Roxgold

ROXGOLD ROXGOLD West Africa-focused gold firm builds on a transformative 2019

2019 was a transformative year for West Africa-focused gold explorer and producer Roxgold. The Canadian firm delivered a record gold production sum of 142,204 ounces (oz) from its Yaramoko mine in Burkina Faso over the entire year. Yaramoko is an underground mine complex comprised of two producing zones – 55 Zone and Bagassi South. The former began operation in October 2016 and has consistently delivered a high return on capital since, while the latter came into commercial production at the end of Q3 in 2019. The increased capacity from mining these two deposits allowed Roxgold to process record tonnes in Q4, with the plant reporting an average throughput rate 30% above nameplate capacity at over 1,400 tonnes per day (tpd).

“Yaramoko had an exceptional quarter to finish the year, as we saw record tonnages from the combined operation of 55 Zone and Bagassi South,” says Roxgold’s president and CEO John Dorward. “This outperformance was achievable due to the flexibility built into the plant design and the tireless optimisation work of our team. “With an average head grade of 9.5 g/t, we produced 142,204 oz of gold, generating significant free cash flow, while we continue to see improvements on our per tonne operating costs thanks to the increased mining and processing rates.”

Côte d’Ivoire expansion In addition, Roxgold expanded into Côte d’Ivoire with the acquisition of the Séguéla Gold Project from Newcrest in April. The TSXlisted company quickly got to work at the advanced exploration project, which hosts the Antenna gold deposit within its 3,298 km 2 land package.

The Antenna deposit consists of near surface, potentially open pittable mineralisation and is located near existing infrastructure including grid power, transport and water resources.

In January, Roxgold announced an updated NI 43-101 mineral resource estimate of 7.1 million tonnes (Mt) at 2.3 g/t for 529,000 oz of gold in Indicated and 5.2 million tonnes (Mt) at 2.8 g/t for an additional 471,000 oz of gold in Inferred.

“Séguéla has been an exceptional acquisition for our company and is really starting to take shape. When we acquired the project last year, the Antenna deposit was well drilled by the prior owners.

“This meant we had a good understanding of what was there, and we recognised that it was very attractive with highly prospective

early and advanced stage opportunities. Since getting our boots on and our drills in the ground we have been excited to see indications of the real potential of the project. “We understood that Antenna and its 500,000 oz plus of near-surface mineralisation could be the cornerstone deposit for an open pit operation. However, we now believe the real upside may come from the satellite targets, including Ancien, Agouti, and Boulder,” Dorward reveals. Drilling Séguéla Roxgold has been rigorously testing these satellite targets over the last six months with considerable success, including the most recent results from Ancien in January, when a headline hole returned 42 metres of 16.97 g/t gold from 133 metres. In the updated resource, Ancien accounted for nearly half of the new Inferred ounces with 224,000 oz of gold an exceptionally high grade of 6.6 g/t for a near surface target. Meanwhile, targets like Boulder and Agouti continue to demonstrate the near-surface potential of several of the satellite targets surrounding the original Antenna deposit. “I am very excited by Séguéla’s significant upside potential, notably at the Ancien deposit which remains open at depth and along strike, as well as the potential within the Boulder-Agouti corridor and the additional 22 highly prospective targets that have been identified within the Séguéla Project land package.

“We continue to have all hands on deck at Séguéla, with four rigs turning, and we are eagerly anticipating further results over the coming months.”

Based on the exciting recent drill results from Ancien and the other satellite deposits, Roxgold revised its timeline of economic studies for Séguéla to incorporate the mineral resource growth from outside the Antenna deposit. The company expects to publish a preliminary economic assessment (PEA) in Q2 and a feasibility study by the end of the year.

“We believe Roxgold’s history will repeat itself as we look to rapidly advance the project towards production on time and at cost.”

Here Dorward is referring to Roxgold taking the Yaramoko property from virgin drill hole to producing gold mine in five years, and from feasibility study to commercial production in just two years.

The company will also be focusing on an ongoing resource expansion programme at Yaramoko, which is four years into its originally outlined seven-year mine life. The operation continues to have a strong record of resource and reserve replacement, maintaining a resource inventory above 700,000 oz since starting production.

Following the completion of the Bagassi South decline development, Roxgold expects to see an increase in capital spend at Yaramoko to secure the future of the mine.

“We believe Roxgold’s history will repeat itself as we look to rapidly advance the Séguéla project towards production on time and at cost” John Dorward, Roxgold president and CEO

At the 55 Zone, Roxgold will develop a dedicated underground drill platform 600 metres below surface for further infill and depth extension drilling in H2. This will also put the company in a position to start testing for parallel mineralised structures which are characteristic of similar shear-hosted systems.

Burkina Faso security concerns Roxgold’s continued investment in the Yaramoko mine provides a much needed vote of confidence to Burkina Faso’s mining sector at a time when investor trust has been severely shaken by a recent fatal attack on several buses carrying mineworkers to a gold mine in Eastern Burkina Faso.

On November 7th, A total of 39 people were killed in the ambush attack on public road approximately 40 km from Canadian firm SEMAFO’s Boungou Mine. Despite this shocking severity of this incident, Roxgold has re-emphasised its faith in Africa’s fourth largest gold producer.

“Burkina Faso is facing some challenging times. However, in my opinion it remains one of the world’s most mining friendly jurisdictions,” Dorward asserts.

“We are fortunate to be operating in Western Burkina Faso, which is a more populated region of the country and, therefore, more secure versus the remote East and Northern portions.

“Regardless, security is a growing issue, not only for Burkina Faso, but for mining districts worldwide, so we continue to work with the government, our communities, and our employees to ensure we have a safe working environment. Safety starts with people, and we believe that security starts with your relationship with the communities in which you operate.”

As such, Roxgold has made multiple commitments to the communities close to the Yaramoko mine in recent years, from building local supply chains to having a workforce that is over 90% Burkinabé.

Many of these local employees hold permanent senior positions and therefore

John Dorward, Roxgold president and CEO

take home significantly higher incomes than what they otherwise would. This money supports households, flows through the local economy and contributes to new commercial activities in the area.

A gold firm with a niche After witnessing a year of rising prices and heightened mergers and acquisitions in the gold sector, Roxgold believes it is in a strong position to take advantage of the current conditions in the investor market.

“We are seeing the big producers getting bigger while the juniors and developers tread water. This is creating an intriguing niche for companies like us, as we believe we are well positioned to capitalise on the current low price for exploration and developmentready assets,” says Dorward.

“As a high margin producer, with a strong technical team, we have the cash flows and talent to jump on projects and advance them up the value chain.” This alludes to a broader acquisition strategy in the West Africa region, building on Roxgold’s current position in Burkina Faso and Côte d’Ivoire.

However, Roxgold’s internal targets for 2020 centre on achieving production guidance targets at Yaramoko, advancing Séguéla towards a construction decision, making additional exploration discoveries in both countries and ensuring the continued safety and security of its employees and communities in which it operates.

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