U.S. Markets open in 1 hr 30 mins

True Gold Announces Positive Feasibility Study for Karma Project

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Dec 17, 2013) -

Editors Note: There is an image associated with this release.

True Gold Mining Inc. (TSX VENTURE:TGM) ("True Gold" or the "Company") is pleased to announce results from an independent Feasibility Study for the Karma Gold Project ("Karma Project") in Burkina Faso, West Africa. The study supports a technically simple open-pit heap leach project that offers low capital and operating costs, rapid payback and strong financial performance at US$1,250/oz gold.

"The Karma Project is an ideal foundation upon which to build a mining company. It is straightforward, financeable, resilient, and has tremendous room to grow. We are delighted to have achieved this important milestone, and feel strongly that our development approach is ideally suited to the attributes of our project," said Mark O'Dea, Executive Chairman, True Gold. "I am very proud of our team for designing a mine plan that honours the characteristics of our deposits. It maximizes profitability, minimizes technical risk and manages both capital and operating costs."


- Gold price: Base case economic evaluation: US$1,250/oz Au
- Probable Mineral Reserves: 33.2 Mt @ 0.89 g/t containing 949,000 oz Au
- Production: 97,000 oz Au/year (average) over an 8.5-year mine life
- Initial CAPEX: US$131.5 million (includes working capital and contingency)
- NPV @ 5% (after tax): US$178.2 million
- IRR (after tax): 43.1%
- Payback (after tax): 1.4 years
- Resilience: 21.3% IRR at US$1,000/oz Au

(The economic highlights throughout this release represent True Gold's effective 90% interest in the Karma Project, after allowing for Burkina Faso's 10% carried interest and all government and contractual royalties. Karma's 100% after-tax project value at a US$1,250/oz gold price is US$200.7 million NPV (5%) and an IRR of 46.0%. All results are reflected on an owner-operator basis.)

"The Karma Project stands out in the world of heap-leach gold development projects. With strong gold grades, excellent infrastructure, low power and water requirements, strong recoveries from simple metallurgy and soft, free digging material, our operating and capital requirements are modest and our margins are high," said Dwayne Melrose, President and CEO, True Gold. "In addition, by design, the Karma Project has been engineered to provide flexibility to scale up and take advantage of the potential to deliver additional ounces as demonstrated by our exploration team's efforts this year. The building blocks for a growth oriented gold producer are in place today, with a proven management team to lead us forward."

The Feasibility Study supports a heap leach mine scenario from currently defined open pit deposits containing 949,000 ounces 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 would be mined first, providing True Gold with the potential for rapid payback and strong cash flow from the outset of commercial production.

The proposed Karma Project implementation schedule is over a period of 18 months with pre-stripping beginning 12 months prior to the first gold pour, which is anticipated at the end of 2015. The project requires initial capital of US$131.5 M (including onsite working capital and contingency) to support the construction of a mine and associated facilities with a process capacity of 4.0 Mtpa. The mine would produce an average of 97,000 ounces of gold per year over 8.5 years, with direct cash operating costs of approximately US$591 per ounce.

It is anticipated that the Karma Project would employ approximately 500 people during construction, and create approximately 300 permanent local jobs during operations along with significant economic benefits in an area of Burkina Faso that has seen little foreign investment.

SENET Pty Ltd. ("SENET") led the Karma Project Feasibility Study, which included input from leading consultants such as P&E Mining Consultants Inc., SRK Consulting, Knight-Piesold (Pty) Ltd., Roche Ltd. Consulting Group, McClelland Laboratories, Inc., and MacCormick International Mining Consultancy.

Base Case Operating Highlights and Project Performance
(US$1,250 per ounce gold)
Financial Analysis
IRR 47.8%
NPV @5% US$226.3M
IRR 43.1%
NPV@5% US$178.2M
Payback 1.4 years
Capital Costs US$M
Pre-production (including working capital and US$8.6M contingency) 131.5
Sustaining 40.0
Total (LOM) 171.5
Operating Costs (Average LOM) US$
Mining ($/t mined) $1.77
Processing ($/t processed) $7.51
General and admin ($/t processed) $1.66
Unit Costs (Average LOM) US$
Direct Cash Operating Costs1 ($/oz) $591
Total Cash Costs2 ($/oz) $672
All-in Sustaining Cash Costs3 ($/oz) $720
1 Includes all mining costs, processing costs, on-site G&A
2 Includes all direct cash operating costs plus refining cost and royalties
3 Includes all total cash costs plus sustaining Capex
Operating Plan
Pre-strip period (yrs) 1.0
Operating life (yrs) 8.5
Mining (days/yr) 350
Process (days/yr) 365
Average mining rate (tpd) 36,000
Average annual mine production (Mt) 12.7
Total material mined (LOM Mt) 113.8
Overall average Strip ratio (W:O) 2.43:1
Process rate (Mtpa) 4.0
Average annual gold production (oz) 97,000
Total gold production (koz) 828
Metallurgical recovery (Av LOM) 87.2
Gold price sensitivity (after-tax US$M)
US$/oz 1,000 1,150 1,200 1,2501 1,300 1,350 1,500
NPV 66.0 128.9 153.5 178.2 195.7 219.7 281.1
IRR (%) 21.3 34.0 38.6 43.1 46.2 50.4 59.8
Payback (years) 2.7 1.8 1.6 1.4 1.3 1.1 0.9
1 Base case
NPV after-tax (US$M)
% -20 -10 01 10 20
Capex (US$) 197.9 192.3 178.2 163.9 149.7
Opex (US$) 235.8 207.0 178.2 148.6 118.3
1 Base case
IRR after-tax (%)
% -20 -10 01 10 20
Capex 56.4 50.2 43.1 37.2 32.2
Opex 51.5 47.4 43.1 38.5 33.4
1 Base case

Study results show that the Karma Project has the potential to remain strongly profitable at lower gold prices as well as at increased prices for key consumables. For example, an increase of 10% in the price of fuel would reduce project NPV by only 7%. Similar increases in the price or consumption of cement or cyanide would result in decreases in project NPV of only 4% or 2% respectively.


Approximately 113.8 Mt of material would be mined from five open pits over the course of the estimated project life. This will deliver approximately 33.2 Mt of ore to the process facility and 80.6 Mt 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/yr by an owner-operated fleet at total material movement rates ranging from 35,000 to 45,000 tpd.

The mining operation is planned to employ conventional truck and shovel methods. Two 200t hydraulic excavators configured in backhoe mode will load a fleet of ten 90t trucks for the transport of ore and waste to the primary crusher and respective near pit waste dumps. Four additional 90t trucks will be employed for overland haulage to deliver ore directly from the pits to the process facilities without the need for ore rehandling.

The soft nature of the open pit ore and waste material will allow the majority to be "free-digging" (excavated without blasting). Twenty-five percent of the transition ore and all of 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.


A comprehensive program of metallurgical testing was executed to support the Feasibility Study. Test work included ore characterization, determination of physical and mechanical properties, bottle roll testing to establish the size-recovery relationship, column leach testing to relate bottle roll results and cyanide solubilities to heap leach performance, and load permeability testing to accurately project cement consumption. A total of 832 metallurgical variability samples and 24 columns were tested as part of the feasibility metallurgical test work program.

The program was undertaken for each material type in each of the five deposits. Overall metallurgical recovery was calculated at 87.2% with recovery by material type for oxide 93.3%, transition 75.7%, and sulphide 83.4%. Average consumption for cement of 14.7 kg/t for all material processed was found to be consistent with a design heap height of 20 m.

Average cyanide consumption for all material types was determined to be 0.58 kg/t. Of particular note are the oxide material's rapid leach kinetics, which indicates gold extraction being substantially complete in a period of 10 days during lab column leach tests with final heap leach recoveries ranging from 90.4% to 95.5%. Figure 1 illustrates column leach performance for the Kao deposit which is typical of all oxide material at the Karma project. Approximately 94% of the mineral reserves at Karma consist of oxide and transition material and exhibit similar leach kinetics.

To view the image associated with this press release, please visit the following link: http://www.marketwire.com/library/20131216-918170i.jpg


The Karma Project process design is based on the use of conventional heap leach technology with a production capacity of 4.0 Mtpa. 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 dilute cyanide solution. Gold dissolved by the cyanide will then be adsorbed onto activated carbon in a carbon-in-column (CIC) 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 dore on site.


The total pre-production capital cost (capex) is estimated at US$131.5 million, inclusive of onsite working capital and an US$8.6 million contingency. The total life of mine capex is US$171.4 million. Initial capital costs include the design and development of plant and mine infrastructure, such as mobile mining equipment, haul roads, transport, leach pad, ADR plant, ponds, and power plant.

Based on the Feasibility Study results, True Gold is confident of the Karma Project's long-term success and plans to invest in an owner-operator development model. An owner-operator scenario that includes purchased equipment imposes slightly higher up-front capital expenditures compared to contract mining but offers lower long-term operating costs, greater operational flexibility and healthier LOM cash flow.

Capital costs

Pre-strip $M 12.2
Mining $M 25.0
Processing plant $M 29.7
Leach pad $M 6.4
Infrastructure $M 19.8
Direct costs $M 93.1
Owner's costs $M 20.6
EPCM $M 9.2
Indirect costs $M 29.8
Contingencies $M 8.6
Total capital costs $M 131.5


Unit and total operating costs were estimated for the Karma Project over the life of the project. Operating costs were developed from first principles for mining, processing, and administration using operating plans as the bases and considering labour, materials, consumables, and certain contract services.

Primary operating cost drivers are diesel fuel ($1.37/L), cement ($240/t), and sodium cyanide ($3300/t). Labour costs were modeled on existing operations in Burkina Faso employing industry standard work schedules while taking into account local labour legislation. Power costs are all based on diesel-generation despite the potential to have grid power in two to three years.

Camp costs are reduced for the Karma Project relative to other projects because most administrative facilities will be in the city of Ouahigouya, which is 23 kilometres from the project, and employees will travel to and from home every day rather than living in a remote camp on site.

Area Unit Cost Units LOM ($ M)
Mining 1.77 $/t mined 185.5
Process 7.51 $/t processed 248.6
Administration 1.66 $/t processed 55.0


As part of the Feasibility Study the previous mineral resource estimates on the Karma Project, detailed in the independent Technical Report titled, "Technical Report and Updated Resource Estimate on the Karma Project, Burkina Faso, West Africa", dated effective October 1, 2012 and filed on SEDAR November 7, 2012, was updated to reflect new engineering data and an updated geological model. The new resource model contains 2.621 million ounces of Indicated mineral resources and 700,000 ounces of Inferred mineral resources within optimized pit shells.

Category Indicated Inferred
Mt Au g/t Au koz Mt Au g/t Au koz
In-Pit (shell-constrained) 75.2 1.08 2,621 17.5 1.25 700
Global Mineral Inventory Sensitivity 82.6 1.04 2,776 28.5 1.05 956
(1) Mineral Resource estimates were based on a gold price of US$1,557 per ounce, a 90%, 80% and 85% respective process recoveries for oxide, transition and sulphide; oxide mining costs of US$1.61/tonne, $US1.94 per tonne for transition and US$2.05 for sulphide ; process costs of US$7.25/tonne for oxide and transition and US$19 per tonne for sulphide; and General & Administrative costs of US$1.35 per tonne were used to determine the respective 0.20, 0.22 and 0.50 oxide, transition and sulphide open pit cut-off grades.
(2) Au grades were estimated in a 5m x 5m x 5m block model (except Rambo at 2.5m x 2.5m x 2.5m blocks) from capped 2.0m composites utilizing inverse distance cubed interpolation. Composites were capped up to 45 g/t depending on the individual mineralized domain.
(3) Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.
(4) The quantity and grade of reported Inferred mineral resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred mineral resources as an Indicated or Measured mineral resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured mineral resource category.
(5) The mineral resources in this press release were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council.
(6) Material within optimized pit shells have engineering mining aspects applied to the global mineral inventory.


Project mineral reserves were derived exclusively from the leachable portion (above the cut-offs listed in the second table below) of the Indicated mineral resource as this represents the lowest cost mineralized material in the Karma Project deposits and has the highest value available for extraction. Mineral reserves were developed using a Lerchs-Grossman pit optimization process; appropriate operating costs, recoveries, and pit slopes; and a gold price of US$1300/oz. Reserves were defined by minable pit designs and incorporate mining losses and dilution.

The Probable mineral reserves were based exclusively on Indicated mineral resources. Inferred mineral resources falling within the pits were treated as waste regardless of its grade. A US$1300/oz gold price was selected because it represented a forward-looking, long-term projection of metal price shared by many financial institutions while providing a resource that performed well even if prices remained low.

Probable Mineral Reserves
Deposit Oxide Transition Sulphide Total
Mt Au
Mt Au
Mt Au
Mt Au
GG1 6.5 0.59 123 4.3 0.64 86 - - - 10.8 0.61 209
GG2 6.1 1.03 200 1.5 1.47 72 - - - 7.6 1.12 272
Kao 9.0 0.89 260 1.9 1.32 80 - - - 10.9 0.96 340
Rambo 0.3 1.85 16 0.3 1.97 22 0.3 2.10 20 0.9 1.98 58
Nami 0.5 0.87 16 1.0 0.62 21 1.5 0.70 33 3.0 0.71 70
Total 22.4 0.85 615 9.0 0.97 280 1.8 0.95 53 33.2 0.89 949

The Probable mineral reserves are 67% oxide, 27% transition, and 6% sulphide on the basis of ore tonnage. Cut-off grades varied by pit and material type. The following table identifies the various cutoff grades used to define the Karma Project Probable mineral reserve.

Karma Project Cut-off Grades by Deposit and Material Type
GG1 GG2 Kao Rambo Nami
Oxide Au g/t 0.19 0.23 0.32 0.20 0.20
Transition Au g/t 0.21 0.26 0.36 0.21 0.21
Sulphide Au g/t - - - 0.22 0.23


The Karma Project mining operation plans to conduct progressive reclamation. A bond will be posted with the Burkina Faso government before the development of each pit. When the waste dump from each pit is fully re-sloped and re-vegetated the bond could be recovered. In this way, the bulk of reclamation will be completed by the time operations conclude.

At closure the heap leach pad will be rinsed, re-sloped, and vegetated; all mobile equipment and facilities removed; and fixed infrastructure such as the barrage, pipeline, water ponds with pumps, and haul roads turned over to the local community. A comprehensive monitoring program including surface water quality, noise, as well as climate and air quality is in place and will remain operational throughout the mine life.

Due to the high proportion of oxide and transition ore in the project mineral reserves, there is little potential for acid rock drainage (ARD).

The project has been designed to meet International Cyanide Management Code (ICMC) standards. The leach pad was sited to take advantage of highly impermeable, naturally-occurring laterite which would limit the effects of a leak if the multiple-layer, liner design were damaged during operation.


The project area hosts a number of scattered villages and two well-established towns are situated at the east end of the project area. The primary occupation in the project area is subsistence farming. Water is an important commodity to the region and True Gold has already constructed phase 1 of the water barrage, which will be accessible by the communities for agricultural use.

The project has been designed to minimize impact on the local population with a 250 m buffer zone established between project infrastructure and nearby communities. The proposed project development plan entails two separate relocations: 1) 35 people at Tang-Zugu in the leach pad area will need to be relocated prior to the start of construction and 2) 400 people in the village of Boulonga will need to be relocated in the second year of operations to permit the development of the Kao Pit.

In addition to the resettlement of these communities, compensation is to be paid for disturbance of 520 ha of farm land in the areas of the barrage, GG2, and Kao. Agreements are in place with the community to govern both resettlement and land compensation.

Artisanal miners are widespread throughout Burkina Faso. Artisanal miners working on the Karma Project sites have, however, been moved away without conflict through dialogue and consultation. One of the project objectives is to provide local residents an alternative to artisanal mining, which often employs practices that are typically unsafe and possibly harmful to the environment.


The proposed project development allows for 18 months for the project execution, which includes mining pre-strip, procurement, transportation, construction and commissioning. Assuming the project execution starts in July of 2014, the first gold production would be expected in December of 2015.
Key project execution schedule milestones include the following:

- Start bulk earthworks month 2
- Start mine pre-strip month 7
- Complete process water storage ponds month 12
- Start ore production month 13
- Start Phase 1 leach pad loading month 17
- Complete process plant construction month 17
- Complete process plant commissioning month 18
- First gold production month 18


The five Karma deposits are to be held within three exploitation (mining) permits: Karma, containing GG1, GG2, and Rambo; Kao, containing the Kao deposit; and Nami, containing the Nami deposit.

An environmental permit was received for Karma in September 2013. This included approval of the project ESIA (Environmental and Social Impact Assessment) and Relocation Action Plan (RAP). A similar permit is pending for Kao. Meanwhile, the recently completed Nami ESIA is expected to be submitted for review in January 2014.

The application for exploitation (mining) permits for Karma and Kao are well advanced. Permits for development of all deposits in the Karma Project are expected to be in hand by the end of Q1 2014. True Gold is already in possession of all permissions required to construct the barrage and water holding ponds.

Once exploitation permits are secured, the terms governing the project over the life of the mine will be set out in a Mining Convention to be signed with the government of Burkina Faso.


True Gold will use the Feasibility Study results to source financing for the construction of the Karma Project. The Karma Project's short payback period and strong early cash flow makes it economically attractive and appealing to lenders. Discussions are under way and advancing with project debt, equity, equipment, and other finance providers to fund the Karma Project through development to production.


The Feasibility Study confirms that the Karma Project is scalable. While the Feasibility Study is based on slightly less than one million ounces of reserves, True Gold's 2013 exploration success in discoveries demonstrated the potential to add open-pit leachable material at the Karma Project for potential mine life extensions or potential incremental throughput. The Feasibility Study does not take into account Karma Project drilling and exploration in 2013 (Kao North, Rambo West and Watinoma). At Kao North, recent drilling extended gold mineralization 2,000 metres from the existing Kao deposit and more than doubled the potential resource footprint at Kao, the Karma Project's largest deposit.


True Gold will host a conference call subsequent to the release of the Feasibility Study results. The call will be hosted by True Gold executives Mark O'Dea, Executive Chairman; Dwayne Melrose, President and CEO; and Peter Carter, Chief Operating Officer. Mr. O'Dea, Mr. Melrose and Mr. Carter will be available to respond to questions following a brief presentation. An operator will direct participants to the call.

Date: December 17, 2013
Time: 7:30 am (Pacific)/ 10:30 am (Eastern)

Access to the conference call may be obtained by dialing the following numbers:

Participant Dial-in Numbers:

  • Toronto: 416-340-8527
  • Toll-free North America: 1-800-766-6630
  • Toll-free international: (dial country code) + 800-2787-2090
  • International (not toll-free): 416-340-8527

An audio replay of the call will be available after the call by dialing 905-694-9451 (Toronto), 1-800-408-3053 (Toll-Free North America) or + 800-3366-3052 (International Toll Free) and entering the passcode 7023829. The audio replay will be available until December 31, 2013.


The scientific and technical information contained in this news release pertaining to the Karma Project has been reviewed and approved by the following independent Qualified Persons as defined under National Instrument 43-101 Standards for Disclosure for Mineral Projects ("NI 43-101"). All have consented to the disclosure of such information and of their names in this release:

  • Neil Senior, SENET (Pty) Ltd., (feasibility lead)
  • Eugene Puritch, P. Eng., P & E Mining Consultants Inc., (mining studies and resource estimations)
  • Peter Terbrugge and Ismail Mahomed, SRK Consulting,
  • Duncan Grant Stewart, Knight-Piesold (Pty) Ltd. (heap leach pad and hydrology design)
  • Yves Thomassin, Roche Ltd., Consulting Group (environmental work)
  • Bonnie Lyn deBartok, MacCormick International Mining Consultancy (CSR)

Peter C. Carter, P. Eng., Chief Operating Officer and Vice President Engineering of the Company, is the Company's designated Qualified Person, within the meaning of NI 43-101, for the technical information (other than technical information related to resources) contained in this news release and has reviewed and verified that such information is accurate and approves of the written disclosure of same.

Ian Cunningham-Dunlop, P. Eng., Senior Vice President Exploration of the Company and is the Company's designated Qualified Person, within the meaning of NI 43-101, for resource estimation information contained in this news release. He has reviewed and verified that such information is accurate and approves of the written disclosure of same.

An independent NI 43-101 Technical Report for the Feasibility Study Report will be filed on SEDAR within 45 days of the date of this news release.

About True Gold

True Gold Mining Inc. is where gold comes to life. We are committed to growing a successful gold exploration, development and production company, by focusing on projects with low costs, low technical risks and solid economics. The Company's board, management and technical teams have proven track records in gold exploration, development, operations and production worldwide.

Additional information about the Company and its activities may be found on the Company's website at www.truegoldmining.com and under the Company's profile at www.sedar.com.


Dwayne Melrose, President and CEO

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Certain statements made and information contained in this news release constitute "forward-looking information" within the meaning of Canadian securities legislation. Forward-looking statements relate to future events or future performance and reflect current estimates, predictions, expectations or beliefs regarding future events and include, but are not limited to, statements with respect to: (i) the amount of mineral reserves and mineral resources; (ii) the amount of future production over any period; (iii) net present value and internal rates of return of the proposed mining operation; (iv) capital costs, including start-up, sustaining capital and reclamation/closure costs; (v) operating and working capital costs; (vi) strip ratios and mining rates; (vii) the proposed implementation schedule, including expected time frames for receipt of necessary permits, the exploitation permit on Karma, Kao and Nami, and related environmental approvals; (viii) mine life, metal price assumptions, cash flow forecasts, projected capital and operating costs, metal or mineral recoveries, mine life and production rates, (ix) availability of project financing to fund development through to production, (x) the negotiation of a Mining Convention and other assumptions used in the feasibility study. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects", "anticipates", "plans", "projects", "estimates", "envisages", "assumes", "intends", "strategy", "goals", "objectives" or variations thereof or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements.

Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Material risk factors that could cause actual results to differ materially from those reflected in the forward-looking statements include unsuccessful exploration results, accidents or equipment breakdowns, the risk of undiscovered title defects or problems with surface access, labour disputes or inability to attract the necessary work force, the potential for delays in exploration and permitting activities, delays in the timing or failure to receive an exploitation permit on Karma, potential delays in negotiation of a Mining Convention, the potential for unexpected costs and expenses, commodity price fluctuations, currency fluctuations, political risk, unanticipated changes in key management personnel and general economic, market or business conditions, and those risks described in the Company's most recent annual information form and management discussion and analysis filed on SEDAR at www.sedar.com . This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. Forward-looking statements are based on current beliefs as well as various assumptions including, without limitation, the expectations and beliefs of management regarding the assumed long-term price of gold, the presence of and continuity of metals at the Karma project at modeled grades, the capacities of various machinery and equipment, the availability of personnel, machinery and equipment at estimated prices, exchange rates, metals sales prices, appropriate discount rates; tax rates, and royalty rates applicable to the proposed mining operation; financing structure and costs; anticipated mining losses and dilution; metal recovery rates, reasonable contingency requirements; the negotiation of satisfactory terms with impacted third parties including resettlement of local communities, receipt of required permits and access to surface rights, including the exploitation permits on Karma Project, successful negotiation of a Mining Convention, access to financing, appropriate equipment and sufficient labour, and that the political environment within Burkina Faso will continue to support the development of environmentally safe mining projects.

Although management considers these assumptions to be reasonable based on information currently available, such assumptions may prove to be incorrect. Many forward-looking statements are made assuming the correctness of other forward-looking statements, such as statements of net present value and internal rate of return, which are based on most of the other forward-looking statements and assumptions herein. The cost information is also prepared using current values, but the time for incurring the costs will be in the future and it is assumed costs will remain stable over the relevant period.

United States investors are cautioned that the requirements and terminology of NI 43-101 and the CIM Standards on Mineral Resources and Reserves – Definitions and Guideline ("CIM Standards") differ significantly from the requirements and terminology of the United States Securities and Exchange Commission ("SEC") set forth in the SEC's Industry Guide 7 ("SEC Industry Guide 7"). Accordingly, the Company's disclosures regarding mineralization may not be comparable to similar information disclosed by companies subject to SEC Industry Guide 7. Without limiting the foregoing, while the terms "mineral resources", "inferred mineral resources", "indicated mineral resources" and "measured mineral resources" are recognized and required by NI 43-101 and the CIM Standards, they are not recognized by the SEC and are not permitted to be used in documents filed with the SEC by companies subject to SEC Industry Guide 7. In addition, the NI 43-101 and CIM Standards definition of a "mineral reserve" differs from the definition in SEC Industry Guide 7.

To see Figure 1, please visit the following link: http://media3.marketwire.com/docs/1217tgm_figure1.jpg