the success of near-surface drilling program, together with our recently commenced underground drilling program and the prioritization of regional exploration targets, I am confident that we will build a compelling body of evidence over the coming quarters to showcase the long-life nature of Yaramoko."

Proven and probable mineral reserves at Yaramoko increased 8 per cent to 710,000 oz Au, net of mining depletion of 207,396 oz Au at an average processed head grade of 9.2 g/t, from the period of Dec. 31, 2018, to June 30, 2020. Measured and indicated mineral resources increased 4 per cent to 857,000 oz Au from 827,000 oz Au relative to the Dec. 31, 2018, estimate (refer to company press release dated July 11, 2019, for further details with respect to the Dec. 31, 2018, estimates).

The increase in mineral reserves and measured and indicated mineral resources is primarily attributed to the success of a prior drilling program that delineated mineralization in the near-surface portion of the 55 zone, intersecting several high-grade intervals close to surface and above zones previously mined from underground in the early stages of the 55 zone mining operation. The objective of this drill program was to determine the potential for an open-pit operation to complement the high-grade underground operation and extend the mine life at the 55 zone (refer to company press release dated Sept. 30, 2020).

Inferred mineral resources decreased 37 per cent from 191,000 oz Au to 121,000 oz Au as per the Dec. 31, 2018, estimate. The decrease in the inferred mineral resources is primarily due to the conversion of prior inferred mineral resources to indicated mineral resources with the extension of inferred mineral resources to be a priority for upcoming underground drilling campaigns.

The mineral resources and mineral reserves models were prepared in conformity with the Canadian Institute of Mining, Metallurgy and Petroleum's (CIM) Estimation of Mineral Resources and Mineral Reserves Best Practices Guidelines (November, 2019) and are classified per the CIM Definition Standards for Mineral Resources and Mineral Reserves (May, 2014).

                              YARAMOKO JUNE, 2020, MINERAL RESERVE ESTIMATE
                     
                                    Proven                      Probable           Proven and probable 
                Tonnes     Grade     Metal   Tonnes      Grade     Metal   Tonnes     Grade      Metal
                  (kt)  (g/t Au)  (000 oz)     (kt)   (g/t Au)  (000 oz)     (kt)  (g/t Au)   (000 oz)

Stockpiles         131       3.4        14        -          -         -      131       3.4         14
55 zone
Open pit             -         -         -      820        7.2       190      820       7.2        190
Underground        262       6.0        51    1,354        7.2       314    1,616       7.0        365
Bagassi South
Underground          -         -         -      576        7.6       141      576       7.6        141
Total              393       5.1        65    2,750        7.3       645    3,143       7.0        710

Notes
(1) Mineral reserves are reported in accordance with National Instrument 43-101 with an effective 
date of June 30, 2020, for the Yaramoko gold mine.
(2) The Yaramoko mineral reserves are reported on a 100-per-cent basis at a gold grade cut-off of 
0.9 g/t Au for the 55 zone open pit, 3.1 g/t Au for 55 zone underground and 2.8 g/t Au for Bagassi 
South underground, based on a gold price of $1,500 (U.S.)/ounce. Reported mineral reserves account 
for mine depletion and stockpile activities as at June 30, 2020.
(3) The Yaramoko underground mineral reserve statement was prepared under the supervision of 
Ashraf Suryaningrat, senior mine engineer at Roxgold. Mr. Suryaningrat is a qualified person as 
defined in NI 43-101.
(4) The Yaramoko open-pit mineral reserve statement was prepared under the supervision of David 
Whittle, general manager, Yaramoko, at Roxgold. Mr. Whittle is a qualified person as defined in 
NI 43-101. 
(5) All figures have been rounded to reflect the relative accuracy of the estimates and totals 
may not add due to rounding.  
(6) The Yaramoko gold project is subject to a 10-per-cent carried interest held by the government 
of Burkina Faso.

                               YARAMOKO JUNE, 2020, MINERAL RESOURCE ESTIMATE

                                Measured                Indicated   Measured and indicated                 Inferred
                Tonnes    Grade    Metal Tonnes    Grade    Metal Tonnes    Grade    Metal Tonnes    Grade    Metal
                  (kt) (g/t Au) (000 oz)   (kt) (g/t Au) (000 oz)   (kt) (g/t Au) (000 oz)   (kt) (g/t Au) (000 oz)

Stockpiles         131      3.4       14      -        -        -    131      3.4       14      -        -        -
55 zone
Open pit             -        -        -    972      7.7      240    972      7.7      240    202      4.4       29
Underground        220      9.5       67    894     12.4      356  1,115     11.8      423    178      8.1       46
Bagassi South
Underground          -        -        -    436     12.9      180    436     12.8      180    176      8.1       46
Total              351      7.2       81  2,303     10.5      776  2,654     10.0      857    556      6.8      121

Notes
(1) Mineral resources are reported in accordance with NI 43-101 with an effective date of June 30, 2020, for the 
Yaramoko gold mine.
(2) The Yaramoko mineral resources are reported on a 100-per-cent basis at a gold grade cut-off of 0.5 g/t Au for 
the 55 zone open pit and 2.7 g/t Au for underground, based on a gold price of $1,700 (U.S.)/ounce; with the 55 
zone open pit constrained to an MII pit optimization shell. Reported mineral resources account for mine depletion 
and stockpile activities as at June 30, 2020.
(3) The identified mineral resources are classified according to the CIM definitions for the measured, indicated 
and inferred categories. The mineral resources are reported in situ without modifying factors applied. 
(4) The Yaramoko mineral resource statement was prepared under the supervision of Hans Andersen, senior resource 
geologist at Roxgold. Mr. Andersen is a qualified person as defined in NI 43-101.
(5) All figures have been rounded to reflect the relative accuracy of the estimates and totals may not add due 
to rounding.
(6) Mineral resources that are not mineral reserves do not necessarily demonstrate economic viability.
(7) Mineral resources are reported inclusive of mineral reserves.
(8) The Yaramoko gold project is subject to a 10-per-cent carried interest held by the government of Burkina Faso.

                     YARAMOKO MINERAL RESOURCE AND RESERVE COMPARISON (1) (2)

                            Prior as at Dec. 31, 2018 (3)            Updated as at June 30, 2020                
                         Tonnes        Grade        Metal       Tonnes        Grade        Metal
                           (kt)     (g/t Au)     (000 oz)         (kt)     (g/t Au)     (000 oz)
Mineral reserve
Proven                      558          8.2          147          393          5.1           65
Probable                  1,926          8.3          511        2,750          7.3          645
Proven and
probable                  2,484          8.2          658        3,143          7.0          710
Mineral resource
Measured                    542         11.9          208          351          7.2           81
Indicated                 1,580         12.2          619        2,303         10.5          776
Measured and
indicated                 2,122         12.1          827        2,654         10.0          857
Inferred                    477         12.4          191          558          6.7          121

Notes
(1) Mineral reserves and resources are reported in accordance with NI 43-101.
(2) All figures have been rounded to reflect the relative accuracy of the estimates and 
totals may not add due to rounding.

The major addition to the Yaramoko mineral reserve and mineral resource estimate is delineation of mineral reserves and mineral resources near to surface and proximal to zones mined from underground in the early years of Yaramoko operations. Based on the 3,700 m reverse circulation and diamond drilling program completed in February, 2020, and subsequent completion of an internal mine plan analysis, these near-surface mineral reserves and mineral resources support the commencement of an open pit at the eventual completion of the 55 zone underground mine. The potential 55 zone open pit would be focused on extracting the high-grade near-surface material that forms the crown pillar, remnant halo mineralization around the existing mine workings, and subparallel structures to the main 55 zone structure that did not form part of the Z55 underground mining plans.

Underground drill campaign

Underground drilling from the 4754 level started in late September, ramping up to three diamond drill rigs by late October. This 14,500 m program is designed to upgrade much of the inferred mineral resource mineralization at depth to an indicated mineral resource confidence level, while also testing the opportunities for additional mineralization along strike. Detailed structural mapping and geostatistical work carried out on the 55 zone over the last 12 months has further refined and enhanced the understanding of key mineralized structures within the high-grade 55 zone at depth, and is expected to result in a high degree of conversion and potential extension of intervals such as the 20.1 g/t gold over 23.8 m intersected in YRM-16-DD-426 (refer to company press release dated Nov. 29, 2016).

This drilling program is scheduled to be completed in early Q1 2021, with the results being incorporated into an updated mineral resource and reserve statement for the Yaramoko gold mine, planned for Q3 2021.

The planned underground drilling in 2022 from the 4300 level will be focused on extending the current orebody beyond its existing mineral resource envelope, testing for additional depth extensions to approximately the 3800 level, as well as testing the potential for additional mineralization along strike and from offset splay structures.

Yaramoko exploration outlook

Over the course of this year, a review of near-surface mineralization opportunities across the Yaramoko property has been completed, incorporating a site-wide structural and geochemical review as well as integrating details and key observations from detailed mapping of the 55 zone and Bagassi South underground workings. The program identified several early-stage opportunities for additional exploration drilling in addition to the work carried out on the 55 zone open pit.

High-priority targets include several along the interpreted western corridor of the 55 zone and at the Bagassi South (that is, QV2 and QV3), 109 and 300 prospects. Delineation of near-surface oxide targets will be the initial focus of exploration activities at the Bagassi South, 109 and 300 prospects. Additionally, exploration will be continuing to systematically test the remaining 23 high-priority targets, as well as further exploration work to identify and delineate additional targets within the permit boundaries.

Mineral reserve estimation assumptions

Technical work for the construction of the 55 zone and Bagassi South underground mineral reserves, including cut-off grade calculations, cost modelling, economic analysis, mine design and scheduling, was conducted and/or supervised by Ashraf Suryaningrat, senior mining engineer for Roxgold, and reviewed by Paul Criddle, chief operating officer for Roxgold.

Technical work for the construction of the 55 zone open-pit mineral reserves, including pit optimization, cost modelling, economic analysis, mine design, and scheduling, was conducted by Entech Mining Consultants, supervised by Mr. Suryaningrat and reviewed by Mr. Criddle.

55 zone and Bagassi South underground mineral reserves estimation

55 zone and Bagassi South underground mines stope optimization and design work was carried out by Mr. Suryaningrat of Roxgold and generated in Deswik software.

Parameters used to complete optimization, design and scheduling of the mineral reserves include:

  • Gold price of $1,500 (U.S.)/oz;
  • Processing recovery of 98.0 per cent;
  • Payable gold of 99.2 per cent;
  • Selling cost of $5.50 (U.S.)/oz;
  • Royalties (inclusive of mining and community development levy) of 6.0 per cent;
  • 55 zone mining cost of $95.70 (U.S.)/t, processing cost of $25 (U.S.)/t and G&A (general and administrative) cost of $16.9 (U.S.)/t;
  • Bagassi South mining cost of $95.10 (U.S.)/t, processing cost of $17.90 (U.S.)/t and G&A cost of $12.10 (U.S.)/t;
  • Cut-off grades of 3.1 g/t Au and 2.8 g/t Au for 55 zone and Bagassi South, respectively;
  • Stope minimum mining width of 1.5 m with final diluted stope shape widths of 2.2 m and 2.4 m for 55 zone and Bagassi South, respectively;
  • Mining recovery of 95.0 per cent for stopes and 100.0 per cent for sill drifts.

The mining method for the 55 zone and Bagassi South underground mines remains unchanged, utilizing long-hole retreat open stoping with articulated trucks for haulage to either the ore or waste pad locations. Mining services for the underground workings are completed by an underground mining contractor under the supervision of Roxgold.

55 zone open-pit mineral reserves estimation

55 zone open-pit optimization and mine design work have been carried out by Entech Mining Consultants generated in Datamine software. Parameters used to complete the 55 zone open-pit mineral reserve estimate include the following:

  • 0.9 g/t Au cut-off grade;
  • Gold price of $1,500 (U.S.)/oz;
  • Mining recovery of 85.0 per cent;
  • Processing recovery of 98.0 per cent;
  • Mining dilution of 10 per cent;
  • Overall slope angle ranging from 43 degrees to 53 degrees north to south;
  • Mining costs of $3.26 (U.S.) per tonne;
  • Total processing costs of $22.85 (U.S.) per tonne;
  • Total G&A cost of $14.50 (U.S.) per tonne;
  • Selling cost of $5.50 (U.S.)/oz;
  • Royalties (mining and community development levy) of 6.0 per cent.

Entech Mining Consultants completed a multistaged pit design analysis. The mining method for the 55 zone open pit is planned to be a conventional truck and shovel method, common for open-pit mines. Mining services of the open pit is planned to be completed by a mining contractor under the supervision of Roxgold. The costs used in the study were derived from a competitive tender with contractors active in Burkina Faso.

Mineral resource modeling and estimation assumptions

The mineral resources reported herein have been estimated using a geostatistical block modelling approach informed from gold assay data collected from drill hole and production samples. Technical work for the construction of the Yaramoko mineral resource, including wireframing, statistical and geostatistical analysis, and mineral resource estimation, was conducted and/or supervised by Hans Andersen of Roxgold and reviewed by Paul Weedon, vice-president of exploration for Roxgold.

The mineral resource estimate incorporates all data from both production and drilling (RC and DD) activities to date, comprising 1,419 drill holes and 6,012 production holes targeting the 55 zone and Bagassi South deposits.

The 55 zone underground and Bagassi South mineral resource models were modelled and estimated using Leapfrog Geo and Edge software. The 55 zone open-pit mineral resource model was developed and estimated using Datamine software. All gold assays from development channels and drill holes were composited to 1.0-metre intervals within the mineralized wireframes. Grade capping utilized the high-yield approach for the 55 zone underground and Bagassi South estimates. The high-yield thresholds were restricted to nominal 15 m distances, based on production knowledge, while the 55 zone open-pit mineral resource estimate used a traditional top-cut approach. Top cuts were applied to individual domains based on the analysis of gold grade outliers within the statistical data populations and ranged between 0.8 g/t for the low-grade (that is, shear envelope) domains to 500 g/t Au for the high-grade domains in active and mined production areas.

The mineral resource model gold grades were estimated using a combination of ordinary kriging and inverse distance methods using a multiple pass approach to inform the resource model. The grade estimates are validated visually by sectional comparison and through statistical approaches that encompass traditional validation methods, such as swath plots comparing composite and block model values for each deposit. Geostatistical exploratory data analysis (EDA), variogram modelling and mineral resource model validation were conducted using Leapfrog Geo and Snowden Supervisor software.

Density values were assigned to the mineral resource models based on ascribed oxidization state and lithological unit, with mineralization being assigned the density of its predominant host. A density of 1.8 tonnes per cubic metre was assigned to transported and alluvial sediments, with a range of 1.8 to 2.2 tonnes per cubic metre assigned to the oxidized weathered profile and a range of 2.60 to 2.92 tonnes per cubic metre assigned to fresh rock lithologies.

Mineral resource models and drill hole data at the Yaramoko gold mine utilize the Adindan UTM grid (zone 30) co-ordinate system with elevation heights converted to a local mine grid by the addition of over 5,000 to the natural surface elevation.

The mineral resource models are classified into measured, indicated and inferred categories based on analysis of the following criteria: number of samples informing the estimate, sample spacing, average sample distance, kriging efficiency and slope of regression outputs, drill hole and sample quality assurance/quality control thresholds and geological confidence in modelled interpretations, grade continuity, and level of geological understanding at each deposit.

The mineral resource models are depleted for all surveyed mining voids (including artisanal workings) as of June 30, 2020. The reported mineral resource includes all closing stockpile balances as of June 30, 2020.

The Yaramoko open-pit mineral resource is reported constrained by a pit optimization generated in Datamine software to satisfy the definition of mineral resources having reasonable prospects for eventual economic extraction, and is based on the following parameters:

  • Gold price of $1,700 (U.S.)/oz;
  • Mining recovery of 85.0 per cent;
  • Processing recovery of 98.0 per cent;
  • Mining dilution of 10 per cent;
  • Overall slope angle ranging from 43 degrees to 53 degrees north to south;
  • Mining costs of $3.26 (U.S.) per tonne;
  • Total processing costs of $22.85 (U.S.) per tonne;
  • Total G&A cost of $14.50 (U.S.) per tonne;
  • Selling cost of $5.50 (U.S.)/oz;
  • Royalties (inclusive of mining and community development levy) of 6.0 per cent.

                                      UPCOMING CATALYSTS
Event                                                                               Timing 

Continuing infill, expansion and satellite target drilling program at Seguela      Q4 2020
Drilling results from Boussoura                                                    Q4 2020
Underground drilling program in 55 zone at Yaramoko mine complex                   H1 2021
Feasibility study for Seguela                                                      H1 2021
Seguela construction decision                                                      H1 2021
Annual mineral resource and reserve update at Yaramoko mine 
complex (incorporating current underground drill campaign)                         H2 2021

Qualified persons

Mr. Criddle, a qualified person within the meaning of NI 43-101, has reviewed, verified and approved the scientific and technical disclosure contained in this news release.

Mr. Weedon, a qualified person within the meaning of National Instrument 43-101, has reviewed, verified and approved the scientific and technical disclosure contained in this news release. This includes the QA/QC, sampling, analytical and test data underlying this information. No limits were imposed on Mr. Weedon's verification process.

The scientific and technical information contained in this document relating to the Yaramoko mineral resource is based on, and fairly represents, information compiled by Mr. Andersen. Mr. Andersen is a member of the Australian Institute of Geoscientists. Mr. Andersen is a full-time employee of Roxgold and is not independent within the meaning of NI 43-101 Standards of Disclosure for Mineral Projects. Mr. Andersen has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration and to the activity that he is undertaking to qualify as a qualified person under NI 43-101. Mr. Andersen has consented to and approved the inclusion in this document of the matters based on his compiled information in the form and context in which it appears in this document.

Roxgold's disclosure of mineral reserve and mineral resource information is governed by NI 43-101 and under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum Standards on Mineral Resources and Mineral Reserves, adopted by the CIM council, as may be amended from time to time by the CIM. There can be no assurance that those portions of mineral resources that are not mineral reserves will ultimately be converted into mineral reserves.

For more information on the projects you can also refer to the company's technical reports entitled "Technical Report for the Yaramoko Gold Mine, Burkina Faso," dated Dec. 20, 2017, and "NI 43-101 Technical Report, Seguela Project, Preliminary Economic Assessment, Worodougou Region, Cote d'Ivoire," dated April 14, 2020, each available on the company's website and SEDAR.

Quality assurance/quality control

All drilling data completed by Roxgold utilized the following procedures and methodologies. All drilling was carried out under the supervision of Roxgold personnel.

Reverse circulation drilling used a 5.25-inch face sampling pneumatic hammer with samples collected into 60-litre plastic bags. Samples were kept dry by maintaining enough air pressure to exclude groundwater inflow. If water ingress exceeded the air pressure, RC drilling was stopped and drilling converted to diamond core tails. Once collected, RC samples were riffle split through a three-tier splitter to yield a 12.5-per-cent representative sample for submission to the analytical laboratory. The residual 87.5 per cent of samples were stored at the drill site until assay results were received and validated. Coarse reject samples for all mineralized samples corresponding to significant intervals are retained and stored on site at the company-controlled core yard.

Diamond drill holes were drilled with HQ- or NQ2-sized diamond drill bits. The core was logged, marked up for sampling using standard lengths of one metre. Samples were then cut into equal halves using a diamond saw. One-half of the core was left in the original core box and stored in a secure location at the company core yard at Yaramoko. The other half was sampled, catalogued and placed into sealed bags and securely stored at the site until shipment.

All RC and diamond samples were shipped to the ALS laboratory in Ouagadougou for preparation. ALS is independent of Roxgold. Samples were dried and crushed by the laboratory and a 250-gram split prepared from the coarse crushed material, prior to pulverization and preparation of a 200 g sample with routine gold analysis using a 50-gram charge and fire assay with an atomic absorption finish. Quality control procedures included the systematic insertion of blanks, duplicates and sample standards into the sample stream. In addition, the laboratory inserted its own quality control samples.

Channel sampling of core drives is performed by Roxgold personnel on each core development face, with face advance usually three m. Faces are sampled after inspection by geological staff, delineating the structure based on veins, lithology and alteration. A channel 40 centimetres wide (20 cm above and 20 cm below the sample line) is marked out, centred on a sample line 1.5 m from the drive floor, and represents the channel that samples are collected from. Sampling is carried out from the hangingwall to the footwall. Samples are bagged in uniquely numbered cotton bags and sent for analysis at the on-site SGS laboratory. Sample widths vary according to geological structure with the minimum width of 0.3 m to a maximum width of 1.0 m. Each sample weighs approximately 2.0 kilograms. QA/QC samples are inserted within every 11th sample, particularly if visible gold is observed.

For more information on the company's QA/QC and sampling procedures, please refer to the company's annual information form for the year ended Dec. 31, 2019, available on the company's website and on SEDAR.

About Roxgold Inc.

Roxgold is a Canada-based gold mining company with assets located in West Africa. The company owns and operates the high-grade Yaramoko gold mine located on the Hounde greenstone belt in Burkina Faso and is advancing the development and exploration of the Seguela gold project located in Ivory Coast.

We seek Safe Harbor.

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