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.

Based on the feasibility study, which excludes the North Kao deposit, five openpit areas will be developed in sequence to provide the ore feed for the heap-leach operations. These openpit mining operations will exploit the Goulagou (GGI), Goulagou II (GGII), Kao, Rambo and Nami mineral deposits. Target ore production during the life of the mine is four-million tonnes a year, from no more than two openpits producing concurrently.

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 dorÈ 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
Mining has started at the GGII deposit at the Karma gold mine. True Gold has advised that the project remains on track for first gold production at the end of the first quarter in 2016.

The GGII deposit is the first in line of six deposits that will be mined over the $131.5-million project’s 11.5-year life.

While openpit mining and grade control drilling have started at GGII, True Gold has said the mine fleet has been deployed to the deposit after completing significant excavation of bulk earthworks at the mine’s processing and storage ponds.

Equipment deliveries to site are currently at 92% and procurement is complete.

The GGII deposit holds reserves of 273 000 leachable ounces of gold, contained in 7.6-million tonnes, grading at 1.12 g/t of gold, and will be the primary source of ore during the first two years of production. Meanwhile, True Gold has reported that the project is about 73% complete, with rapid progress being made by the nearly 1 000 staff and contractors on site. With the project remaining completely funded through to production, as of September 30, the company had $19-million in cash and up to $48-million available under its finance facility.

During September, True Gold inaugurated a national ‘stability forum’ led by True Gold’s strategic adviser M‚itre Halidou Ouedraogo, a magistrate and human rights advocate in Burkina Faso. The company organised the forum to foster dialogue and discussion, and promote national peace and stability with delegates from a range of business, community and political backgrounds, including the political parties participating in the upcoming elections.

Meanwhile, the Burkina Faso Council of Ministers has ratified the mining convention that establishes the fiscal and legal terms regarding the operation of the Karma mine. The convention is valid for 20 years and can be renewed for ensuing periods of five years.

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.