Etruscan, Semafo break ground at Samira Hill

With US$27 million from a recent debt financing in the bank, partners Etruscan Resources (EET-T) and Semafo (SMF-T) have begun construction on the Samira Hill gold project in Niger.

Under the financing deal, 300,000 oz., or 49% of the project’s current recoverable reserves have been hedged. Half of the ounces have been hedged at US$360 per oz.; the other half is hedged at a minimum price of US$360 per oz., with an upside potential of US$390 per oz. The contracts will be delivered into over six years.

Construction of the mine, a 6,000-tonne-per-day carbon-in-leach plant and related facilities is expected to take about a year. The site has already been fitted with roads, a landing strip, a surface water dam, a storage reservoir, a water pipeline, and an electrical power station.

The project comprises the Samira Hill and Libiri deposits, which host a measured and indicated resource of 15 million tonnes grading 1.6 grams gold. Minable reserves stand at 10.1 million tonnes grading 2.21 grams gold. Both deposits are open at depth.

Initially, the plant will run through oxide ore and 4,000 tonnes per day of transition ores from open pits on the two deposits. Beginning in the second year of operation, ore from the upper portions of the Libiri pit will be added to the mix.

First-year production is pegged at 135,000 oz. at a cash cost of US$177 per oz. Over the 6.3-year mine life, it should average 100,000 oz. at US$203 per oz.

ONA/Managem, Morocco’s largest mining company, controls Semafo and will act as operator.

The project is held by La Socit des Mines du Liptako, which is 80%-held by African GeoMin Mining Development (AGMD), with the government of Niger holding the remaining 20%. Semafo and Etruscan Resources each have a 50% participating interest in AGMD.

In other news, Etruscan has completed a private placement of 450,000 shares plus half a warrant at $1 apiece. One warrant allows the holder to buy one share for $1.25 for one year. Proceeds will go to general working capital.