Teranga Gold Corp. [TGZ-TSX, ASX; TGCDF-OTCQX] said Thursday September 5 that its second West African gold mine has reached the production stage ahead of schedule.
Teranga’s Wahgnion Gold Operations in southwest Burkina Faso began processing ore in August, 2019, the company said in a press release on September 4, 2019. The mine is expected to produce 30,000 to 40,000 ounces of gold in 2019, contributing the total consolidated production of 245,000-270,000 ounces in 2020.
“During August, we successfully commissioned the Wahgnion plant and are pleased to report that all aspects of the plant are now operational. Fine tuning will continue during September with throughput and grade expected to ramp up during the fourth quarter, in line with our guidance,” said Teranga Chief Operating Officer Paul Chawrun.
“We are able to start production ahead of schedule due to the dedication of our owner’s team led by Metifex, as well as our EPCM partner Lycopodium,” he said.
On Thursday, Teranga shares eased 2.1% or 12 cents to $5.53. The shares are currently trading in a 52-week range of $2.97 and $5.71.
With a clear focus on West Africa, Teranga Gold has positioned itself as a rare growth story in a rising gold market.
Teranga is taking a long term approach with the aim of building the company into a mid-tier gold producer with annual production in the 500,000 ounces range.
The foundation for that growth is the Sabodalo gold mine in Senegal, which is expected to produce between 215,000 and 230,000 ounces of gold this year.
With Sabodala on track to produce a minimum of 200,000 ounces through at least 2022, Teranga has been working to develop the Wahgnion gold mine in Burkina Faso.
Teranga owns 90% of the project. The other 10% is held by the Burkina Faso government.
Based on the results of a feasibility study that was announced in early September, 2017, Wahgnion was estimated to contain 1.61 million ounces of contained gold ounces (31.07 million tonnes of ore, grading 1.61 g/t gold).
“We are very excited to report that construction is complete and that we have achieved our first gold pour at Wahgnion, two months ahead of schedule,” said Teranga President and CEO Richard Young.
“[Wahgnion] will diversify our production base and add significant scale by increasing our consolidated annual gold production by 50% to between 300,000 and 350,000 ounces,” Young has said.
Free cash flow is expected to be used to fund Teranga’s growth plans in Wahgnion, Sabodala, and Golden Hill, the company’s most advanced exploration property. The company recently initiated a 27,000-metre drill program at Golden Hill designed to increase the resource base. It also commenced initial studies and test work related to producing a technical report to support the application for a mining license in 2020.