SEMAFO Inc.
TSX : SMF

SEMAFO Inc.

May 17, 2010 07:47 ET

SEMAFO INC. Enters Into a Bought Deal Agreement for Gross Proceeds of C$104.25 Million

MONTREAL, QUEBEC--(Marketwire - May 17, 2010) -

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT AUTHORIZED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

SEMAFO INC. (TSX:SMF) has today entered into an agreement with a syndicate of underwriters led by Jennings Capital Inc., CIBC World Markets Inc. and Macquarie Capital Markets Canada Inc. (the "Underwriters") under which the Underwriters have agreed to buy 15 million common shares (the "Common Shares") from SEMAFO on a bought-deal basis and sell them to the public at a price of C$6.95 per Common Share. The Company has also granted to the Underwriters an over-allotment option to purchase up to an additional 2.25 million Common Shares at the same price.

The gross proceeds raised from the offering will be C$104,250,000 (C$119,887,500 if the over-allotment option is exercised in full). The offering is subject to the approval of the TSX. The Common Shares will be offered in certain provinces of Canada by short form prospectus, and in such other jurisdictions, including the United States and in those jurisdictions outside of Canada which are agreed to by the Company and the Underwriters, where the Common Shares can be issued on a private placement basis, exempt from any prospectus, registration or other similar requirements. The offering is expected to close on or about June 4, 2010.

SEMAFO intends to use the net proceeds of the offering for the purchase of mining fleet for the Samira Hill Mine (including spare parts), exploration and development activities at the Mana Mine and general corporate purposes.

The securities being offered have not, nor will they be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act. This release does not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States or any state thereof where such offer or solicitation would be unlawful.

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 "aimed", "increasing", "will", "increase", "schedule", "completion", "extend", "expected", "remain, "future", "look forward", "continuing", "growth", "strategy", "unlocking", "further", "currently", "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 closing of the offering, the intended use of the net proceeds of the offering, fluctuation in the price of currencies, gold or operating costs, mining industry risks, uncertainty as to calculation of mineral reserves and resources, 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 and other filings made with Canadian securities regulatory authorities and available at www.sedar.com. These documents are also available on our website at www.semafo.com. SEMAFO disclaims any obligation to update or revise these forward-looking statements, except as required by applicable law.

The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information