Semafo adding ounces in Burkina Faso

Shares of Semafo Inc (TSE:SMF) received a bump on Thursday, after announcing that it had resumed development of the Wona North pit at its Mana Mine in Burkina Faso.

After rising 72% year to date Semafo is now worth $1.9 billion on the Toronto Stock Exchange.

The Montreal-based producer in 2014 suspended operations at Wona North in order to reassign a portion of the mining fleet to the development of the high grade Siou and Fofina deposits.

In 2017, the Mana Mine is expected to process ore from the Fofina, Siou and Wona North pits. Reserves at Wona currently total 12.7 million tonnes at an average grade of 2.30 g/t Au containing 935,000 ounces of gold.

The company expects to increase its annual mining capacity to 40 million tonnes for the next three years in order to produce between 225,000 – 245,000 ounces of gold per year at Mana this year and next. The Fofina deposit expected to be depleted in the first half of next year.

A total of 2.3 million tonnes of waste material will be extracted from the Wona North pit this year. To reflect the commencement of stripping at Wona, the 2016 capital expenditures budget at Mana has been adjusted from $44.3 million to $47 million.

The company's Natougou project also in Burkina Faso is expected to add 100,000 annual ounces by 2018 and 226,000 ounces to Semafo's output to lift total production to 426,000 ounces in 2019.

Exploration and development companies operating in the region include Roxgold Inc (CVE:ROG), 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.