MONTREAL, Jan. 21 /CNW Telbec/ - SEMAFO (TSX: SMF) today announced the selection of engineering and specialized firms to conduct the Pre-feasibility and Feasibility Studies ("PFS/FS") of the Wona mineralization at depth, at the Company's Mana mine in Burkina Faso. The objective of the PFS/FS is to confirm the economic viability of an underground mining operation using an updated resource model. Results of the pre-feasibility and feasibility studies are expected in Q2 and Q3 2010, respectively.
The PFS/FS come on the heels of a positive Preliminary Economic Assessment ("PEA") completed by the engineering group Met-Chem Canada Inc. ("Met-Chem") in Q4 2009, which confirmed the potential of the Wona underground deposit.
The PEA was based on the December 2008 resources estimates with the inclusion of 2009 drill results up to hole WDC99, which represented indicated resources attributable to the underground mine of approximately 4.5 million tonnes at 3.2 g/t Au diluted for over 460,000 ounces. The PFS/FS will be based on an updated model, which will include all 2009 drilling results (up to hole WCD177). The updated model will incorporate 78 additional drill hole results not included in the previous resources model of the deposits, including among others:
DDH No. Section From To Au / Length*
WDC103 16950 326.3 365.0 3.7 g/t / 38.7 m
WDC126 16750 190.7 212.0 4.1 g/t / 21.0 m
WDC130 18100 250.6 253.6 6.1 g/t / 3.0 m
WDC130 18100 353.0 359.0 2.2 g/t / 6.0 m
WDC133 17050 336.0 393.8 5.24 g/t / 57.8 m
Included 17050 349.4 366.0 10.21 g/t / 16.6 m
WDC 135 17100 218.3 236.0 4.4 g/t / 18.0 m
WDC138 16650 183.0 210.4 7.05 g/t / 27.4 m
WDC140 16900 138.7 160.2 3.90 g/t / 21.5 m
WDC145 16875 261.0 308.2 3.29 g/t / 47.2 m
Included 16875 292.1 298.3 9.75 g/t / 6.2 m
WDC146 16975 332.7 378.2 2.33 g/t / 45.5 m
Included 16975 344.8 359.8 4.09 g/t / 15.0 m
WDC147 16550 162.0 186.0 3.90 g/t / 24.0 m
WDC148 16875 196.0 236.7 3.78 g/t / 40.7 m
WDC149 16975 266.0 326.5 3.61 g/t / 60.5 m
WDC151 16925 308.0 358.6 3.02 g/t / 50.6 m
WDC154 16825 232.0 282.6 3.08 g/t / 50.6 m
WDC157 16825 172.0 194.6 4.19 g/t / 22.6 m
* All lengths are down-the-hole lengths; additional information is
required to determine true widths.
Met-Chem will continue as the Company's engineering consultant for the project and will be responsible for overseeing the PFS/FS, in conjunction with Golder Associates Ltd. and SGS South Africa (Pty.) Ltd. and in accordance with standards set out in National Instrument 43-101.
"The contracts awarded for these studies represent an investment of approximately one million dollars," said Benoit Desormeaux, SEMAFO's Executive Vice-President and COO. "The teams are currently on site collecting the data necessary to complete the studies and are working in close collaboration with SEMAFO's experienced underground mining team led by Patrick Moryoussef, Mining Operations Manager, Michel Crevier, Geology Manager and Qualified Person, and Michel Labonté, Mana Mine Manager."
"We are eager to complete the studies," said SEMAFO'S President and CEO, Benoit La Salle, "We are confident that the ongoing drilling program will have a positive impact on the resources that will be used for the feasibility study. We also believe that considering the excellent drilling results and increasing gold prices, the underground resources will take on a whole new dimension moving forward."
"We consider the study to be an integral part of our organic growth strategy and key to unlocking further value for the Company and its shareholders. We were very pleased with the PEA results and look forward to realizing Mana's true potential," added Mr. La Salle.
The internal rate of return on this Wona mineralization at depth is excellent with the remaining results from the 2009 drilling program yet to be included.
Price of Gold
$800 $900 $1,000 $1,100
IRR (Pre-tax) 12% 25% 36% 47%
Operating Cash Flow ($M) 83 118 152 186
Drilling programs remain ongoing at Mana to extend the at-depth mineralization, as the structure remains open in all directions. As part of the current exploration programs, drilling to further validate the on-surface potential of the property is also in progress. The 2009 drilling results will be taken into account in the calculation of SEMAFO's updated reserves and resources as at December 31, 2009.
Patrick Moryoussef, Eng., Mining Operations Manager, SEMAFO and Qualified Person (as defined by National Instrument 43-101) has reviewed this press release for accuracy and compliance with National Instrument 43-101.
SEMAFO is a Canadian-based mining company with gold production and exploration activities in West Africa. The Company currently operates three gold mines in Burkina Faso, Niger and Guinea. SEMAFO is committed to evolve in a conscientious manner to become a major player in its geographical area of interest. SEMAFO's strategic focus is to maximize shareholder value by effectively managing its existing assets as well as pursuing organic and strategic growth opportunities in West Africa.
Caution Concerning Forward-Looking Statements
This press release contains forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and assumptions and accordingly, actual results and future events could differ materially from those expressed or implied in such statements. You are hence cautioned not to place undue reliance on forward-looking statements. Forward-looking statements include words or expressions such as "objective", "expected", "will", "complete", "ongoing", "growth", "strategy", "unlocking", "look forward", "ongoing", "further", "in progress" "committed", "evolve", "become" and other similar words or expressions. Factors that could cause future results or events to differ materially from current expectations expressed or implied by the forward-looking statements include the ability to complete the pre-feasibility study in Q2 2010 and the feasibility study in Q3 2010, the conclusion of the PFS/FS as to the economic viability of an underground mining operation at Mana, the ability of the ongoing drilling program to positively impact the resources that will be used for the feasibility study, the ability of the PFS/FS to unlock further value for SEMAFO and its shareholders, fluctuation in the price of currencies, gold or operating costs, mining industry risks, uncertainty as to calculation of mineral reserves and resources, delays, political and social stability in Africa (including our ability to maintain or renew licenses and permits) and other risks described in SEMAFO's documents filed with Canadian securities regulatory authorities. You can find further information with respect to these and other risks in SEMAFO's 2008 Annual MD&A, as updated in the 2009 First Quarter MD&A, 2009 Second Quarter MD&A and 2009 Third Quarter MD&A, and other filings made with Canadian securities regulatory authorities and available at www.sedar.com. These documents are also available on our website at www.semafo.com. SEMAFO disclaims any obligation to update or revise these forward-looking statements, except as required by applicable law.
SOURCE SEMAFO INC.
For further information: For further information: SEMAFO: Benoit La Salle, President & CEO, (514) 744-4408, Toll-Free: 1 (888) 744-4408, firstname.lastname@example.org; Sofia St Laurent, Communications, (514) 744-4408, Toll-Free: 1 (888) 744-4408, email@example.com