Teranga Gold Corporation has announced the results of an updated mineral reserve estimate and feasibility study for the Wahgnion development project in Burkina Faso, West Africa. Teranga, which also owns the Sabodala gold mine in Senegal, is listed on the TSX.

Wahgnion Panorama

Panoramic view of the Wahgnion site (photo: Teranga).

The update adds 450 000 ounces to open-pit reserves, increasing proven and probable mineral reserves at Wahgnion by almost 40 % to 1,61 million ounces (31,07 million ore tonnes grading 1,61 g/t). The initial proven and probable mineral reserves in the 2017 feasibility study totalled 1,16 million ounces (21,40 million ore tonnes grading 1,69 g/t). The new mineral resource and mineral reserve estimates, based on the initial four deposits (Nogbele, Fourkoura, Samavogo and Stinger), include drill results from a 73 000-m infill drill programme completed in 2017.

“The 40 % increase in Wahgnion reserves announced today (24 Sept) exceeded our initial guidance and expectations and, most importantly, led to an improved five and 10-year production and cash flow profile relative to last year’s initial feasibility study,” stated Richard Young, Teranga’s President and CEO. “With average annual gold production of 132 000 ounces through to 2024, Wahgnion is expected to increase company-wide annual production by 50 % to between 300 000 and 350 000 ounces. This will generate free cash flow to fund our growth plans, and move us closer towards our goal of becoming a multi-asset, mid-tier gold producer in West Africa.”

Construction at the fully funded Wahgnion development project remains on track. Front-end engineering and detailed design is essentially complete, and the steel fabrication and equipment manufacture in preparation for delivery to site are on schedule. Despite a heavy rainy season, the concrete pour schedule for plant construction remains on schedule for the mill foundations, primary crusher, leach tanks and reclaim areas in preparation for the next phase of construction, mechanical and structural steel erection.

Mining activities have commenced to construct a tailings management facility and to produce a large ore inventory ahead of plant commissioning. Staffing for operations has been progressing well with significant focus on the execution of the operations readiness plan. Additionally, community-housing construction is progressing well with the first wave of households successfully relocated.

“The project is running on schedule with the first gold pour expected December 2019,” stated Paul Chawrun, Teranga’s Chief Operating Officer. “The capital budget remains largely in line with the estimates outlined in the initial feasibility study. Half-way through our project commitments and near the end of the rainy season, we are not seeing any material increases other than unfavourable variances for fuel and foreign exchange, which is moderately impacting equipment, labour and material costs. The majority of our project contingency remains.

“We have made great progress at Wahgnion,” he added. “We have materially improved the first five-year cost profile, reducing all-in sustaining costs by US$43 per ounce compared to the previous plan. We have incorporated a high-grade stockpile strategy, similar to Sabodala’s. And, we have extended the mine life to 13 years, delaying the deposits in the mine plan that are not yet fully drilled off.”

The capital cost to construct Wahgnion is estimated at approximately US$240 million and includes provision for a processing plant, infrastructure, an owner operated mining fleet and power plant, owner’s cost, contingency, taxes and duties. This represents an increase of US$8 million compared to the capital cost outlined in the 2017 Technical Report and is due to unfavourable variances with respect to fuel and foreign exchange.