Roxgold's Burkina mine construction gathers pace

Shares in Roxgold Inc (CVE:ROG) showed little reaction on Monday after the company provided an update on construction at its ultra-high grade Yaramoko project in Burkina Faso.

The Toronto-based junior was changing hands at $0.64, down 1.5% on the Toronto Venture Exchange on the day, but some 16% higher than at the start of the year.

The $190 million company announced that the first drawdown of $30 million has been completed under the $75 million 6-year senior secured project finance facility provided by two French banks.

The company said bulk earthworks at the 190 person camp at the underground mine in West Africa is now 95% done brining overall construction to 36% complete.

Roxgold also announced that the Yaramoko water storage facility and tailings storage facility embankments were completed ahead of schedule. The mine access boxcut and portal collar ground preparations were also completed, while the underground access ramp is now developed to 30 metres. The permanent accommodation camp was roughly 85% complete.

Yaramoko capex was upped to just under $111 million earlier this year with $27 million already spent. Last week the company also announced the closing of a $18.4 million private placement at just over $0.71 a share with IFC, a World Bank development agency.

The underground mine will produce 99,500 ounces on average annually for an initial 7.4 years starting mid-2016. Yaramoko is one the highest grade undeveloped deposits in the world containing probable reserves of 759,000 oz of gold at an average grade of a  11.83 g/t gold. It also boasts some of the lowest costs in the industry – all in sustaining costs of $590 an ounce.

Roxgold owns 100% of Yaramoko, but the government of Burkina Faso is entitled to 10%. Top shareholder is Appian Capital Advisory, a $750 million private equity firm formed by industry veterans last year.

Others juniors operating in the region include B2Gold (TSE:BTO), True Gold Mining (CVE:TGM) and Orezone Gold (TSE:ORE). Burkina Faso is the continent's fourth largest gold producer after Mali and has commissioned eight new mines over the past six years.