SEMAFO Inc T.SMF announced February 21 that its 2012 year end resource estimate will include (based on a gold cutoff of 1 gram per tonne within a $1,600-gold pitshell) 999,200 inferred gold ounces (6.7 million tonnes grading 4.62 g/t) from the newly-discovered Siou sector, located approximately 15 kilometres from its Mana processing plant in Burkina Faso.
SEMAFO President/CEO Benoit Desormeaux spoke to Kevin Michael Grace February 21.
RW: 6.7 million tonnes at 4.62 grams per tonne—that’s high grade and quite a significant addition to your resource.
BD: It’s the best discovery we’ve had on the property so far. It’s even bigger than what we had when we decided to build the project and the plant in 2007. When you look at the sensitivity analysis that we’ve provided in the release, we gave the inferred resource at $1,600, but gold at $1,300 affects only 1% of the ounces, and that really shows that the project is very robust.
RW: This will go into production in 2014?
BD: That’s our goal, and it’s a priority. We’re aiming to bring this into reserves in the third quarter. Then, hopefully, we will have all the permits to mine it by the end of 2014 or beginning of 2015.
RW: This is quite an endorsement of your investment in Mana.
BD: Definitely, and it demonstrates the validity of our decision to fast-track Siou. It is our best discovery so far, but you have to keep in mind that we’ve made discoveries every year since 2010. We discovered Fofina in 2010, Yaho in 2011, and in 2012, Siou was the best one with the best recovery rate. And we’re still within a 20-kilometre radius from the plant. This is where we are going to focus our exploration because we’ve proven that a discovery can be transformed into cashflow within two to three years.
RW: What are your future drilling plans for Siou?
BD: We’re going to redo the spacing. We’re now at 50 metres by 50 metres, and we’ll go down to 25 metres by 25 metres in order to add to reserves in the third quarter. We’ll also drill the extensions because there can be some continuity on the lateral extension, and it’s still open at depth. Siou is located on a 30-kilometre trend that we call Kokoi. It is our first priority in exploration to seek other zones like that on Kokoi that are still within 20 kilometres from the plant.
RW: When Siou goes into production, how will that affect your production profile and profitability?
BD: It will increase production because we will be replacing 2 g/t with something like 4.5 g/t. The production profile will be determined by the quantity of ore we can bring from Siou, but we don’t know yet what percentage of the mill feed that will be. If we can get 2,000 tonnes a day from Siou, that would be great. We will maximize this as much as we can because since it’s high grade it will be low cost.