TrueGold surges after extending Burkina Faso find

TrueGold surges after extending Burkina Faso findTrueGold Mining (CVE:TGM) jumped more 6% on Monday on heavy volumes, after announcing strong results from step-out drilling at its Karma Gold Project’s Nami deposit in Burkina Faso.

During lunchtime trade the Vancouver-based junior was trading at $0.41, up 6.% on the Toronto Venture Exchange, off its highs for the day. More than 445,000 shares in the $163 million company changed hands and the counter is up 14% over the past month.

TrueGold intersected 29.5 g/t gold over 6.0 metres and extended the Nami deposit 250 metres north, along a corridor 150 metres wide. This extension has the potential to add an additional 50% to the strike length of the current Nami deposit outlined in the project feasibility study the company said in a statement.

"We strongly believe that this northern Nami extension will add to the overall resource at Nami in much the same way that North Kao has added to the Kao deposit," said Scott Heffernan, VP for Exploration adding that "Ongoing exploration results like these continue to support our belief that the resource expansion potential at Karma is exceptional."

North Kao was a blind discovery in 2013 and now has an inferred mineral resource of 1.66 million ounces (47.8 million tonnes at an average grade of 1.08 g/t gold), TrueGold pointed out.

The Karma feasibility released in December calls for a $130 million mine at Karma which is 90%-owned by TrueGold with the Burkina Faso government holding the remainder. Karma’s probable reserves are pegged at 949,000 ounces (33.2mt at 0.89 g/t) and the operation could produce 97,000 ounces on average annually for 8.5 years starting end-2015.

What makes Karma stand out are all-in sustaining costs of $720 and direct cash costs of $591 thanks to shallow pits and proposed heap-leach extraction and what the company characterizes as “strong gold grades, excellent infrastructure, low power and water requirements, strong recoveries from simple metallurgy and soft, free digging material.”

TrueGold also owns 100% of the Liguidi gold project in Burkina Faso.

Burkina Faso with a population of 16 million people, is the continent's fourth largest gold producer after Mali and has commissioned eight new mines over the past six years.