In addition, the company provides an update of the ongoing development of the Yaramoko Gold Project.
Activities on site at Yaramoko are advancing at an encouraging rate. Since breaking ground at the project in late March, works have been significantly advanced in all areas. Early works have focused on the critical path activities of bulk earthworks, camp construction and procurement.
Over 700 personnel are now on site working on the project and all contractors associated with the project have mobilized with works advancing simultaneously on all fronts. As at the end of July, the company had spent approximately US$ 25 million and remains on target to complete the project within the budget of US$ 110.8 million.
Roxgold president & CEO John Dorward said: "We are very pleased with the start of activities to date as the project continues according to plan and budget.
"Initial progress has been encouraging and we are well placed to advance the construction of Yaramoko with key items of equipment and both major contractors now on site."
Bulk Earthworks
The bulk earthworks scope is well advanced and approximately 4 weeks ahead of schedule and approximately two thirds complete. The Water Storage Facility is completed and now collecting water this wet season. The Tailings Storage Facility embankment is also completed. Both of these structures have been constructed as per design and budget.
Camp Construction
The construction of the 190 man accommodation camp is progressing well and is approximately 70% complete. All accommodation building brickwork has been finished and roofing is well advanced. Painting, tiling and final fit out of the residential quarters is advancing, with several blocks nearing completion. Brickwork for the kitchen, laundry and recreational complexes is continuing. Reticulation of plumbing and electrical services is well advanced and expected to be completed in August. Handover and commencement of occupancy is planned for September.
Mine Development
The boxcut excavation is completed, as are the ground support works around the portal in advance of collaring the ramp portal. The underground contractor, an affiliate of African Underground Mining Services Ltd. ("AUMS"), has mobilized key personnel and equipment to site. The explosives magazine is under construction with completion expected in August. Pouring of the concrete footings for the corrugated liner plate tunnel ("Armtec Tunnel") accessing the underground workings has commenced.
Processing Plant
The lump sum EPC contractor (DRA/Group Five Joint Venture) has mobilized and is on site with establishment activities well advanced. The bulk earthworks in the processing plant are completed and the area now handed over to the EPC contractor. Concrete pouring for footings in the SAG mill, reclaim vault, CIL and crusher areas are now well advanced. Procurement activities are well advanced with all long lead contracts placed by the EPC contractor.
Long lead procurement
Critical path procurement activities are progressing well. The SAG mill is largely procured with the mill shell, motors and cast in items now on site. All SAG mill components are expected to be in country in August. The complete Armtec Tunnel for the underground access is now on site. Long lead items on the high voltage powerline such as detailed design, tower steel and transformer are well advanced with components starting to arrive on site.
Roxgold Owners Team
Roxgold now has its full site management team in place with all operating department heads recruited and on site. This group, in addition to the project team, which has been on site for some time, are now working at developing the processes, systems and structures to ensure a smooth transition from development to operations in mid-2016.
Financing
As previously announced on June 9, 2015, Roxgold signed a credit agreement with Societe Generale Corporate & Investment Banking and BNP Paribas (collectively the "Banks"), providing for a US$ 75 million senior debt facility. The proceeds of the Debt Facility will be used for the development of the Yaramoko Project. Roxgold continues to make progress towards meeting the conditions precedent for the initial drawdown of the Debt Facility, including receipt of the signed copy of the Yaramoko Mining Convention from the Ministry of Mines, settling of the engineering, procurement and construction (EPC) contracts with its EPC contractors, Group Five Burkina Faso SARL, DRA Mineral Projects (PTY) Limited and Group Five Projects (PTY) Ltd., and completion of a gold hedging program totaling 65,000 ounces of forwards at an average price of US$ 1,052 per ounce to be settled on a monthly basis from January 2017 to March 2021. The Company is continuing to work to satisfy all remaining conditions precedent for the initial drawdown of the Debt Facility, and currently anticipates that drawdown will occur this quarter.
The Company currently has approximately US$ 24 million in cash on hand including US$ 15 million in the Cost Overrun Facility and the option, within the underground mining services contract with AUMS, to pay for mining services up to US$ 10 million in the form of Roxgold shares. In addition, as previously announced, the International Finance Corporation proposes to invest approximately US$ 15 million in the Company by means of a non-brokered private placement for common shares. Negotiations of the definitive subscription agreement are underway and Roxgold currently anticipates closing the private placement in September.
