Nordgold reports that construction has been completed and gold production has begun at the pure-play gold producer’s Bissa gold mine, in Burkina Faso, which makes the independent and inter- nationally diversified miner the first company to operate two mines in the West African country.

The miner completed construction of Bissa in a record 15 months – ahead of schedule and within budget. Total investment in the project was $250-million.

“First gold production from the Bissa gold mine is an important milestone for us. It clearly demonstrates our team’s ability to develop these significant projects and will serve to accelerate our organic growth to the benefit of all stakeholders,” says Nordgold chairperson Philip Baum.

He believes Bissa has the potential to be a significant gold-producing asset and says it forms part of Nordgold’s growth strategy, together with the company’s other leading development project, the Gross gold mine, in Yakutiya, Russia.

Project Progress

The Bissa gold mine, situated in the rural commune of Sabce, 100 km north of the capital city, Ouagadougou, was an advanced exploration project when Nordgold acquired a 50.1% controlling stake in gold mining company High River Gold Mines (HRG) in November 2008.

Africa operations MD Igor Klimanov tells Mining Weekly that, at the time of the acquisition, Nordgold was confident that the area had potential.

As of January 2012, the pro- ject’s proven and probable resources were estimated at 1.8-million ounces, while measured, indicated and inferred resources totalled 4.9-million ounces.

Now fully operational, Bissa is expected to produce up to 100 000 oz of gold in 2013, with more precise guidance expected during the ramp-up process later this year.

The mine’s projected processing capacity is four-million tons a year of ore, with a peak capacity of up to 200 000 oz.

“Bissa will provide a significant boost to the company’s production profile,” says Klimanov, adding that, according to current reserve estimates, it is expected to have a life-of-mine of about ten years.
After the Taparko gold mine, Bissa is Nordgold’s second operating asset in Burkina Faso and its third asset in Africa, bringing the total number of the com- pany’s operations to nine.

African Assets

Nordgold’s growing presence in West Africa makes it unique among its Russia-listed peers, says Klimanov, adding that the company already has a reputation for delivering growth in the markets.

Taparko, Burkina Faso’s first mine, was constructed in 2007 and is an openpit gold mine located in Namantenga province. The project has a Joint Ore Reserves Committee- (Jorc-) compliant reserve of 0.6-million ounces, grading 2.7 g/t, with mineral resources of 1.3-million ounces at 2.2g/t.

Taparko produced 35 600 oz in the fourth quarter of 2012.

Klimanov says Burkina Faso is a good example of how a government can work effectively with international investors and tackle the country’s dis- advantages.

He adds that Nordgold has only had positive experiences in the country in terms of developing a mine, and says the company was fully supported by the local government.

He tells Mining Weekly that, from 2009 to 2011, Nordgold invested more than CFAfr20-billion in exploration activities in Burkina Faso, with an additional CFAfr14-billion paid in taxes.

“As we have shown at Taparko, we are committed to demonstrating best practice in helping local communities develop by creating attractive working conditions for our employees,” he says.

Having acquired the mine in 2008 as one of HRG’s assets, Nordgold increased Taparko’s processing capacity from 1-million tons a year to 1.6-million tons a year with minor investments.

Klimanov tells Mining Weekly that Taparko has the highest head grade among Nordgold’s openpit mines (about 3 g/t) and the lowest cash cost per ounce produced. He adds that Taparko also holds the record for having the best safety performance out of all of Nordgold’s mines.

According to Nordgold’s operational results, published last month, gold production for 2012 decreased 5% from 2011 to just under 717 000 oz, owing to several operational challenges faced in the first half of 2012, which impacted on the full-year results.

“Nordgold undertook a number of operational measures at this time to improve production at all of its mines. As a result, we are pleased to report that the improvements highlighted in our third-quarter operational report continued into the final quarter of that year,” says Nordgold corporate spokesperson Diana Asonova.

She says the company turned the corner in mid-2012 and should now enjoy a recovery in earnings.

Klimanov notes that the Lefa gold mine, in Guinea, and Taparko started strongly this year, with operating and geological conditions now in place to deliver a positive result.

Further, Nordgold reported a strong quarter in its diversified development programme, with the formal launch of the Bissa gold mine, together with considerable progress at the Gross gold mine in the fourth quarter of 2013.

He believes in the company’s robust growth profile, which is supported by its ongoing operational turnaround and diversified portfolio of assets.

“Last year was a challenging year, but we started 2013 in a strong position, partly owing to the positive launch of Bissa,” Klimanov adds.
Nordgold’s exploration budget in Russia, Kazakhstan, Burkina Faso and Guinea for this year is about $100-million, of which $25-million and $13-million have been set aside for Burkina Faso and Guinea respectively.

He remains confident in the long-term fundamentals of gold, which is driving Nordgold’s investment in the business.

“Gold is, of course, a hedge against inflation and supply will always be constrained. We believe the prospects for gold in West Africa are promising, hence our considerable investment in the region,” Klimanov concludes.