SEMAFO Inc. (TSX:SMF) has been saying that it hoped to reach commercial production at its Boungou Mine in West Africa during the third quarter. Monday morning the St-Laurent, Quebec-based company said it has met the goal as of September 1.
Ore was first processed at the end of May at Boungou and the first gold pour happened in late June. The company has stockpiled more than 300,000 tonnes of ore as it prepared for commercial production.
As of the end of 2017, mineral reserves at Boungou were 11.2 million tonnes grading 4.11 g/t gold for approximately 1.5 million ounces of gold. At $1,200 per ounce of gold, that's $1.8 billion worth of the precious yellow metal.
The definition of commercial production can vary, but is often related to nearing production capacity. In the case of SEMAFO and Boungou in eastern Burkina Faso, commercial production was hit when the mine reached the production measure of 30 consecutive days of mill throughput at 75% of the 4,000 tonnes-per-day nominal design capacity.
Across the month, the mill processed over 90,000 tonnes of ore at an average grade of 2.4 g/t gold at a recovery rate of 83%.
The mill process was being optimized utilizing lower grade ore, with higher grade ore introduced in the latter portion of the 30-day period. Through optimization, the recovery rate rose to 93%.
Now that commercial production has been achieved, SEMAFO forecasts 2018 gold production at Boungou to be in the range of 60,000 to 70,000 ounces.
The company also owns the Mana mine in western Burkina Faso, which has 1.7 million ounces of reserves at 2.9 grams per tonne gold.
As gold prices continue to slide, traders aren't exactly cheering the SEMAFO milestone judging by shares of SMF trading down a dime at $3.17 in Tuesday morning trading.
