Name and Location
Karma gold project, Burkina Faso.

Client
True Gold Mining.

Project Description
The feasibility study completed on the Karma project supports a heap-leach mine scenario from currently defined openpit deposits containing 949 000 oz of probable mineral reserves.

The heap-leach pad is designed to process oxide and transition ore from the five shallow pits, with a small amount of leachable sulphide ore extracted from two pits.

The two pits with the highest-grade mineral reserves will be mined first, allowing for rapid payback and strong cash flow from the outset of commercial production.

About 113.8-million tonnes of material will be mined from the five openpits over the course of the estimated project life. This will deliver an estimated 33.2-million tonnes of ore to the process facility and 80.6-million tonnes of waste to storage facilities located near each pit. The overall strip ratio for the project is 2.43:1, with mining being conducted 350 days a year by an owner-operated fleet at total material movement rates ranging from 35 000 t/d to 45 000 t/d.

Conventional truck and shovel methods are likely to be used. Two 200 t hydraulic excavators, configured in backhoe mode, will load a fleet of ten 90 t trucks for the transport of ore and waste to the primary crusher and respective near-pit waste dumps.

Four additional 90 t trucks will deliver ore directly from the pits to the process facilities without the need for ore rehandling.

The soft nature of the openpit ore and waste material will allow for free-digging (excavated without blasting) of the bulk of the material.

Twenty-five per cent of the transition ore and all the sulphide ore material will be drilled and blasted at low powder factors. This comprises only about 10% of the total material to be excavated over the mine life.

The Karma project’s process design is based on the use of conventional heap-leach technology, with a production capacity of four-million tonnes a year. Mined ore will be crushed, agglomerated and conveyed to the leach pad, where it will be stacked in two 10 m lifts and irrigated with a dilute cyanide solution. Gold dissolved by the cyanide will then be adsorbed onto activated carbon in a carbon-in-column circuit. The loaded carbon is then stripped of the gold using Zadra-type elution and the resulting product will be subjected to electrowinning and smelting to produce doré on site.

The mine will produce an average of 97 000 oz/y of gold over a mine life of 8.5 years.

Value
The project requires initial capital of $131.5-million, including on-site working capital and contingency, to support the construction of a mine and associated facilities, with a process capacity of four-million tonnes a year.

Franco-Nevada and Sandstorm Gold have entered into a $120-million stream financing agreement with True Gold Mining to assist in funding the construction of the Karma project.

Duration
The implementation schedule will be carried out over 18 months, with prestripping beginning 12 months prior to the first gold pour, which is expected at the end of 2015.

Latest Developments
True Gold has been closely monitoring the changing landscape in Burkina Faso, particularly near its project area, over the past six weeks, developing a clearer understanding of certain perceptions and concerns of communities affected by its Karma gold project.

On January 14, the Vancouver-based miner experienced an impromptu protest that damaged certain property and assets, while in December the miner temporarily halted part of the construction activities at the project owing to a "disturbance" in a local community.

The company is taking steps to refocus its efforts in Burkina Faso by re-engaging with the local community to tackle concerns and put Karma in a position to move forward.

“We are making progress, but the state of affairs in Burkina Faso remains fluid as we reconcile a number of competing interests within some of the nearby villages.”

True Gold will continue to liaise with government and representatives of the local community to gain additional clarity on the local concerns and the instability affecting the country's mining industry and economy.

Given the current situation, the company has noted that it is not able to provide a definitive update on any potential impact recent unrest could have on the project timeline.

It is, however, working to compile information to provide such an update “as expeditiously as possible”.

Meanwhile, Karma has stressed that all its employees are safe and the sites and property are secure, following the protest earlier this month.

The company says that owing to the protest certain equipment, supplies and one office building suffered varying degrees of damage, the extent of which it is assessing. True Gold is working with consultants and suppliers to ascertain the value of the damage. Based on available information, it is currently estimated that the cost associated with the damage is in the range of $4-million to $8-million.

True Gold carries several insurance policies and is working with its insurance providers to formally assess the quantum and coverage.

The company is actively working with its operations team and principal contractor Senet on a plan to mitigate any project delays.

Key Contracts and Suppliers
Senet (barrage construction, detailed engineering and construction-level design work).

On Budget and on Time?
To date, all aspects of the project are on time and within budget.

Contact Details for Project Information
True Gold Mining, tel +1 604 801 5020 or email info@truegoldmining.com.