Roxgold has mobilised its underground mining contractor to its Yaramoko Gold project located in Burkina Faso, West Africa.

According to the company, the previously announced mining services contract signed with the underground mining contractor, which is a subsidiary of African Underground Mining Services (AUMS), has an initial term of four years.

The contract includes the provision of a mining fleet, as well as skilled labour force.

"The alignment of interests between Roxgold and a key contractor bodes well for the smooth operation of the Yaramoko Gold Project."

Earlier AUMS announced that it will make an initial investment of $5m in the company through a non-brokered private placement, in connection with mobilisation.

Roxgold will use the net proceeds to partially fund the development and exploration of its gold project in addition to general corporate purposes.

Under the contract, Roxgold will have the option to settle up to $10m in payments in the form of the company common shares.

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Roxgold chief operating officer Paul Criddle said: "We are very pleased to welcome AUMSG as a shareholder of Roxgold.

"The alignment of interests between Roxgold and a key contractor bodes well for the smooth operation of the Yaramoko Gold Project, development of which has been progressing very well."

A joint venture between Ausdrill and Barminco, AUMS will assist in the development of the gold project from which production is expected in the second quarter of 2016.