Shares in Roxgold Inc (CVE:ROG) held onto recent gains on Tuesday after the company announced construction has gotten underway at its ultra-high grade Yaramoko project in Burkina Faso.
The Toronto-based junior was changing hands at $0.60, up more than 9% on the Toronto Venture Exchange over the past month, but some 7.7% lower than a year ago following political upheavals in Burkina Faso.
The $195 million company said bulk earthwork at the 190 person camp at the underground mine in West Africa includes work on tailing and water storage facility as well as roads infrastructure.
The portal to access the deposit should be completed this quarter while the first gold pour Yaramoko is expected in the second quarter last year. The underground mine will produce 99,500 ounces on average annually for an initial 7.4 years.
Roxgold announced Yaramoko capex was upped from $106 million in the 2014 feasibility study to nearly $111 million (of which $10 million has already been spent), still at the bottom 5% of African gold projects. The company has cash on hand of $30 million and a $75 million debt facility from French banks.
The capex increase is due to scope changes which include the adoption of a plastic liner for the project’s tailings storage facility, which was a new requirement outlined by Burkina Faso’s environmental permitting authority. In addition, the SAG mill and associated equipment were upsized to facilitate a future expansion of the processing plant’s capacity and the backup (diesel) power station capacity was also increased, which will provide Yaramoko with full standby capability in support of the grid connected power line.