Roxgold rockets on Burkina permits

Shares in Roxgold Inc (CVE:ROG) gained more than 10% in brisk trade on Friday, after announcing it has received final permitting approval for ultra-high grade Yaramoko project in Burkina Faso.

In midday dealings the Toronto-based junior was trading just off its highs for the day changing hands at $0.68, up 9.7% on the Toronto Venture Exchange.

Roxgold is now up up 23.6% in 2015, but still down more than 17% over the past six months following political upheavals in Burkina Faso. The approval also restores some confidence in Burkina Faso's ability to move mining forward amid the turmoil.

With the mining decree, the $195 million company can now move forward with the start of construction of the underground mine in West Africa and complete a project financing package of some $75 million.

Yaramoko stands out as a project thanks to a combination of one of the high-grade undeveloped deposits in the world containing probable reserves of 759,000 oz of gold at an average grade of a whopping 11.83 g/t gold and some of the lowest costs in the industry – all in sustaining costs of $590 an ounce.

The Yaramoko feasibility improves on the PEA and calls for a low capex – only $106 million placing it in the bottom 5% of African gold projects – underground mine producing 99,500 ounces on average annually for an initial 7.4 years.

Roxgold owns 100% of Yaramoko, but the government of Burkina Faso is entitled to 10%. Top shareholder is Appian Capital Advisory, a private equity firm formed by industry veterans last year.

Roxgold's share price like others operating in the region like B2Gold (TSE:BTO), True Gold Mining (CVE:TGM) and Orezone Gold (TSE:ORE) have been on a wild ride since Burkina Faso's longtime president Blaise Compaore was ousted in a popular uprising in October after 27 years in charge of the country.

Orezone also jumped more than 10% on Friday although True Gold and B2Gold, a $2.2 billion company with far-flung operations did not capitalize.

Burkina Faso with a population of 18 million is one of the poorest in the world. It is the continent's fourth largest gold producer after Mali and has commissioned eight new mines over the past six years.