Mr. John Jentz reports

SEMAFO: DEBT AND CORPORATE UPDATE

Semafo Inc. has provided a debt and corporate update. All amounts are in United States dollars unless otherwise stated.

Benoit Desormeaux, president and chief executive officer of Semafo, stated: "Macquarie has been our sole lender and an excellent partner through this difficult time. I would like to thank them for their support as we work towards a restart plan at Boungou and ramping up to full production at Siou underground at the end of the first quarter of 2020."

Debt update

Semafo has entered into an amendment agreement with Macquarie Bank Ltd. that updates the original credit agreement. The original agreement remains in force and the amendment agreement provides two main updates.

The first update relates to an event of default provision. The original agreement provided that an event of default occurred when, among other things, operations at Boungou remained suspended for a period of 30 days or more. The company obtained a waiver from Macquarie in early December as it worked toward the amendment agreement. Under the amendment agreement, a new event of default occurs if the mill has not restarted and the processing of ore from the existing stockpiles at Boungou has not commenced by Feb. 15, 2020, or such later date that Macquarie may agree with.

The second update relates to the reserve account, recorded as restricted cash, in which $15-million is held until the loan reaches $30-million. Under the amendment agreement, this restricted cash of $15-million will be applied against the principal payment on Dec. 31, 2019. The reserve account and restricted cash will therefore be nil at Dec. 31, 2019, and Semafo will be required to replenish the reserve account back to $15-million by March 31, 2020, in addition to making the regular principal payment of $15-million due March 31, 2020.

Corporate update

The company continues to manage cash and working capital conservatively and prudently, including postponing exploration activities. Its 2020 plan will focus on maximizing cash flow. The company continues to evaluate a variety of options to restart operations at Boungou in a safe and secure manner.

About Semafo Inc.

Semafo is a Canadian-based intermediate gold producer with over 20 years of experience building and operating mines in West Africa. The corporation owns two mines, the Mana and Boungou mines, in Burkina Faso. Semafo is committed to building value through responsible mining of its quality assets and leveraging its development pipeline.

We seek Safe Harbor.