TSX: ASO
AIM: ASO
TORONTO, Jan. 24, 2018 /CNW/ - Avesoro Resources Inc.
("Avesoro" or the "Company"), the TSX and AIM listed West African
gold producer, is pleased to announce consolidated annual
production guidance for 2018 and to provide an update on initial
results from the 2017 exploration activities.
Highlights
- Gold production is expected to be between 220,000 and 240,000
ounces in 2018 representing a 15 to 25% increase on 2017 production
from the Company's mines.
- 2018 financial budget extracts:
-
- Operating cash cost (per ounce produced)1:
US$620 to US$660;
- All-in sustaining cost (per ounce sold)1:
US$960 to US$1,000;
- Sustaining capital expenditure: US$65
million to US$75 million,
including US$35 million of waste
stripping;
- Repayment of US$26 million of
project finance loans; and
- Exploration allocated US$25
million with eight diamond drill rigs currently active
across licence portfolio, increasing to 24 drill rigs for
171,000m 2018 drill programme.
- Significant additional ounces delineated by drilling along
strike from current mining operations at the Youga Gold Mine.
Serhan Umurhan, Chief Executive Officer of Avesoro,
commented:
"We begin 2018 well positioned to continue to increase gold
production levels and to further reduce operating costs at our New
Liberty, Youga and Balogo Gold Mines. This year, we look to build
upon the operational turnaround achieved at New Liberty and to
deliver further growth throughout 2018, with forecast gold
production of 220,000 to 240,000 ounces at an operating cash cost
of US$620 to US$660 per ounce of gold produced.
I am very encouraged by the exciting exploration results we
encountered during our 2017 exploration campaign in Burkina Faso, in particular at Youga, where we
have identified significant additional ounces at Gassore along
strike from existing pits, and in close proximity to the processing
plant. These additional ounces now fall within our mining plan,
thereby providing us with the confidence to increase our 2018 gold
production guidance at Youga above that forecast in the 2017
published life of mine plan.
Investment in exploration is a key focus of our 2018 growth
strategy following the success of last years focused exploration
activities, and I am pleased to announce an exploration budget for
2018 of US$25 million that will see
24 diamond drill rigs operating across the Company's licence
portfolio by Q3 2018.
I look forward to updating the market on the progress of our
comprehensive 2018 drilling campaign and to announcing an updated
Mineral Resource statement later this year, which already stands at
a healthy 2.3 Moz grading 2.2g/t Au".
2018 Operational Outlook
New Liberty Gold Mine,
Liberia ("New Liberty")
- Gold production is expected to increase by 45 to 58% to between
110,000 and 120,000 ounces in 2018 compared to 76,179 ounces in
2017;
- Operating cash costs are expected to decrease to between
US$630 and US$670 per ounce produced;
- AISC is expected to decrease to between US$1,020 and US$1,060 per ounce produced; and
- US$45 million to US$50 million of sustaining capital expenditure
is planned for 2018 including US$33
million of waste stripping.
Youga and Balogo Gold Mines, Burkina Faso ("Youga" and "Balogo")
- Gold production is expected to be between 110,000 and 120,000
ounces in 2018 compared to 115,894 ounces in 2017;
- Operating cash costs per ounce produced are expected to be
between US$540 to US$580;
- AISC is expected to be between US$805 to US$845
per ounce produced; and
- US$20 million to US$25 million of sustaining capital expenditure
is planned for 2018.
Exploration
- Board approved exploration budget of US$25 million for 2018 with eight diamond drill
rigs currently mobilised across the licence portfolio;
- The Company expects to complete 171,000 metres of diamond
drilling during 2018;
- The Company's drilling contractor has placed an order for an
additional 16 new diamond drill rigs, of which four are currently
enroute to Burkina Faso and
expected to be operational by late February
2018;
- The remaining 12 drill rigs will be mobilized during Q2 and Q3
2018 with six rigs being allocated to Liberia and six rigs to Burkina Faso; and
- The drilling contractor, which is a related party to the
Company, is able to provide a very attractive drilling rate of
between US$40 and US$85 per metre for HQ Diamond drilling.
Update on 2017 Exploration Activities
Liberia
Throughout 2017, the Company's exploration team undertook a
comprehensive review of all previously identified exploration
targets and conducted additional geological and geochemical work
around previously identified gold in soil anomalies.
In Q4 2017, the Company commenced a 14,000 metre on-mine infill
drilling programme, with the aim of increasing the confidence in
the continuity of the New Liberty ore body and to upgrade the
classification of a proportion of Inferred Mineral Resource in the
NI 43-101 compliant Technical Report dated November 1, 2017 to an Indicated Mineral
Resource. To date, 29 holes for 12,000 metres have been completed,
with assay results currently pending.
Burkina Faso
Throughout H2 2017, the Company conducted drilling campaigns on
several targets across the Youga and Balogo licences.
At Youga, a 52,000 metre near-mine diamond drilling campaign was
completed in 2017 with particular focus on the Gassore prospect
which is located along strike from the existing mine operations. To
date, drilling has intersected mineralization over a strike length
of 650 metres along a 2.6 km mineralized trend, testing to a
vertical depth of 100 metres, with the average width of the
mineralization intersected being 1.34 metres (drilled width) at an
average grade of 8.40 g/t Au.
Details relating to the latest drilling results are illustrated
in the following diagram:
http://avesoro.com/wp-content/uploads/2018/01/Youga_General_v1.2.jpg
Key intercepts from the near-mine drilling programme are
reported below:
Target
|
Hole
ID
|
From
(m)
|
To
(m)
|
Width*
(m)
|
Au
g/t
|
Comment
|
Gassore
|
GASS-17-072
|
110.00
|
110.75
|
0.75
|
231.00
|
|
Gassore
|
GASS-17-001
|
38.90
|
45.30
|
6.40
|
19.54
|
including 4.60 m @
26.46 g/t
& 1.00 m @ 59.50
g/t
|
Gassore
|
GASS-17-067
|
95.75
|
100.50
|
4.75
|
14.74
|
including 1.75m @
26.88 g/t
|
Gassore
|
GASS-17-070
|
53.20
|
56.85
|
3.65
|
15.02
|
including 0.90 m @
50.40 g/t
|
Gassore
|
GASS-17-179
|
63.15
|
65.25
|
2.10
|
19.45
|
including 0.90 m @
38.70 g/t
|
Gassore
|
GASS-17-036
|
21.90
|
25.50
|
3.60
|
9.74
|
including 1.50 m @
20.40 g/t
|
Gassore
|
GASS-17-082
|
84.45
|
85.35
|
0.90
|
28.60
|
|
Gassore
|
GASS-17-013
|
21.85
|
25.95
|
4.10
|
5.40
|
|
Gassore
|
GASS-17-126
|
70.30
|
73.15
|
2.85
|
7.44
|
including 0.90 m @
21.7 g/t
|
Gassore
|
GASS-17-106
|
9.00
|
11.40
|
2.40
|
8.54
|
including 1.60 m @
9.64 g/t
|
Gassore
|
GASS-17-106
|
46.50
|
47.90
|
1.40
|
13.65
|
|
Gassore
|
GASS-17-103
|
118.55
|
123.25
|
4.7
|
4.05
|
including 0.95 m @
11.75 g/t
|
Gassore
|
GASS-17-003
|
27.95
|
31
|
3.05
|
6.20
|
|
Gassore
|
GASS-17-107
|
102.00
|
104.6
|
2.60
|
7.05
|
including 1.00 m @
16.15 g/t
|
Gassore
|
GASS-17-139
|
90.00
|
91.00
|
1.00
|
14.35
|
|
Mid Pit
|
YNE-17-116
|
112.00
|
115.65
|
3.65
|
35.45
|
including 0.90 m @
138.00 g/t
|
Mid Pit
|
YNE-17-112
|
100.45
|
104.85
|
4.40
|
15.32
|
including 0.85 m @
51.80 g/t
|
Mid Pit
|
YNE-17-114
|
107.80
|
114.00
|
6.20
|
8.55
|
including 1.20 m @
39.70 g/t
|
* Drilled widths; it
is estimated that true width will be approximately 92% of the
reported drill intercept width.
A full set of drill
results will be made available on our website at
www.Avesoro.com
|
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
Notes:
1 Non-GAAP Financial Measures: The Company has
included certain non-GAAP financial measures in this press release,
including operating cash costs and all-in sustaining costs ("AISC")
per ounce of gold produced. These non-GAAP financial measures do
not have any standardised meaning. Accordingly, these financial
measures are intended to provide additional information and should
not be considered in isolation or as a substitute for measures of
performance prepared in accordance with International Financial
Reporting Standards ("IFRS").
Operating cash costs and all-in-sustaining cash costs are a
common financial performance measure in the mining industry but
have no standard definition under IFRS. Operating cash costs are
reflective of the cost of production and include a net-smelter
royalty.
AISC include operating cash costs, corporate costs, sustaining
capital expenditure, sustaining exploration expenditure and
capitalised stripping costs.
About Avesoro Resources Inc.
Avesoro Resources is a West
Africa focused gold producer and development company that
operates three gold mines across West
Africa and is listed on the Toronto Stock Exchange ("TSX")
and the AIM market operated by the London Stock Exchange ("AIM").
The Company's assets include the New Liberty Gold Mine in
Liberia (the "New Liberty Gold
Mine" or "New Liberty") and the Youga and Balogo Gold mines in
Burkina Faso ("Youga" and
"Balogo").
New Liberty has an estimated proven and probable mineral reserve
of 7.4Mt with 717,000 ounces of gold grading 3.03g/t and an
estimated measured and indicated mineral resource of 9.6Mt with
985,000 ounces of gold grading 3.2g/t and an estimated inferred
mineral resource of 6.4Mt with 620,000 ounces of gold grading
3.0g/t. The foregoing Mineral Reserve and Mineral Resource
estimates and additional information in connection therewith is set
out in an NI 43-101 compliant Technical Report dated November 1, 2017 and entitled "New Liberty Gold
Mine, Bea Mountain Mining Licence Southern Block, Liberia, West
Africa" and is available on SEDAR at www.sedar.com.
Youga and Balogo have a combined estimated proven and probable
mineral reserve of 9.3Mt with 513,000 ounces of gold grading 1.7g/t
and a combined estimated indicated mineral resource of 16.05Mt with
801,600 ounces of gold grading 1.55g/t and a combined inferred
mineral resource of 13Mt with 655,000 ounces of gold grading
1.57g/t. The foregoing Mineral Reserve and Mineral Resource
estimates and additional information in connection therewith is set
out in two NI 43-101 compliant Technical Reports, dated
June 16, 2017 entitled "Mineral
Resource and Mineral Reserve Update for the Balogo Project" and
dated June 19, 2017 and entitled
"Mineral Resource and Mineral Reserve Update for the Youga and
Ouaré Projects" and are available on SEDAR at www.sedar.com.
For more information, please visit www.avesoro.com
Qualified Persons
The Company's Qualified Person is Mark
J. Pryor, who holds a BSc (Hons) in Geology & Mineralogy
from Aberdeen University, United Kingdom and is a Fellow of the
Geological Society of London, a
Fellow of the Society of Economic Geologists and a registered
Professional Natural Scientist (Pr.Sci.Nat) of the South African
Council for Natural Scientific Professions. Mark Pryor is an independent technical
consultant with over 25 years of global experience in exploration,
mining and mine development and is a "Qualified Person" as defined
in National Instrument 43 -101 "Standards of Disclosure for Mineral
Projects" of the Canadian Securities Administrators and has
reviewed and approved the scientific and technical disclosures
contained in this announcement.
Forward Looking Statements
Certain information contained in this announcement constitutes
forward looking information or forward looking statements with the
meaning of applicable securities laws. This information or
statements may relate to future events, facts, or circumstances or
the Company's future financial or operating performance or other
future events or circumstances. All information other than
historical fact is forward looking information and involves known
and unknown risks, uncertainties and other factors which may cause
the actual results or performance to be materially different from
any future results, performance, events or circumstances expressed
or implied by such forward-looking statements or information. Such
statements can be identified by the use of words such as
"anticipate", "plan", "continue", "estimate", "expect", "may",
"will", "would", "project", "should", "believe", "target",
"predict" and "potential". No assurance can be given that this
information will prove to be correct and such forward looking
information included in this announcement should not be unduly
relied upon. Forward looking information and statements speaks only
as of the date of this announcement.
Forward looking statements or information in this announcement
include, among other things, statements regarding 2018 gold
production of between 220,000 - 240,000 ounces; statements
regarding 2018 operating cash costs (per ounce produced) of between
US$620 - US$660 per ounce; statements regarding 2018
all-in sustaining costs (per ounce sold) of between US$960 - US$1,000
per ounce; statements regarding 2018 sustaining capital expenditure
of US$65 million - US$75 million, including US$35 million of waste stripping; statements
regarding the repayment of US$26
million of the project finance loan facility; and statements
regarding the allocation of US$25
million to exploration with eight diamond drill rigs
increasing to 24 drill rigs for 171,000m in 2018, and statements regarding each
of the foregoing for the Company's New Liberty, Youga and Balogo
mines.
In making the forward looking information or statements
contained in this announcement, assumptions have been made
regarding, among other things: general business, economic and
mining industry conditions; interest rates and foreign exchange
rates; the availability and reliability of infrastructure and
processing facilities; the continuing accuracy of Mineral Resource
and Reserve estimates; geological and metallurgical conditions
(including with respect to the size, grade and recoverability of
Mineral Resources and Reserves) and cost estimates on which the
Mineral Resource and Reserve estimates are based; the supply and
demand for commodities and precious and base metals and the level
and volatility of the prices of gold; market competition; the
ability of the Company to raise sufficient funds from capital
markets and/or debt to meet its future obligations and planned
activities and that unforeseen events do not impact the ability of
the Company to use existing funds to fund future plans and projects
as currently contemplated; the stability and predictability of the
political environments and legal and regulatory frameworks
including with respect to, among other things, the ability of the
Company to obtain, maintain, renew and/or extend required permits,
licences, authorizations and/or approvals from the appropriate
regulatory authorities; that contractual counterparties perform as
agreed; and the ability of the Company to continue to obtain
qualified staff and equipment in a timely and cost-efficient manner
to meet its demand.
Actual results could differ materially from those anticipated in
the forward looking information or statements contained in this
announcement as a result of risks and uncertainties (both foreseen
and unforeseen), and should not be read as guarantees of future
performance or results, and will not necessarily be accurate
indicators of whether or not such results will be achieved. These
risks and uncertainties include the risks normally incidental to
exploration and development of mineral projects and the conduct of
mining operations (including exploration failure, cost overruns or
increases, and operational difficulties resulting from plant or
equipment failure, among others); the inability of the Company to
obtain required financing when needed and/or on acceptable terms or
at all; risks related to operating in West Africa, including potentially more
limited infrastructure and/or less developed legal and regulatory
regimes; health risks associated with the mining workforce in
West Africa; risks related to the
Company's title to its mineral properties; the risk of adverse
changes in commodity prices; the risk that the Company's
exploration for and development of mineral deposits may not be
successful; the inability of the Company to obtain, maintain, renew
and/or extend required licences, permits, authorizations and/or
approvals from the appropriate regulatory authorities and other
risks relating to the legal and regulatory frameworks in
jurisdictions where the Company operates, including adverse or
arbitrary changes in applicable laws or regulations or in their
enforcement; competitive conditions in the mineral exploration and
mining industry; risks related to obtaining insurance or adequate
levels of insurance for the Company's operations; that Mineral
Resource and Reserve estimates are only estimates and actual metal
produced may be less than estimated in a Mineral Resource or
Reserve estimate; the risk that the Company will be unable to
delineate additional Mineral Resources; risks related to
environmental regulations and cost of compliance, as well as costs
associated with possible breaches of such regulations;
uncertainties in the interpretation of results from drilling; risks
related to the tax residency of the Company; the possibility that
future exploration, development or mining results will not be
consistent with expectations; the risk of delays in construction
resulting from, among others, the failure to obtain materials in a
timely manner or on a delayed schedule; inflation pressures which
may increase the cost of production or of consumables beyond what
is estimated in studies and forecasts; changes in exchange and
interest rates; risks related to the activities of artisanal
miners, whose activities could delay or hinder exploration or
mining operations; the risk that third parties to contracts may not
perform as contracted or may breach their agreements; the risk that
plant, equipment or labour may not be available at a reasonable
cost or at all, or cease to be available, or in the case of labour,
may undertake strike or other labour actions; the inability to
attract and retain key management and personnel; and the risk of
political uncertainty, terrorism, civil strife, or war in the
jurisdictions in which the Company operates, or in neighbouring
jurisdictions which could impact on the Company's exploration,
development and operating activities.
This announcement also contains Mineral Resource and Mineral
Reserve estimates. Information relating to Mineral Resource and
Mineral Reserve contained in this announcement is considered
forward looking information in nature, as such estimates are
estimates only, and that involve the implied assessment of the
amount of minerals that may be economically extracted in a given
area based on certain judgments and assumptions made by qualified
persons, including the future economic viability of the deposit
based on, among other things, future estimates of commodity prices.
Such estimates are expressions of judgment and opinion based on the
knowledge, mining experience, analysis of drilling results and
industry practices of the qualified persons making the estimate.
Valid estimates made at a given time may significantly change when
new information becomes available, and may have to change as a
result of numerous factors, including changes in the prevailing
price of gold. By their nature, Mineral Resource and Mineral
Reserve estimates are imprecise and depend, to a certain extent,
upon statistical inferences which may ultimately prove unreliable.
If such Mineral Resource and Mineral Reserve estimates are
inaccurate or are reduced in the future (including through changes
in grade or tonnage), this could have a material adverse impact on
the Company and its operating and financial performance. Mineral
resources that are not mineral reserves do not have demonstrated
economic viability. Due to the uncertainty that may be attached to
inferred mineral resources, it cannot be assumed that all or any
part of an inferred mineral resource will be upgraded to an
indicated or measured mineral resource as a result of continued
exploration.
Although the forward-looking statements contained in this
announcement are based upon what management believes are reasonable
assumptions, the Company cannot provide assurance that actual
results or performance will be consistent with these
forward-looking statements. The forward looking information and
statements included in this announcement are expressly qualified by
this cautionary statement and are made only as of the date of this
announcement. The Company does not undertake any obligation to
publicly update or revise any forward looking information except as
required by applicable securities laws.
Technical Glossary
Au
|
Chemical symbol for
gold
|
Assay
|
The analysis of
minerals, rocks and mine products to determine and quantify their
constituent parts
|
Cut-off
Grade
|
The lowest grade
value that is included in a resource statement
|
CIM
|
Canadian Institute of
Mining, Metallurgy and Petroleum
|
Diamond
Drilling
|
Drilling method which
obtains a cylindrical core of rock by drilling with an annular bit
impregnated with diamonds
|
Grade
|
The proportion of a
mineral within a rock or other material. For gold mineralisation
this is usually reported as grams of gold per tonne of rock
(g/t)
|
g/t
|
Grammes per
tonne
|
Indicated Mineral
Resource
|
That part of a
mineral resource for which tonnage, densities, shape, physical
characteristics, grade and mineral content can be estimated with a
reasonable level of confidence. It is based on exploration,
sampling and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits,
workings and drill holes. The locations are too widely or
inappropriately spaced to confirm geological and/or grade
continuity but are spaced closely enough for continuity to be
assumed
|
Inferred Mineral
Resource
|
That part of a
mineral resource for which tonnage, grade and mineral content can
be estimated with a low level of confidence. It is inferred from
geological evidence and assumed but not verified geological and/or
grade continuity. It is based on information gathered through
appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes that may be limited, or of uncertain
quality and reliability
|
koz
|
Thousand troy
ounces
|
km
|
Kilometre
|
km2
|
Square
Kilometres
|
kt
|
Thousand tonnes
(1,000 tonnes)
|
Life of
Mine
|
The time in which,
through the employment of the available capital, the ore
reserves--or such reasonable extension of the ore reserves as
conservative geological analysis may justify--will be
extracted.
|
m
|
metre
|
Mineral
Resource
|
A concentration or
occurrence of material of economic interest in or on the Earth's
crust in such a form, quality, and quantity that there are
reasonable and realistic prospects for eventual economic
extraction. The location, quantity, grade, continuity and other
geological characteristics of a Mineral Resource are known,
estimated from specific geological knowledge, or interpreted from a
well constrained and portrayed geological model
|
Measured
Resource
|
That part of a
Mineral Resource for which tonnage, densities, shape, physical
characteristics, grade and mineral content can be estimated with a
high level of confidence. It is based on detailed and reliable
exploration, sampling and testing information gathered through
appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes. The locations are spaced
closely enough to confirm geological and grade
continuity
|
Moz
|
Million troy
ounces
|
Mt
|
Million
tonnes
|
NPV
|
Net Present Value is
a standard method in finance of capital budgeting-the planning of
long-term investments; using the NPV method a potential investment
project should be undertaken if the present value of all cash
inflows minus the present value of all cash outflows (which equals
the net present value) is greater than zero
|
Open Pit
|
A surface
mine
|
Orebody
|
Mining term to define
a solid mass of mineralised rock which can be mined profitably under
current or immediately foreseeable economic conditions "ore" a
mineral deposit that can be extracted and marketed
profitably
|
Ore
Reserves
|
The economically
mineable part of a Measured or Indicated Mineral Resource
demonstrated by at least a Preliminary Feasibility Study. This
Study must include adequate information on mining, processing,
metallurgical, economic and other relevant factors that
demonstrate, at the time of reporting, that economic extraction can
be justified. A Mineral Reserve includes diluting materials and
allowances for losses that may occur when the material is
mined
|
Ounce / oz
|
Troy ounce,
equivalent to 31.103477 grams
|
Probable Mineral
Reserve
|
The economically
mineable part of an Indicated and, in some circumstances, a
Measured Mineral Resource demonstrated by at least a Preliminary
Feasibility Study. This Study must include adequate information on
mining, processing, metallurgical, economic, and other relevant
factors that demonstrate, at the time of reporting, that economic
extraction can be justified
|
Proven Mineral
Reserve
|
The economically
mineable part of a Measured Mineral Resource demonstrated by at
least a Preliminary Feasibility Study. This Study must include
adequate information on mining, processing, metallurgical,
economic, and other relevant factors that demonstrate, at the time
of reporting, that economic extraction is justified
|
t
|
Tonne (1 million
grams)
|
SOURCE Avesoro Resources Inc.