WWW.RESOURCEGLOBALNETWORK.COM
MINING | Roxgold
Resource Global Network
ROXGOLD Canadian mining company goes for gold in West Africa
MINING | Roxgold
Roxgold started life as a junior gold explorer with a joint venture earn-in agreement for the Yaramoko property, located within the gold-rich HoundÊ greenstone belt in Burkina Faso. The company began exploring the property in 2011 and eventually made a discovery with the 55th drill hole of the programme; hence the name 55 Zone. After taking the project through the first rounds of exploration, the 55 Zone emerged as a high grade discovery and a very coherent deposit according to Roxgold’s president and CEO John Dorward. A feasibility study for an underground mine followed in 2014 and commercial production was declared in October 2016. During the last three and a half years of production, the project has consistently delivered a high return on capital, based on double digit grades and low costs.
A premier gold jurisdiction “We have gone from a virgin drill hole discovery to having a producing gold mine in five years. There are very few jurisdictions
Resource Global Network
MINING | Roxgold
Resource Global Network where you can legitimately achieve that in that amount of time,” says Dorward. This reference is a testament to Burkina Faso’s rising status as a premier gold mining jurisdiction on the African continent. The industry has been booming in recent years, becoming Africa’s fourth largest gold producer in 2017 and Burkina Faso expects to announce another record year of gold output for 2018. During its time in Burkina Faso, Roxgold has experienced a jurisdiction with a pro-mining and pro-foreign investment stance, along with a permitting process that is clearly established, articulated and not bound in superfluous red tape. John Dorward, Roxgold president & CEO
Recent security challenges are a genuine concern for Roxgold and the country’s
going to be Roxgold’s next gold mine in West
mining investors, however Dorward remains
Africa.”
steadfast in his belief that Burkina Faso is a premier gold mining jurisdiction.
Roxgold has already started exploration drilling at Séguéla’s Antenna deposit and
Since becoming a cash generative company
has a number of satellite targets that will be
via gold production from 55 Zone, Roxgold
drilled, with the aim of increasing resources
has been able to pay down a significant
and ultimately compiling a preliminary
portion of its project finance debt, while also
economic assessment and a feasibility study
turning to additional developments, most
for Séguéla.
notably making its first acquisition in April. “We acquired the Séguéla gold project in Côte
2018 operational performance
d’Ivoire from Newcrest for $20 million and
In 2018, the company was able to increase
are in the process of updating the resource
year-on-year gold production by 4% to
statement to be 43-101 compliant. We like
132,656 ounces, with an average head grade
what we’ve seen so far and definitely think it’s
of 13.5 g/t from a record 307,591 tonnes of
MINING | Roxgold
AUMS advert April-18.indd 1
29-Apr-19 8:09:16 PM
processed ore. Dorward puts this improved
This year, Roxgold’s gold output is set to be
operational performance down to increased
further boosted by the arrival of a second
efficiencies at the mine and mill.
gold producing mine within the Yaramoko project. First ore was produced at Bagassi
“The mill has consistently run above
South in October 2018 and it’s expected to
nameplate capacity. We did a few things in
reach commercial production in Q2 2019.
the original design, such as installing a larger motor in our SAG mill, which has helped us
The successful development of Bagassi South
sustain a higher than nameplate throughput
has been coupled with an expansion of the
capacity.
processing plant at Yaramoko, which was completed in December 2018 and increased
“We have also invested a significant
capacity by nearly 50% from 750 tonnes per
amount of capital upfront in underground
day (tpd) to 1,100 tpd.
development of the mine. Contrary to a lot of underground mines, we are well in front
“This is a significant milestone for us and a
of where we need to be. If there is an issue in
very important addition to the Yaramoko
one part of the mine, there are other areas
mine. Not only does it enable us to support
we can work in and maintain our productivity
the expansion of the processing facility, it
levels. I think it’s been a productivity driven
also brings mutual mitigation to the story.
story,” says Dorward.
ResourceGlobal GlobalNetwork Network Resource
“Underground mining can be a challenging
Services (AUMS) – a division of Australian
business and having a second deposit lowers
contractor Ausdrill.
the overall risk of the project.” AUMS have been active in the African Roxgold has also identified further resource
underground mining sphere for many
growth potential at both 55 Zone and Bagassi
years and were in fact initial investors into
South, which it will look to explore in the near
Roxgold, participating in equity financing for
term. At 55 Zone, the company has drilled the
the Yaramoko mine. As a result, AUMS and
shoot to a depth of over 1,000 metres and
Roxgold have a strong relationship and a
will publish an updated resource at the end
good alignment of interests.
of Q2. Meanwhile, Roxgold will focus on near surface infill drilling at Bagassi South in the
“They recently won a contract for Bagassi
coming months.
South, which was a 12-month extension
Strong partnerships
of the overall Yaramoko mining contract. We saw quite a decent reduction in costs
Roxgold has worked closely with a number
to reflect that ongoing relationship and
of service providers in the development
the increased volumes. AUMS are by
and operation of its facilities at Yaramoko,
far our biggest contractor and are quite
including African Underground Mining
embedded with us in terms of the operating procedures.”
MINING | Roxgold
Resource Global Network In addition, Roxgold has also used Geodrill for exploration work and drilling in Burkina Faso and now in Côte d’Ivoire as well. ATS is Roxgold’s camp and catering contractor, while various construction services have been provided by DRA and Group Five out of South Africa. “We’ve had a number of significant contractual arrangements and by and large they’ve all been positive for us. We’ve had good interaction with our partners,” Dorward declares.
Local expertise At the Yaramoko mine, Roxgold has made a concerted effort to build a workforce of primarily Burkina Faso nationals, in a show of support to the country which welcomed its arrival into the mining sector. “We run with a very low level of expatriates and over 90% of our workforce is Burkinabé, many of whom hold senior positions within the operating team. “There is not a very long history of underground mining in Burkina Faso, so there weren’t as many underground mining engineers in Burkina, but we are now starting to see that develop,” Dorward continues. During the permitting process, Roxgold also committed to training and hiring locals from around the mine site, running an apprentice programme for youths from the local village. The apprentices were sent to work with one
MINING | Roxgold
Resource Global Network
of the company’s construction contractors,
more investment in terms of commercial
gaining valuable skills of the trade. The
activities, shops and small businesses being
apprentices were then hired by Roxgold to
established.”
become a key part of the plant processing and maintenance team.
In addition to bringing lucrative employment opportunities, Roxgold has also organised
Dorward believes that, in addition to local
several community investment programmes
procurement practices, the most important
in the local area, including teacher
single contribution that the company
training, agricultural workshops and solar
has made to the local communities has
electrification for medical centres.
come in the shape of secure full-time jobs. “We’ve brought a large number of well-paid
“I think as a responsible mining company
permanent positions. They work a full week
and a good neighbour, we are making
and earn significantly higher incomes than
a very positive contribution in the local
what they otherwise would.
communities.”
“That flows through the community and
West African expansion
helps households. It’s a much more
After establishing itself in Burkina Faso,
vibrant community now, you see a lot
Roxgold is now excited to be moving into
MINING | Roxgold
Côte d’Ivoire with the acquisition of the
“The terrain is very fertile for gold discoveries
Séguéla project. Dorward believes that Côte
and there are several examples of large gold
d’Ivoire has been historically underexplored
deposits in Côte d’Ivoire such as those owned
despite having extensive greenstone belts
by Randgold Resources [now part of Barrick
that run down from Burkina Faso, Mali and
Gold]. We think the property we acquired has
Ghana.
a lot of upside.
Resource Global Network
“We have gone from a virgin drill hole discovery to having a producing gold mine in five years. There are very few jurisdictions where you can legitimately achieve that in that amount of time” John Dorward, president and CEO, Roxgold that we are starting to drill. The potential is there to bring those into resource status and ultimately into production. It should be a low capex, high returning operation and will sit very nicely next to Yaramoko.” After expanding into Côte d’Ivoire, Dorward feels that the company is right at home in West Africa, with a management team that is highly experienced in the region and wellequipped to take on additional projects further down the track. “West Africa is the most logical area for us to be looking, but good projects are hard to find so we keep an open mind as to what might be available. We stand to benefit from the skill of our team and the significant amount of cash that Yaramoko will be generating in the coming years,” he concludes. “At Séguéla, the Antenna deposit will get larger but I think the main story will be around the large number of satellite targets
TSX:ROXG OTC:ROGFF
j
Published by Anderson Murray Media Ltd
To tell the resource market your story, contact: editorial@resourceglobalnetwork.com
WWW.RESOURCEGLOBALNETWORK.COM