Semafo cuts Samira Hill costs by $70 per oz.

Semafo (SMF-T) expects mining costs at its Samira Hill gold mine in Niger to be 30% cheaper after a $19-million investment in a new mining fleet.

The new fleet, which will take 3.5 years for the company to pay off, will cut mining costs by $70 an oz. In 2009, the company reported having a cash operating cost of $665 per oz. on production of 56,900 oz. gold.

Semafo says it will be transitioning to owner mining from contract mining when as it gets the new equipment.

Two dozers, 10 haul trucks and two hydraulic excavators are the main items in the fleet. Two new Cat 988H wheel loaders are already on site and operational.

The machinery should arrive in September and October and will be fully operational by the fourth quarter.

The company says there will be other cost savings associated with civil works that were previously outsourced.

Semafo is spending another $6 million on exploration at Samira Hill over the next two years, focusing on the Boulon Jounga zone, which is part of the Samira Horizon, a 50 km-long gold belt about 90 km west of Niamey, the capital of Niger.

Semafo has an 80% interest in the mine. The Government of Niger holds the remainder.

The company also operates the Mana mine in Burkina Faso and the Kiniero mine in Guinea.

Semafo shares rose 8%, or 49¢ today, to $6.50 apiece on a trading volume of 2.4 million shares.