Shares of Semafo Inc (TSE:SMF) added 5.7% on Thursday, after announcing a large maiden reserve for the Siou deposit at its Mana gold mine in Burkina Faso.
According to a news release by the Montreal-based company the new estimates and mine plan indicate a sizeable increase in production coupled with lower cash costs:
Owing to Siou’s proven and probable reserves of 4,842,900 tonnes at an average diluted grade of 4.94 g/t Au for 769,300 ounces, Mana’s gold reserves increased 28% to 2.4 million ounces, net of depletion. Mana’s measured and indicated resources total 2.4 million ounces at an average grade of 2.12 g/t Au. Siou continues to demonstrate its potential with inferred resources of 6,227,600 tonnes at 3.97 g/t Au for 795,300 ounces as at June 30, 2013. The Siou mineralization remains open laterally and at-depth. Reserves and resources have been calculated using a gold price of $1,100 and $1,400 per ounce, respectively.
The $660 million company currently operates two gold mines: the Mana Mine in Burkina Faso and the Kiniero Mine in Guinea. Its Samira Hill Mine in Niger was placed on care and maintenance in August and Kiniero is also being wound down.
Semafo expects production of between 153,000 and 168,000 ounces of gold for its current financial year at at a total cash cost of $805 – $855 per ounce at the Mana mine.