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True Gold Mining has suspended operations at its Burkina Faso-based Karma project due to a demonstration.
True Gold Mining (TSXV:TGM) hit a bump in the road on Wednesday when it suspended operations at its Burkina Faso-based Karma project following a demonstration.
The decision to suspend operations was a precautionary measure aimed at keeping employees and the project safe, and at “allow[ing] the communities and authorities to engage with the demonstrators,” states True Gold in a press release.
Few further details have been provided about the demonstration, but the company does note that its “property and assets” have suffered some damage. Currently it is in the midst of assessing the significance of that damage, as well as “potential impacts to project schedule.”
In a call with Gold Investing News, Blaine Monaghan, director, investor relations, at True Gold, elaborated a bit more, noting that the company doesn’t have a clear sense of who was behind the demonstration, though it’s possible it is related to a December 9 disturbance that led to a temporary work slowdown at Karma.
He also said the company is “working with the government to find a resolution … as soon as possible,” and True Gold’s press release promises an update stakeholders when more information is available.
Some shareholders, however, have not waited around for more news — at close of day Wednesday, True Gold was down 25.45 percent, sitting at $0.205. The company is also down a substantial 49.38 percent in the last year, in part due to the eruption of protests in Burkina Faso last year — they ultimately resulted in the ousting of President Blaise Compaore. While Karma wasn’t directly affected, investor confidence in the area was somewhat shaken.
That said, Monaghan concluded by pointing out that communication should be able to solve the current situation. “In order to receive our permits, we had to have stakeholder approval from all of the communities within our permit area,” he said. “And over the course of the last few years we carried out more than 100 meetings with these various stakeholders. So we have heard some of these concerns before. They had been addressed before … it just speaks to the importance of constant communication.”
He added, “hopefully we can re-engage and solve these issues … and get back to normal operations.”
Karma is currently under construction, with first gold pour targeted for Q4 2015. A December 2013 feasibility study indicates that it has probable mineral reserves of 33.2 million tonnes at 0.89 grams per tonne containing 949,000 ounces of gold. It is expected to produce 97,000 ounces a year over a mine life of 8.5 years.
It will certainly be interesting to watch how the situation develops.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
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State of Emergency Declared as Protests Erupt in Burkina Faso