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Semafo: Pit Wall Failure at Mana in Wona Pit in Burkina Faso

Semafo Inc. reports that there was a pit wall failure at Mana in the Wona pit. No mining was underway in the area, and no-one was injured.

 

Event

A pit wall failure occurred on Friday, and the team has been working diligently on assessing the impact. The incident took place in the northern part of the Wona pit where there is no active mining. No-one was injured, and no equipment was damaged.

Currently, Semafo is mining in the southern part of Wona pit. However, under the 2019 mine plan, some 45,000 ounces were expected from the northern portion of the pit between late August and year-end. To mine securely and regain access to ore in Wona North, Semafo will have to push back the pit wall and mine approximately 6 million tonnes of waste material. As a result, mining of ore in the northern part of the pit will be deferred until the first quarter of 2020. These 6 million tonnes were part of the life of mine plan in 2021 and therefore do not represent additional tonnes or cost.

After evaluating multiple scenarios to compensate for the ore from Wona North in 2019, Semafo established that there would be insufficient ore to feed the mill for approximately ten weeks. Semafo now expects to suspend the processing of ore at Mana between mid-August and end of October.

The mining plan for the Siou pit remains unchanged: Development of Siou open pit is ongoing with ore expected in the fourth quarter; and development of Siou underground is proceeding on time and on budget.

In addition to ongoing geotechnical assessment, Semafo conducts yearly independent geotechnical reviews in conjunction with Golder Associates that include pit slope parameters. Safety will remain Semafo's top priority as it conducts a full analysis to ensure continued stability of our mining operations.

2019 Guidance

Semafo estimates the impact at Mana to be approximately 40,000 – 50,000 ounces of lower production than originally contemplated. Therefore, annual guidance at Mana has been revised to 130,000 – 140,000 from the original 170,000 – 190,000 ounces. There is no change to our Mana all-in sustaining cost (AISC) guidance. During the shutdown, mining costs of approximately $22 million for Siou and Wona will be capitalized in development and there will be a non-recurring charge of approximately $7 million mostly representing fixed costs for the period.

Boungou guidance remains unchanged at between 220,000 and 240,000 ounces of gold at an AISC of between $470 and $510 per ounce.

Full second-quarter results will be released on August 6 after market close. Production at Mana for the first half of the year totaled 77,500 ounces, in line with the budget. In the second half of the year, Semafo estimates that Mana production will be split 25%/75% between the third and fourth quarters.

The second-quarter 2019 conference call is scheduled at 10 am EDT on August 7.

About Semafo

Semafo is a Canadian-based intermediate gold producer with over twenty years’ experience building and operating mines in West Africa. The Corporation operates two mines, the Boungou and Mana Mines in Burkina Faso. Semafo is committed to building value through responsible mining of its quality assets and leveraging its development pipeline.

Source: Semafo

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