Montreal-based Semafo‘s (SMF-T, OMX-Q) three operating mines in West Africa are expected to produce a total of between 235,000 ounces of gold and 260,000 ounces of gold in 2012, according to company forecasts.
Earlier in the month Semafo forecast total production in 2011 would reach 250,100 ounces of gold.
About 75% of the gold in 2012, or between 178,000-195,000 ounces, are expected to come from Semafo’s Mana mine in Burkina Faso, 46,000-50,000 ounces will come from its Samira Hill mine in Niger and 11,000-15,000 ounces from its Kiniero mine in Guinea.
This year cash operating costs at Mana will fall somewhere between US$615 per oz. gold and US$665 per oz. gold. Cash operating costs for 2011 were forecast earlier in the month to be between US$595 and US$645 per oz.
The company’s global operating cash cost in 2012 is expected to fall somewhere in the range of US$700 per oz. and US$750 per oz.
Semafo will spend US$45 million on exploration this year, of which 80% or US$36 million will be spent on Mana. Last year Semafo invested US$38.5 million on exploration at Mana with more than 300,000 metres of reverse-circulation, diamond and air core drilling and about 135,000 metres of auger drilling over priority targets including the Fofina-Fobiri, Yaho, Kona, Wona, Massala and Saoura areas.
The strike length of the newly discovered Yaho area has more than doubled to more than 1.5 kilometres and remains open in all directions. About one-third of the drill samples taken at Mana in 2011 are pending and as a result the company has deferred updating the mine’s reserves and resources until June so that it can include all exploration results up to Dec. 31 2011.
To help speed up assay processing, Semafo decided in June last year to build a laboratory on the Mana property at a cost of about US$500,000. The lab will open in the first quarter of 2012 and improve the turnaround time for drill results.
The construction of all surface infrastructure and services to support underground operations at Mana will be completed by the end of the first quarter of 2012, according to underground mining contractor Dumas.
Capital expenditures this year are expected to reach US$195 million, including the fourth phase of the plant expansion (US$10 million); the new production facility (US$52 million); the Wona deep development (US$58 million); and stripping costs of (US$37 million.)
Semafo shares closed down 98¢ apiece or 12.22% at $7.04 within a 52-week band of $6.06-$11.40 per share. The company has about 273 million shares outstanding.
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