Republic of Guinea President Alpha Condé has signed the Decree of Promulgation of the Amendment Agreement for the renewal of the mining convention for diversified gold producer Nordgold subsidiary Société Minière de Dinguiraye’s (SMD’s) Lefa mine.
The mining convention determines the taxation and customs regimes under which the owner of the Lefa mine operates, as well as other provisions regulating the company’s activities in Guinea.
“I’d like to express my sincerest appreciation to the President of Guinea and the Guinean government for the continued open dialogue and productive collaboration. Renewal of the mining convention is an important step for the long-term development of our Lefa mine,” Nordgold CEO Nikolai Zelenski said on Monday.
He further highlighted that Guinea is a key region for the company, with Lefa contributing over 20% of the group’s production. “It has a strong reserve growth potential and we are exploring the possibility of developing underground mining at Lefa, which will further extend the life of the mine, providing more investment, jobs and taxes for the people of Guinea,” he added.
The mining convention renewal will be followed by the renewal of the mining permit, which the company will apply for during this year. The current permit is valid until March 2019 and Nordgold expects to extend the convention and the mining permit for 15 years, in line with Lefa’s current life-of-mine.
In accordance with local law, the Republic of Guinea will receive 15% of the share capital of SMD. The transfer will occur in two tranches, within two years after the ratification of the amendments to the convention.
Lefa’s total mineral resources are 4.34-million ounces, while proven and probable ore reserves are 2.2-million ounces.
In 2018 exploration works will focus on confirming underground potential at Lero-Karta, as well as expanding current pit resources and defining satellite orebodies near the mine. The total budget for the works is anticipated to be $6-million.
In the longer term, exploration work will continue to target yearly reserve replacement by focusing on the extensions of current pits including Firifirini and Toume Toume.
Furthermore, work at Lefa is exploring the significant potential of underground high-grade ore supply from Lero-Karta Deeps and Banora East.
Lefa also plans to accelerate the development of the Sikasso and Duigili regional satellite deposits.
As a result, Lefa’s five-year target is to reach production of 300 000 oz/y.