Roxgold Awards Underground Mining Contract With US$15 Million Equity Investment and Payment Option for the Yaramoko Gold Project
Partners with Experienced West African Contractor AUMS
TORONTO, Sept. 29, 2014 /CNW/ - Roxgold Inc. (ROG: TSX.V) ("Roxgold" or the "Company") is pleased to announce that it has awarded the underground mining services contract (the "Contract") for its Yaramoko Gold Project in Burkina Faso to a subsidiary of African Underground Mining Services ("AUMS").
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AUMS is at the forefront of African underground mining having worked with some of the largest resource companies in the world at projects in Mali, Ghana and Burkina Faso. AUMS is a joint venture between Ausdrill Limited, a leading international mining services business, and Barminco Limited, a specialist underground mining contractor. With industry leading safety and training systems along with extensive experience operating underground mines in West Africa, AUMS is uniquely qualified to assist in the development of the Yaramoko Gold Project.
The Contract has an initial term of four years and includes the provision of a mining fleet and skilled labour force.
"The award of the underground mining contract to AUMS is a key event for Roxgold and brings us closer to our development goals for 2014, which include breaking ground late in the fourth quarter," commented Paul Criddle, Chief Operating Officer. "Partnering with an experienced team which has a demonstrated presence in West Africa furthers our objective to deliver our first full year of production at Yaramoko in 2016."
In connection with the mining agreement, AUMS has agreed to subscribe for US$5 million of Roxgold common shares upon contract commencement and Roxgold will have the option to settle up to US$10 million in payments to AUMS in the form of Roxgold common shares (the "Payment Shares"). The subscription price for each Payment Share will be based on a 5% discount to the volume weighted average price of Roxgold shares on the TSX Venture Exchange for the five trading days following the date of the particular invoice. The subscription price and shares for services amount together represent approximately 50% of the anticipated pre-production underground development capital expenditures.
"We are delighted by the confidence shown in the Yaramoko Gold Project by one of the most experienced underground mining contractors in the West African region," commented John Dorward, Roxgold's President and Chief Executive Officer. "Not only does it clearly align our interests with those of our most significant operating partner, it provides a substantial boost to our financing flexibility as we seek to fund the development of our Project."
The proposed issuance of Roxgold common shares in payment for AUMS services is subject to the prior approval of the TSX Venture Exchange.
Upcoming Catalysts
| Expected Timeline | |
| Debt Financing Credit Approved Commitments | Early Q4 2014 |
| EPCM Contract Finalization | Q4 2014 |
| Power Supply Agreement Finalization | Q4 2014 |
| Exploitation (Mining) Permit Approval | Q4 2014 |
| Recommencement of Regional Exploration Program | Q4 2014 |
| Financial Close and First Drawdown on Debt Facility | Q4 2014 |
| Commencement of Development | Late Q4 2014 |
About Roxgold
Roxgold is a gold exploration and development company with its key asset, the high grade, 100% owned Yaramoko Gold Project located in the Houndé greenstone region of Burkina Faso, West Africa. The Company is currently advancing Yaramoko's 55 Zone through permitting and, subject to making a positive construction decision, expects to commence development in Q4 2014. Roxgold trades on the TSX Venture Exchange under the symbol ROG.
"Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."
This news release contains forward-looking information. Forward looking information contained in this new release includes, but is not limited to, statements with respect to: (i) the estimation of inferred and indicated mineral resources and probable mineral reserves; (ii) the success of exploration activities; (iii) the completion and timing of the environmental assessment process; (iv) the receipt of an exploitation (mining) permit; (v) the finalization of material agreements and financing; and (vi) the results of the Feasibility Study including statements about future production, future operating and capital costs, the projected IRR, NPV, payback period, and production timelines for the 55 Zone on the Yaramoko permit.
These statements are based on information currently available to the Company and the Company provides no assurance that actual results will meet management's expectations. In certain cases, forward-looking information may be identified by such terms as "anticipates", "believes", "could", "estimates", "expects", "may", "shall", "will", or "would". Forward-looking information contained in this news release is based on certain factors and assumptions regarding, among other things, the estimation of mineral resources and mineral reserves, the realization of resource estimates and reserve estimates, gold metal prices, the timing and amount of future exploration and development expenditures, the estimation of initial and sustaining capital requirements, the estimation of labour and operating costs, the availability of necessary financing and materials to continue to explore and develop the Yaramoko project in the short and long-term, the progress of exploration and development activities, the receipt of necessary regulatory approvals, the completion of the environmental assessment process, and assumptions with respect to currency fluctuations, environmental risks, title disputes or claims, and other similar matters. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.
Forward looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include risks inherent in the exploration and development of mineral deposits, including risks relating to changes in project parameters as plans continue to be redefined including the possibility that mining operations may not commence at the Yaramoko project, risks relating to variations in mineral resources and mineral reserves, grade or recovery rates resulting from current exploration and development activities, risks relating to changes in gold prices and the worldwide demand for and supply of gold, risks related to increased competition in the mining industry generally, risks related to current global financial conditions, uncertainties inherent in the estimation of mineral resources and mineral reserves, access and supply risks, reliance on key personnel, operational risks inherent in the conduct of mining activities, including the risk of accidents, labour disputes, increases in capital and operating costs and the risk of delays or increased costs that might be encountered during the development process, regulatory risks, including risks relating to the acquisition of the necessary licenses and permits, financing, capitalization and liquidity risks, including the risk that the financing necessary to fund the exploration and development activities at the Yaramoko project may not be available on satisfactory terms, or at all, risks related to disputes concerning property titles and interest, and environmental risks. Please refer to the Company's Short Form Prospectus dated March 17, 2014 filed on SEDAR at www.sedar.com for political, environmental or other risks that could materially affect the development of mineral resources and mineral reserves. This list is not exhaustive of the factors that may affect any of the Company's forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking information. The Company does not undertake to update any forward-looking information that may be made from time to time by the Company or on its behalf, except in accordance with applicable securities laws.
SOURCE: Roxgold Inc.
Annelise Burke
Manager, Investor Relations & Corporate Communications
T: 416-203-6401
E: [email protected]
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