Avesoro Resources’ subsidiaries Burkina Mining and Netiana Mining have signed an open pit mining contract with Orkun Group at the Youga Gold Mine in Burkina Faso.
The mining programme is based on the excavation of approximately 800,000 to 900,000 bank cubic metres (BCM) of material per month, including a monthly minimum of 120,000t of ore delivered to the run-of-mine (ROM) pad.
The contract is also based on the excavation of a minimum of 42 million BCM (Minimum TMM) of material over the life of Youga, which can be increased to 60 million BCM on the same terms, subject to the company’s option.
The excavation price of the contract during the Minimum TMM period is valued at $4.26 per BCM, which is approximately $1.60 per tonne.
Orkun will pay $0.51 per BCM to acquire Burkina Mining’s existing heavy mining equipment (HME) fleet.
Under the terms of the contract, Orkun will also supplement the existing HME fleet with $5m of additional equipment at its own cost.
The first batch of this additional HME is expected to arrive at Youga in the third quarter of this year.
Burkina Mining and Netiana Mining will hold responsibility for mining geology, planning and other costs which are included in the total mining cost reported by Avesoro.
Avesoro Resources CEO Serhan Umurhan said: “Outsourcing the mining activity will also enable us to reduce our direct employee headcount and overall business complexity thereby reducing G&A costs.
“The responsibility for future fleet maintenance costs has also been transferred to Orkun, thereby significantly reducing the company’s 2019 funding shortfall that was announced on 10 June 2019.”
The company announced the restart of mining processing and operations at the Youga Gold Mine last month.
In February 2016, Avesoro acquired Youga Gold Mine from Endeavour Mining for $25.3m.