Roxgold hits Q1 record high for gold production at Yaramoko

Roxgold (TSX: ROXG; US-OTC: ROGFF) has hit a record high for first-quarter production at its Yaramoko underground gold mine in southwestern Burkina Faso, 200 km southwest from the capital city of Ouagadougou, producing 40,452 oz. gold from its 55 Zone deposit. Over the same period last year, Roxgold produced 35,594 oz. gold.

The quarter was stronger than Roxgold forecast, and as a result, the company increased its production guidance for the year by 10,000 oz. gold — to as much as 130,000 oz. gold.

In an interview with The Northern Miner, Roxgold president and CEO John Dorward says slightly better-than-anticipated grades and a larger amount of tonnes through the company’s processing facility drove the increase in production.

John Dorward (left) and Paul Criddle celebrating the first gold pour at Roxgold’s Yaramoko gold mine in Burkina Faso. Credit: Roxgold.

“What we have seen and are a lot more comfortable with now is that the throughput rates should be sustainably higher than we originally planned,” Dorward says.

Roxgold similarly increased its production guidance for 2017 by 10,000 oz. to as much as 125,000 oz. gold midway through that year. The company also attributed the increase to better-than-anticipated head grades and mining rates.

Roxgold exceeded the upper limit of its increased production guidance in 2017, producing a total of 126,990 oz. gold. In that year’s fourth quarter, it produced more than 35,000 oz. gold at an average mill feed grade of 17.6 grams gold per tonne, with 99.1% gold recovery. The company has averaged 98.8% gold recoveries since entering production in 2016. 

At the end of 2016, the 55 Zone contained 1.79 million proven and probable tonnes grading 11.47 grams gold per tonne for 662,000 oz. gold. It also had 1.34 million measured and indicated tonnes grading 17.13 grams gold for 738,000 oz. gold.

The Yaramoko gold mine consists of two deposits: the producing 55 Zone and the in-development Bagassi South. Roxgold expects to process first ore at Bagassi South by year-end.

The company will spend up to $9 million on continued drilling at both deposits, as well as on regional exploration targets. It has drilled nearly 30,000 metres so far this year, and will drill as much as another 40,000 metres.

“We’re drilling quite aggressively on a number of fronts,” Dorward says.

It started drilling the 55 Zone midway through the first quarter in a mixed program designed to improve Roxgold’s confidence in its deposit, and add ounces.

“The throughput rates should be sustainably higher than we originally planned.”
John Dorward
President and CEO, Roxgold

Drilling at 55 Zone is largely carried out from an underground platform — using the only underground drill rig Roxgold has at Yaramoko — in an effort to tighten up the company’s production drill spacing. It also drills from the surface, largely around the deposit’s edges, to see where it can add ounces and confirm its mine plan. The company says it will drill at the 55 Zone for the rest of 2018.

“We’re also doing expansion drilling at Bagassi South,” Dorward says. “I’m optimistic about extending and increasing the resource base there.”

Bagassi South contains 458,000 proven tonnes grading 11.54 grams gold for 170,060 oz. gold. It also has 352,000 indicated tonnes at 16.6 grams gold for 188,000 oz. gold, and 130,000 inferred tonnes at 16.6 grams gold for 69,000 oz. gold.

Roxgold tabled a feasibility study for Bagassi South in November 2017. The study outlined a potential 350-tonne-per-day operation that would add 40,000 oz. gold per year to Yaramoko’s production until 2023. The deposit sits 1.8 km south of 55 Zone.

He says Roxgold may also do a bit of infill drilling at Bagassi South to convert inferred resources to indicated, although the company will focus on extending mineralization down-plunge. Bagassi has a couple of zones that are still open and shallow compared to 55 Zone, where the company has inferred resources more than 1 km below surface.

A stockpile of crushed ore at Roxgold’s Yaramoko gold mine in Burkina Faso. Credit: Roxgold.

“It’s less than 300 metres at Bagassi South,” Dorward says. “So it’s still quite close to surface, and a bit easier to drill off.”

The Burkina Faso government approved Roxgold’s environmental and social impact assessment for Bagassi South this year, and the company is awaiting final approval, which it expects soon. The company plans to start developing the Bagassi South ramp in the third quarter of 2018.

“We’re also doing a substantial amount of regional drilling … and quite a lot around the Yaramoko shear,” Dorward says.

A carbon-in-leach tank at Roxgold’s Yaramoko gold mine in Burkina Faso. Credit: Roxgold.

The company says it is already drilling “very high-profile targets,” including the Tahoe target, which sits a few kilometres south of Bagassi South.

On July 1, Roxgold chief operating officer Paul Criddle will step down, but stay with the company on the board of directors. Roxgold general manager of operations Ian Cox will replace Criddle.

“Ian’s been responsible for really driving the culture and the operations on-site, and has done an exceptional job,” Dorward says. “Unless we change the scope of the company by doing something markedly different, I’m very comfortable with Ian in that chair.”

Shares of Roxgold are trading at $1.17 apiece within a 52-week range of 98¢ to $1.44. The company has a $444-million market capitalization.