MONTREAL, May 6 /CNW Telbec/ - SEMAFO (TSX: SMF) today announced the purchase of a new mining fleet for its Samira Hill Mine in Niger. As owner miner, SEMAFO will ensure higher availability and productivity, as well as reduce cash operating costs at Samira Hill. The payback period for this $19,000,000 investment is approximately 3.5 years.
As a result of this strategic investment, SEMAFO is forecasting mining cost savings of 30%, representing cash operating cost savings of approximately $70 per ounce at Samira Hill. Additionally, Samira Hill will benefit from substantial cost savings associated with civil works previously outsourced, such as raising the tailings dams, road maintenance, transportation and ore re-handling to the mill.
The mining equipment consists mainly of 2 dozers (D275-5R), 10 haul trucks (HD605-7R) and 2 hydraulic excavators (PC1250SP-8R). Machinery is scheduled to arrive on site in September and October 2010 and will be fully operational in the fourth quarter 2010. The transition to owner mining will be sustained through the efforts of our experienced management and staff. SEMAFO anticipates a smooth changeover from the incumbent mining contractor.
SEMAFO is pleased with the progress achieved to date on the selection and projected delivery dates of the new mining fleet for Samira Hill. Two new Cat 988H wheel loaders are already on site and operational.
"Historically SEMAFO's experience as owner miner has proved successful, resulting in improved operating costs and productivity," said Benoit Desormeaux, SEMAFO's Executive Vice-President and Chief Operating Officer. "Samira will undoubtedly benefit from our vast experience in terms of logistics, inventories and management. We are confident that the results of this strategic investment will continue to optimize and enhance performance to generate superior cash flows, thereby increasing shareholder value through improved financial performance."
SEMAFO is a Canadian-based mining company with gold production and exploration activities in West Africa. The Company currently operates three gold mines: the Mana Mine in Burkina Faso, the Samira Hill Mine in Niger and the Kiniero Mine in 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 "will", "forecasting", "scheduled", "continue", "committed", "evolve", "become", "pursuing", growth", 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 achieve higher availability and productivity and reduce cash operating costs by approximately $70 per ounce as owner miner at Samira Hill, the ability to achieve mining costs savings of 30%, the ability to obtain the mining equipment on schedule, the ability to find organic and strategic growth opportunities in West Africa, 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 2009 Annual 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.
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