Semafo eyeing acquisitions in West Africa - CEO
miningweekly.com
By: Reuters
18th August 2009
BANGALORE - Semafo Inc is looking to acquire projects in West Africa to boost production and is betting on its flagship mine to help the Canadian gold-miner meet the top end of its full-year output forecast, its chief executive said.
"What we are looking at are projects that will have a production capacity of over 100 000 oz of gold, with at least one-million of gold in reserves," CEO Benoit La Salle told Reuters. "We will be paying with shares."
The gold miner, which had forecast production of 220,000 ounces to 240 000 oz for the year, sees rising demand, strong gold prices and improving cash flow helping it to meet the upper end of its target.
The company also expects to benefit from strong production rates at its flagship Mana mine in Burkina Faso, which accounted for more than 60% of its total production of 21 300 oz in July.
"I expect gold prices to be way above $1 000 in 2010... Currently we are generating around $25-million of cash flow per quarter, and I can easily see it going to $40-million to $50-million with the gold price going up," Le Salle said.
The company has around $50-million in cash to fund its future projects, the CEO said.
Semafo, which currently has gold mines in Guinea, Burkina Faso and Niger, produced 195 400 oz of gold in 2008, an 84% increase over the previous year.
Rising gold prices have also helped Semafo amid the economic crisis, which has taken its toll on a number of companies.
"The economic crisis has forced a lot of base metals mines to shut down and hence all of our costs are down....and the gold price is up, so the gold sector has benefited from all sides of the financial crisis," La Salle said.
The Montreal, Quebec-based company's shares, which have surged 84 percent so far this year, were down 16 Canadian cents at C$2,12 Monday afternoon on the Toronto Stock Exchange. |
