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 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) 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 during the mine life.

The Karma project’s process design is based on using 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 using 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.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value, at a 5% discount rate, of  $178.2-million, and an after-tax internal rate of return of 43.1%, with payback after 1.4-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
First gold pour is expected in 2016.

Latest Developments
Construction is progressing rapidly at True Gold's Karma project, with construction about 62% complete.

True Gold has said that the community liaison committee, the critical communication channel between the company and the local communities, is operating with more than 80 representatives from local villages.

Construction on the project restarted in May, after protests by religiously motivated locals had halted construction in January. A tripartite agreement signed on June 15 between government, True Gold and community leaders confirmed formal support of the Karma mine.

In the second quarter ended June, True Gold made significant progress at Karma, with more than 600 staff on site. The project is reported to be on track to pour first gold by the end of the first quarter next year.

As at July 31, the mining fleet had been commissioned and was operational. The raw-water-pond excavation has been completed and the water pipeline from the barrage to site is 95% complete. The company has also made good progress on excavating the stormwater and pregnant leach solution ponds and cells one to six of the heap-leach pads.

In the process plant, foundations are under construction for the soft rock crusher, cement silos, cyanide mixing and agglomeration areas. The power plant has been delivered to site, with all generators mounted on plinths, while the fuel farm has been completed.

Meanwhile, the adsorption, desorption and recovery plant assembly has started and is advancing rapidly.

True Gold has completed Phase I condemnation drilling at the Goulagou II waste dump; grade control drilling at the site is currently under way.

The company has procured 99% of the required items, and materials and deliveries to site are 55% complete. The agglomeration drum and elution column have been received on site.

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

On Budget and on Time?
True Gold has noted that despite the construction delays experienced earlier this year, the Karma project is forecast to be funded through construction to production. As at July 31, True Gold had $30.5-million in cash and up to $48.4-million available under its finance facility, with outstanding project costs requiring about $60-million.

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