July 12, 2010 08:15 ET

SEMAFO Compliant with World Bank Extractive Industries Transparency Initiative

MONTREAL, QUEBEC--(Marketwire - July 12, 2010) - SEMAFO (TSX:SMF) today reiterated that the Company adheres to the highest corporate governance and business standards. SEMAFO and its Samira Hill Mine in Niger, operating under the name Société des Mines du Liptako S.A. ("SML") have always been respectful of the Niger mining code, rules and regulations and are compliant with the revenue transparency initiative supported by the World Bank. SEMAFO and its subsidiaries have consistently honored all contractual agreements with the Government of Niger and in all of the countries in which we operate.

A new investigative committee has been put in place in Niger. The committee was established by the transitional government to review the agreements endorsed by previous regimes, more specifically with regard to the economic benefits to the country.

Commenting on the matter, Benoit La Salle, SEMAFO's President and Chief Executive Officer, "We have always upheld transparent business practices. Our organization is governed by strong ethics and values and we certainly welcome any enquiries or comments in this regard. Our financial reporting and obligations are of the highest standards. We are confident that the Niger committee will confirm this fact and that there will be no major repercussion on SML as a result of this inquiry."

"At SEMAFO, we pride ourselves on being responsible corporate citizens. We continually strive to respect and honor our contracts and we have always been fully compliant with our mining agreements," added Mr. La Salle. "In Niger, we have paid more than $24.8 million in taxes, royalties and local salaries from 2004 to 2009, $14 million of which represented royalty payments. In addition during this period, SML spent more than $153 million on locally-purchased goods and services."

In 2003, and with the approval of the SML shareholders, SML with SEMAFO as guarantor undertook a hedging program with a financial institution, Société Générale, to obtain debt financing for construction of the mine and infrastructures. Since then, SEMAFO has invested in excess of $80 million in SML.

In compliance with customary mining practices, SML intends to pay dividends to its shareholders once the capital has been reimbursed to its funding shareholder. In this regard, it is important to note that according to West African corporate-governing regulations, dividends can be paid to shareholders once the accumulated deficit has been cleared in full.

All SML accounts are audited annually and a special report filed in accordance with OHADA-governed regulation ("Organisation for the Harmonization of Business Law in Africa", a system of business laws and implementing institutions adopted by sixteen West and Central African nations).


SEMAFO is a Canadian-based mining company with gold production and exploration activities in West Africa. The Company currently operates three gold mines: the Mana Mine in Burkina Faso, the Samira Hill Mine in Niger and the Kiniero Mine in Guinea. SEMAFO is committed to evolve in a conscientious manner to become a major player in its geographical area of interest. SEMAFO's strategic focus is to maximize shareholder value by effectively managing its existing assets as well as pursuing organic and strategic growth opportunities in West Africa.

Caution Concerning Forward-looking Statements

This press release contains forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and assumptions and accordingly, actual results and future events could differ materially from those expressed or implied in such statements. You are hence cautioned not to place undue reliance on forward-looking statements. Forward-looking statements include words or expressions such as "growth", "evolve", "become", "pursuing" and other similar words or expressions. Factors that could cause future results or events to differ materially from current expectations expressed or implied by the forward-looking statements include the ability of the Niger Commission to confirm that SML has conducted itself in accordance with its contractual commitments with the Niger government, applicable law and high governance, financial and business standards, as well as mining industry risks, delays, political and social stability in Africa (including our ability to maintain or renew licenses and permits) and other risks described in SEMAFO's documents filed with Canadian securities regulatory authorities. You can find further information with respect to these and other risks in SEMAFO's 2009 Annual MD&A, as updated by our 2010 First Quarter MD&A, and other filings made with Canadian securities regulatory authorities and available at These documents are also available on our website at SEMAFO disclaims any obligation to update or revise these forward-looking statements, except as required by applicable law.

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