VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jan. 29, 2015) - True Gold Mining Inc. (TSX VENTURE:TGM) ("True Gold" or the "Company") today provided the following progress report outlining efforts to resume full construction at its Karma Gold Project ("Karma" or the "Project") in Burkina Faso:
- The Government of Burkina Faso is meeting with community members to re-establish the Community Liaison Committee (CLC) in order to facilitate a return to work and resumption of construction.
- True Gold expects the new CLC to serve as an important bridge between the Project and the local community going forward. The Company hopes to resume work as issues are discussed and resolved through the CLC, which dissolved late last year with the change in central government. The CLC was originally created in 2012 and served as an effective channel for dialogue, engagement, issue resolution and Project orientation. It included representation from 65 different stakeholders, including True Gold.
- During this period, True Gold is taking appropriate steps to limit its capital expenditures, including reducing employees, deferring payments, and holding materials and equipment in supplier inventory.
- The Company is finalizing a plan that will enable an efficient restart of operations at the mine. Our team is working closely with SENET, the engineering, procurement and construction management (EPCM) contractor for Karma. We anticipate having this plan completed in the coming weeks.
- True Gold has received assurances from the central government in Burkina Faso that Company permits remain valid and secure for all deposits.
- Additionally, the Burkina Faso Minister of Mines and Energy along with the Governor of Yatenga Province held a nationwide press conference on January 20, 2015 where they reinforced the validity and acceptance of the Karma Mine plan and promoted community dialogue.
Mark O'Dea, True Gold's Executive Chairman and interim President and CEO, said: "When we began work in Burkina Faso 10 years ago, we made a commitment to give back to the community we operate in and the people we depend on. To this end, we've helped build out critical local infrastructure, including establishing water wells, upgrading roads, erecting a year-round fresh water barrage, planting hundreds of trees, and providing enhanced medical care. We've also created roughly 450 jobs, and provided a significant boost to the regional economy. Going forward, as part of a broader development plan created in concert with all the Project's stakeholders, we've committed to provide additional water access, road upgrades, improved educational resources and further skills training."
"In all, despite this temporary period of unrest, we believe we've established a foundation of trust, cooperation and mutual understanding with the community that will allow Karma to move forward."
"While we are pleased with the progress now being made to resume construction, the continued fluidity of events in Burkina Faso has made an update on Karma's project timeline difficult to pin down. We do have some flexibility in the timeline, as we were ahead of schedule and anticipated pouring first gold as early as October 2015 when construction at Karma was suspended in early January. However, if the work stoppage at Karma continues, there may be a material change to the project timeline. As soon as we can provide a definitive update on the timeline, we will."
"In the meantime, True Gold is liaising with government and the community to resolve issues important to local stakeholders in Ramatoulaye and Namissiguima. As part of this, we are putting in place the people and processes that will allow us to better anticipate these concerns going forward and resolve them. We intend to come out of this period on much stronger footing in the community and better equipped to reduce the risk of future local unrest," said Dr. O'Dea.
Continued Support from Funding Partners
The Company's principal funding partners, Franco-Nevada Corporation and Sandstorm Gold Ltd., remain committed to the Project and are supportive of the Company's efforts to restore normal operations.
Paul Brink, SVP of Corporate Development of Franco-Nevada, said, "To date, the Franco-Nevada/Sandstorm partnership has advanced $58 million of the $100 million stream financing announced in August 2014. We are supportive of True Gold's efforts to build their relationship with the community, maintain our commitment to fund the construction of the Karma Mine and believe the mine will deliver benefits for all the stakeholders over the long term."
Additionally, True Gold notes that Project contingency and the available overrun facility will be employed as required to fund any necessary changes to the development plan, enable construction to restart and the Project to successfully move forward to completion.
Addressing Local Concerns
One of the concerns raised in the local community is the Project's potential impact on the Ramatoulaye Mosque. With the assistance of several levels of government, True Gold has liaised with community representatives to address misconceptions and provide assurances that the Project will not affect the mosque, which is located 1.18 kilometers from the edge of the Rambo pit.
The Rambo pit is a small, shallow pit that will be mined with smaller, low-intensity equipment over an 18-month period. Mining the Rambo pit does not require any community relocation and is free digging down to 50 metres. True Gold has put in place all safety and environmental protection measures to ensure activities do not impact Ramatoulaye structures, including a four-meter high sound barrier, a 250-meter wide safety zone, ground water monitoring and several dust suppression initiatives.
Once in production, Karma will be one of the lowest cost gold mines in West Africa, with an initial 8.5-year mine life, excluding North Kao, and significant exploration growth potential. Based on the Karma feasibility study, it is estimated that Karma will deliver approximately US$160 million in revenue to the Government of Burkina Faso during the life of the mine through a net smelter royalty, corporate taxes and a 10% carried interest.
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.
ON BEHALF OF THE BOARD
Mark O'Dea, Interim President & 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.
All statements in this press release, other than statements of historical fact, are "forward-looking information" with respect to True Gold within the meaning of applicable securities laws, including statements with respect to the potential quantity and/or grade of minerals, potential size and expansion of a mineralized zone, proposed timing of exploration and development plans. Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "planned", "expect", "project", "predict", "potential", "targeting", "intends", "believe", "potential", and similar expressions, or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "should", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management at the date the statements are made including, among others, assumptions about future prices of gold, copper, silver and other metal prices, currency exchange rates and interest rates, favourable operating conditions, political stability, obtaining governmental approvals and financing on time, obtaining renewals for existing licenses and permits and obtaining required licences and permits, labour stability, stability in market conditions, availability of equipment, accuracy of any mineral resources, successful resolution of disputes and anticipated costs and expenditures. Many assumptions are based on factors and events that are not within the control of True Gold and there is no assurance they will prove to be correct.
Such forward-looking information, involves known and unknown risks, which may cause the actual results to be materially different from any future results expressed or implied by such forward-looking information, including, risks related to the interpretation of results at the Karma Project, reliance on technical information provided by third parties as related to the Karma Project; changes in project parameters as plans continue to be refined; current economic conditions; future prices of commodities; possible variations in grade or recovery rates; the costs and timing of the development of new deposits; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; the timing and success of exploration activities generally; satisfaction of Burkina Faso requirements relating to the periodic submissions of Environmental Impact Assessments; possible claims against the Company or its joint venture partners; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals, financing or in the completion of exploration, uncertainties relating to the interpretation of drill results and the estimation of mineral resources, the geology, grade and continuity of mineral deposits, accidents, equipment breakdowns, risk of undiscovered, title defects and surface access, the potential for delays in exploration and permitting activities, the potential for unexpected costs and expenses, commodity price fluctuations, currency fluctuations, political risk as well as those factors discussed in the Annual Information Form of the Company dated April 29, 2014 in the section entitled "Risk Factors", under True Gold's SEDAR profile at www.sedar.com. Although True Gold has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. True Gold disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise unless required by law.