SEMAFO is expanding its flagship Mana Mine in Burkina Faso through a $30 million exploration program. Drilling continues to find gold deposits near the mine, including the Fofina and Fobiri zones south of the original permit that contain over 1 million ounces of inferred resources. The mine has seen record production in the second quarter and a feasibility study predicts the underground mine could produce over 900,000 ounces over nine years. The CEO is optimistic about the mine's future given its consistent production and exploration successes over the past 10 years.

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Mana From Heaven
SEMAFO Expands its Burkina Faso Flagship
~ By Greg Klein - July 25, 2011
According to the Book of Exodus, God’s provision of manna sustained the Is- metres, 1.9 g/t over 14 metres (including 3.4 g/t over 5 metres), 1.16 g/t over 21
raelites through their 40-year journey to the Promised Land. But there’s no final metres (including 1.72 g/t over 10 metres) and 1.19 g/t over 19 metres.
word on how long nature’s provision of gold will sustain SEMAFO’s Mana Mine. May 12 results from Wona’s SW Zone include 4.17 g/t over 32 metres, 4.45
A $30-million exploration program expands the mine as it produces. That’s the g/t over 10 metres, 2.27 g/t over 51 metres (including 6.25 g/t over 6 metres),
surprising outcome of a charitable mission to Burkina Faso. 3.49 g/t over 28 metres (including 3.6 g/t over 25 metres) and 2.41 g/t over 25
metres.
La Salle comments on the July 18 results, “They confirm the geology, the width
and the grade. We’re extremely pleased because the original results were
strong, and we’re pleased that with systematic and very tight drilling we’re able
to see the inferred resource moving up into the category of reserve or measured
and indicated, depending on the final work done by our geologists.”
SEMAFO currently budgets $30 million for its 15-rig drilling program and plans
further expansion in 3Q. At 2010 year-end Mana’s reserve estimate showed
25.47 million tonnes grading 2.64 g/t for 2.16 million ounces proven and prob-
able. Mana’s resource estimate showed 23.66 million tonnes grading 1.5 g/t
for 1.13 million ounces measured and indicated. Total reserves and resources
came to 49.13 million tonnes grading 2.1 g/t for 3.29 million ounces. The com-
pany lists its inferred resource separately: 36.47 million tonnes grading 2.28 g/t
for 2.68 million ounces.
Mana’s 2Q figures, released July 6, show record production of 47,800 ounces,
a 6% increase over 1Q and 75% of SEMAFO’s total gold production for the
second quarter.
A feasibility study announced March 31 predicted an underground mine below
In 1994, Benoit La Salle travelled to West Africa on behalf of Plan, a charity Mana’s current open pit would produce 942,600 ounces at a cash operating
dedicated to developing countries. He met Burkina President Blaise Compaore, cost of US$589 per ounce or US$42.25 per tonne processed over a nine-year
who invited him to return and study the country’s gold-mining potential. La Salle lifespan. The mine would require initial capital expenditures of $140 million, with
was a chartered accountant with no mining background. “I knew nothing about it a pre-tax operating cash flow of $452 million bringing a 28% internal rate of
at all,” he told the Financial Post last year. Now he’s CEO of SEMAFO, a mid-tier return and a three-year payback period.
producer with two other African producers—Samira Hill in Niger and Kiniero in
Guinea—besides its flagship Mana. Talk with him, and it’s evident that mining’s La Salle enthuses about Burkina Faso. “The people, the government really are
gotten well into his blood. pro-mining. The workforce is pro-mining; the unions are pro-mining. The ministry
of mines and finance is open-minded about anything that needs to be done to
“The Mana Mine is a very large district, 2,000 square kilometres in Burkina accelerate the development of mines and projects.”
Faso,” La Salle says. “It’s a district that has a very strong magnetic signature
and that has been normally a very good indicator of where the sediments are. Last February, however, economic concerns set off a series of strikes and
We have over 200 kilometres of magnetic signatures that are very easy for us protests that were accompanied by army mutinies. As the unrest continued,
to identify with the new tools. So in early 2000 we discovered a structure which SEMAFO announced April 18 that its operations were unaffected. Neverthe-
we call the Wona structure, which currently hosts over two million ounces [in less the company’s stock fell close to its 52-week low of $6.54. At press time
reserves]. That’s where we built the first [open pit] mine. SEMAFO had 272.7 million shares outstanding at $8.77 a share, for a market
cap of $2.39 billion.
“Last year, as we were following a similar signature south of the permit, we
discovered the Fofina-Fobiri structures,” La Salle continues. “They were show- La Salle concludes, “I think the key thing about Mana is that in the past 10 years
ing about a million ounces inferred. Fofina is more of a high-grade system and it’s never missed a beat. Every quarter it’s got good drill results; every quarter
“
not as wide. It will go from a couple of metres up to sometimes 10 metres wide, it’s got great production. The construction of the plant was done in 14 months,
but the grade will go from 3 grams up to 15 grams per tonne. Fobiri, which is a the commissioning in 45 days. It just keeps giving the results we’re looking for.”
parallel zone to Fofina, a couple of kilometres to the east, is a longer system. It’s
a lower grade but wider, and these are two very nice systems which currently
show about one million ounces.” The key thing about Mana is that in the
Fofina assays released July 18 include 19.46 grams per tonne gold over 8 past 10 years it’s never missed a beat.
metres, 4.29 g/t over 25 metres, 7.49 g/t over 7 metres, 17.22 g/t over 2 metres Every quarter it’s got good drill results,
and 7.49 g/t over 4 metres.
every quarter it’s got great production.
Assays from Mana’s Yaho Zone, 4.5 kilometers from Fofina and 20 kilometers
from the Mana mill, were released June 28. Highlights include 1.56 g/t over 19 – Benoit La Salle
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