Name and Location
Karma gold project, Burkina Faso.

Client
True Gold Mining.

Project Description
The feasibility study completed on the Karma project supports a heap-leach mine scenario from currently defined openpit deposits containing 949 000 oz of probable mineral reserves.

The heap-leach pad is designed to process oxide and transition ore from the five shallow pits, with a small amount of leachable sulphide ore extracted from two pits.

The two pits with the highest-grade mineral reserves will be mined first, allowing for rapid payback and strong cash flow from the outset of commercial production.

About 113.8-million tonnes of material will be mined from the five openpits over the course of the estimated project life. This will deliver an estimated 33.2-million tonnes of ore to the process facility and 80.6-million tonnes of waste to storage facilities located near each pit. The overall strip ratio for the project is 2.43:1, with mining being conducted 350 days a year by an owner-operated fleet at total material movement rates ranging from 35 000 t/d to 45 000 t/d.

Conventional truck and shovel methods are likely to be used. Two 200 t hydraulic excavators, configured in backhoe mode, will load a fleet of ten 90 t trucks for the transport of ore and waste to the primary crusher and respective near-pit waste dumps.

Four additional 90 t trucks will deliver ore directly from the pits to the process facilities without the need for ore rehandling.

The soft nature of the openpit ore and waste material will allow for free-digging (excavated without blasting) of the bulk of the material.

Twenty-five per cent of the transition ore and all the sulphide ore material will be drilled and blasted at low powder factors. This comprises only about 10% of the total material to be excavated over the mine life.

The Karma project’s process design is based on the use of conventional heap-leach technology, with a production capacity of four-million tonnes a year. Mined ore will be crushed, agglomerated and conveyed to the leach pad, where it will be stacked in two 10 m lifts and irrigated with a dilute cyanide solution. Gold dissolved by the cyanide will then be adsorbed onto activated carbon in a carbon-in-column circuit. The loaded carbon is then stripped of the gold using Zadra-type elution and the resulting product will be subjected to electrowinning and smelting to produce doré on site.

The mine will produce an average of 97 000 oz/y of gold over a mine life of 8.5 years.

Value
The project requires initial capital of $131.5-million, including on-site working capital and contingency, to support the construction of a mine and associated facilities, with a process capacity of four-million tonnes a year.

Franco-Nevada and Sandstorm Gold have entered into a $120-million stream financing agreement with True Gold Mining to assist in funding the construction of the Karma project.

Duration
The implementation schedule will be carried out over 18 months, with prestripping beginning 12 months prior to the first gold pour, which is expected at the end of 2015.

Latest Developments
True Gold has, to date, spent and committed about $51.5-million, or more than 39%, of its $131.5-million initial capital expenditure (capex), on its Karma gold project.

Prestripping of the Rambo deposit, Karma's highest-grade deposit and the first to be mined, will begin in December.

The company expects Karma to produce about 150 000 oz of gold in 2016.

Karma is currently fully funded and permitted, one of a select few gold mines under construction globally and the next gold mine to go into production in Burkina Faso. During mine operations, True Gold expects to employ more than 400 people at the mine. Key personnel are in place, with recent hires including the mine superintendent and mine general foreman.

Procurement was 33% complete at the end of October, ahead of the planned 23%, while earthworks on the plant site terraces were completed one month ahead of schedule. Civil works were 20% complete at the end of October, ahead of the planned 14%, and work had started on foundations for the adsorption, desorption and recovery plant, cement-storage facility and maintenance shop. The administration, security and medical buildings have been built, with mine offices 90% complete. Major earthwork projects and construction of haul roads, a raw water-storage pond and the base for the heap-leach pad will start in January 2015.

Two dozers and two graders, part of the mining fleet, were delivered to site on November 11, while all mining fleet vehicles and equipment are expected on site by January 2015.

On October 21, True Gold indicated that it had completed a preliminary economic assessment (PEA) on the North Kao deposit that demonstrated the potential to enhance the 8.5-year mine life outlined in the Karma project’s definitive feasibility study (DFS).

The PEA on North Kao, or the Phase 2 expansion scenario, supports a heap-leach mine that will produce an average of 118 000 oz/y of gold over 2.5 years.

The PEA indicates the potential to add $118-million in after-tax free cash flow to the DFS economics. North Kao will yield an after-tax internal rate of return of more than 200% and add about $70-million to Karma's after-tax net present value.

True Gold plans to carry out infill drilling to upgrade the inferred resources at North Kao, which is the northern extension of the existing Kao deposit. Upon upgrading the resource category, True Gold will be able to advance further mine schedule optimisations; however, there is no certainty that the resources will be converted to reserves.

Meanwhile, True Gold has identified more than 40 high-priority exploration targets over the 856 km2 property, with targets including high-grade rock values associated with gold-in-soil anomalies and historical workings at Karma that have yet to be tested.

The company has budgeted about $5-million for exploration in 2015 and will be focused on discovering new domains of openpit, leachable material that can be incorporated into a future mine plan. Mapping of the Kao trend is under way.

Over a strike length of more than 10 km, the trend hosts the Kao/North Kao pair of deposits, open to the north and south; the Nami deposit and its extensions; and numerous earlier-stage targets, including anomalies B & C, Idriss and Bonguirga.

Key Contracts and Suppliers
SENET (barrage construction and detailed engineering and construction-level design work).

On Budget and on Time?
To date, all aspects of the project are on time and within budget.

Contact Details for Project Information
True Gold Mining, tel +1 604 801 5020 or email info@truegoldmining.com.