Roxgold's Burkina mine just got a whole lot richer

Shares in Roxgold Inc (CVE:ROG) raced higher on Wednesday after the company released the maiden resource at a satellite target at its ultra-high grade Yaramoko project in Burkina Faso.

The Toronto-based junior was changing hands at $1.17, up 5.4% on the Toronto Venture Exchange on the day, bringing year to date gains for the $417m counter to 70%.

Roxgold announced an initial resource estimate at Bagassi South, a satellite target called QV1 within 1.8 kilometres of Yaramoko's 55 Zone deposit. The inferred mineral resource was estimated at 563,000 tonnes at 12.14 grams of gold per tonne gold for 220,000 ounces of gold at a cut-off grade of 5.0 g/t Au. Roxgold said QV1 remains open down plunge.

The company is expected to pour first gold at the $111 million underground mine in West Africa in June. The underground mine will produce 99,500 ounces on average annually for an initial 7.4 years.

Before the QV1 resource which should add significantly to mine life and cash flow from Yaramoko, the project was already 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.

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