Burkina Bulletin:

A Steady Stream of Gold News Flows From West Africa

 

A poor country rich in gold. That contradiction might someday correct itself if mining can improve life for the people of Burkina Faso. Over the last six years several Canadian companies have explored its potential, among them Riverstone Resources TSXV:RVS. In what’s almost a weekly event, the company announced drill results September 17 from its Karma Gold Project.

 

Assay highlights from the Kao Deposit include:

  • 9.5 grams per tonne gold over 12 metres (including 33.6 g/t over 2 metres)
  • 2.02 g/t over 30 metres (including 2.54 g/t over 18 metres)
  • 2.97 g/t over 14 metres
  • 13.45 g/t over 2 metres
  • 1.73 g/t over 12 metres
  • 3.21 g/t over 6 metres
  • 3.19 g/t over 4 metres

 

True widths are estimated between 90% and 100%. Depths extend to 260 metres, but most were less than 54 metres. The company states that its resource update, scheduled for release later this month, is expected to show an increase in more easily recoverable oxide resources.

 

Karma’s current estimate, issued last January, shows an indicated resource of 54.1 million tonnes grading 1.02 g/t gold for 1.77 million gold ounces and an inferred resource of 37.4 million tonnes grading 0.8 g/t for 959,000 ounces. Over 80% of the resource falls within five Whittle open pit shells. Over 85,000 metres of additional drilling will be incorporated into this month’s update.

 

On September 17 the company also filed the technical report for Karma’s PEA, which was announced last month. The study projects an initial capex of $125 million, which might be cut to $96 million through contract mining. The study also shows a pre-tax net present value of $271 million and a 47% internal rate of return, or an after-tax NPV of $192 million and a 37% IRR. Payback is estimated at two years.

 

The study examined three processing options, favouring a heap leach operation that would process three million tonnes of oxide and transition mineralization annually to produce 70,000 to 90,000 gold ounces a year over a 10-year life. Cash costs would come to $525 an ounce. Calculations are based on a gold price of $1,350 an ounce.

 

Burkina suffered serious unrest following tribal violence in the Mali border region last May. Islamic militants now hold about two-thirds of Mali after taking advantage of the disorder that followed a March 22 military coup. The coup, in turn, was carried out by demoralized soldiers who had been defeated by Tuareg nationalists in northern Mali. Some 200,000 refugees are estimated to have poured into Burkina, Niger and Mauritania during the Tuareg rebellion.

 

Burkina’s border region with Mali and Niger remains under a Canadian government travel advisory due to “armed groups and the threat of banditry and kidnapping. Recent events in Mali have left large parts of that country under the control of Islamist groups with known ties to Al-Qaeda. The possibility of such elements crossing the often porous border with Burkina Faso cannot be discounted.”

 

But despite its proximity to Niger and Mali, the largest of Burkina’s six operating gold mines continues production. IAMGOLD’s TSX:IMG Essakane Mine produced 337,000 gold ounces in 2011 and 30,000 in Q1 2012.

 

Other companies busy in Burkina include Volta Resources TSX:VTR, which released drill results from its Kiaka Gold Property on September 13. Orezone Gold TSX:ORE, which sold Essakane to IAMGOLD in 2008 for $139 million, released assays from its Bomboré Gold Deposit on September 4 and a “world class” resource of 4.13 million ounces measured and indicated, and 1.03 million ounces inferred on August 27...

 

Read the complete article at http://goo.gl/oIaGy.