Toro Gold (“Toro Gold” or the “Company”) is pleased to report its operating results for the period 1st January to 30th June 2018 at its 90% owned Mako Gold Mine (“Mako”, or the “Mine”) in Eastern Senegal.
Martin Horgan, Chief Executive Officer, commented:
“We are delighted with the performance of the Mako mine over the first half of 2018. A highly successful construction process was followed by a smooth and seamless transition into the commissioning phase and onto operations. The hard work and professionalism of our development and operations teams have given the Mako mine an excellent start to operational life with all areas of performance either at or better than forecast budgeted parameters. With such a positive start to 2018 we remain on track to deliver this year’s production target of 134koz.
Additionally, our drilling programme remains on schedule for completion in Q4 2018 in order to provide an updated mineral resource for the Mako mine. We are pleased with the encouraging results we have seen so far. Building on this momentum, the second half of 2018 will see a continued focus on the optimisation of the mine to maximise operational efficiencies, identify possible cost reductions and mine life extensions. We look forward to updating you in due course.”
Mining operations undertaken by contractor African Mining Services Senegal (“AMSS”) have continued to progress well. Over the period a total of 6.5 million tonnes of waste was mined against a budget of 7.5 million tonnes while some 1.4 million tonnes of ore was mined against a budget of 1.1 million tonnes. With a substantial amount of ore now available for mining in the pit, giving good operational flexibility, mining during the second half of 2018 will focus on waste stripping to ensure the requirements of the life of mine plan are met during the 2018 period.
Grade control reconciliation continues to show good correlation with the forecast reserve model with contained gold being in line with forecast levels.
As at 30th June 2018, stockpile levels were 965,000 tonnes of ore at an average grade of 1.52 g/t Au for contained gold of ~47,000 ounces.
Processing operations have performed well over the period. A total of 859,000 tonnes at an average grade of 2.59g/t Au have been milled against the budget of 760,000 tonnes at an average grade of 2.66g/t Au.
The final tails grade is some 47% lower than forecast, leading to metallurgical recoveries in excess of 95% over the period, against a budget of 91.6% .
Favourable comminution characteristics throughout the circuit and lower than anticipated wear have contributed to better than forecast liner life with the first mill reline taking place in August 2018.
Gold recovered during the period was 68,229 ounces against the budget forecast of 59,650 ounces.
While the period included the commissioning and ramp up period, the operational team have maintained excellent discipline around cost control, which when combined with the operational benefits realised to date, has resulted in the costs outperforming the budget forecast. Over the period, cash costs (inclusive of all royalties) were US$745/oz against a budget forecast of US$875/oz. Management focus will remain on further cost optimisation over the second half of 2018 in order to potentially identify further opportunities for cost reduction.
During Q3 2018 the Mako Mine will undertake a 90 day Completion Test on behalf of the Company’s international investors to demonstrate commercial production has been achieved at the mine.
Health, Safety, Environmental and Social Programme
During the period, the Company has continued to focus on the commitments made in the 2016 Environmental and Social Impact Assessment (“ESIA”), and the development of an integrated HSES management system to support operation of the Mako Mine.
Two (2) Lost Time Injuries were recorded in H1 2018 against 1.17 M hours worked. A full investigation was undertaken post the incident and corrective measures to work practices have been implemented to prevent further future issues. Both employees have made full recoveries and have returned to duties.
No environmental incidents were recorded and activities have remained compliant with relevant legislation and licensing commitments. One community incident occurred but was calmly resolved to the satisfaction of the complainants.
As of June 2018, the Mine workforce totalled approximately 900 of which 260 are direct employees of the Mako Mine. With a focus on local recruitment and training, it is noted that approximately 90% of the workforce are Senegalese nationals and that 60% are from the local Kedougou region.
Under the scope of the Livelihood Restoration Programme (which was negotiated with Mine affected communities in 2016), key activities have included: continued expansion of irrigated market gardening; fruit tree orchards; mechanised wet season agriculture; and water points for livestock. A household socio-economic survey completed in January 2018, including women’s and youth focus groups, confirmed that the Mako Mine had made a positive contribution to livelihood development including food security.
Implementation of the Petowal Biodiversity Offset Programme (PBOP), over a 1,800km2 intervention zone in the southeast Niokolo-Koba National Park, continued under the scope of a tripartite agreement between the Company, the Direction of National Parks and the conservation NGO Panthera. The African Wildlife Foundation (AWF) has recently been appointed to lead implementation of the community-based component of the PBOP. A Heads of Agreement outlining the principles of partnership between the AWF, local authorities and the Company will be developed in H2 2018, for presentation at the next Biodiversity Offset Advisory Panel meeting scheduled in late-November.
UNESCO released its draft State of Conservation Report on the Niokola-Koba National Park in mid-May (42 COM 7A.55). The report acknowledges the Government of Senegal’s efforts to implement corrective measures in the Park, including the tripartite joint programme with the Company and Panthera in the southeast of the Park. The Report also notes the efforts of the Company to monitor its impacts and requests the government of Senegal to submit this data to the World Heritage Centre.
An Investment Strategy for the management of the Environmental and Social Fund to which the Mako Mine will contribute approximately US$450k pa, has been approved by local authorities.
Resource expansion exploration drilling
The 15,000 metre, 60 hole core drilling programme that commenced in February is on-going and to date 50% complete with the programme on schedule for completion in early Q4. The objective of the drilling programme has been to explore the down dip continuation of the ore body beneath the current final pit design.
Two areas of the Petowal ore body are being investigated:
Drilling at depth beneath the final reserve pit has consistently confirmed the Petowal geological model and mineralisation, over typical widths and grades is being intersected where predicted by the block model. Based on the final drilling programme results as well as grade control drilling, a resource update will be carried out by Cube Consulting during Q4.
Cautionary Note Regarding Forward Looking Statements
This Press Release may contain statements which constitute “forward-looking”, including statements regarding the plans, intentions, beliefs and current expectations of the Company, and its directors, or officers with respect to the future business activities and operating performance of the Company. The words “may”, “would”, “could”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” and similar expressions or the negative thereof, as they relate to the Company, or its management, are intended to identify such forward-looking statements.
Investors are cautioned that any such forward-looking statements are not guarantees of future business activities or performance and involve risks and uncertainties, and that the Company’s future business activities may differ materially from those in the forward-looking statements as a result of various factors.
Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. These forward-looking statements speak only as at the date of this press release. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not be as anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update these forward-looking statements.