True Gold Mining Inc.

True Gold Mining Inc.

March 02, 2015 09:00 ET

True Gold Provides Update on Karma Project

VANCOUVER, BRITISH COLUMBIA--(Marketwired - March 2, 2015) - True Gold Mining Inc. (TSX VENTURE:TGM) ("True Gold" or the "Company") today provided the following update regarding its Karma Gold Project ("Karma" or the "Project") in Burkina Faso:

Project Update and Recovery Plan

  • Working with SENET, the engineering, procurement and construction management (EPCM) contractor for Karma, the Company expects to optimize the project plan and be 10 months to first gold pour once construction activities fully resume. As of December 2014, Karma had US$61.7 million of US$131.5 million spent and committed. True Gold will provide a definitive update on the project timeline as soon as it is able.

  • True Gold estimates equipment and site damages to be approximately US$6.1 million. Of that, approximately US$2 million will be compensated through various insurance policies and True Gold is working with its insurance providers to finalize the quantum and coverage.

  • The Company has approximately US$40 million in cash on hand and recorded realized capex savings of approximately US$5 million as of December 2014. True Gold has drawn US$57.7 million of the US$100 million Franco Nevada and Sandstorm financing package with an option to draw up to an additional US$20 million.

  • As part of its effort to limit capital expenditures until construction resumes, the Company implemented a technical shutdown as prescribed under applicable Burkina Faso labour laws. This allows the Company to provide financial assistance to its employees during the shutdown, preserve capital and efficiently restart operations.

Community Relations

  • True Gold is engaged with diverse working groups that include leaders from government, traditional authorities, religious groups, and local business. The groups are also taking an active role in dealing with a small fringe element largely responsible for the unrest in January. The discussions have been productive and are ongoing.

  • The Burkina Faso Minister of Mines hosted a news conference in February reassuring the local community that mine construction and operations will not impact the Ramatoulaye mosque. Upon the request of local leaders, the Minister also delivered a letter to the Sheik of Ramatoulaye expressing the same assurance.

Mark O'Dea, True Gold's Executive Chairman and interim President and CEO, said: "We are now rapidly progressing towards resuming full construction at Karma. In the last few weeks, we have been particularly encouraged to see a number of influential local stakeholders step forward and advocate on our behalf; they share our commitment to bring about a lasting resolution and establish a foundation of mutual understanding and trust with the community.

"While we recognize the need to resume construction, we are working towards a long-term, 15 to 20-year solution, that builds strong ties with all of our stakeholders. We believe that this approach is the best way to minimize the risk of a future disruption and enable Karma to deliver sustainably on its significant potential over its long mine life."

"At the same time, we are mindful of our immediate business reality and the need to be prudent stewards of shareholder capital. To this end, we made the decision to formalize a technical shutdown of operations as prescribed by Burkina Faso labour laws. This will enable us to preserve capital in the near term and resume construction quickly and efficiently while still providing an income source to our valued and loyal staff," said Dr. O'Dea.

The Company will continue to provide updates as it works towards the resumption of construction at Karma as new information becomes available.

With respect to the Company's ongoing search for a new chief executive, True Gold has been impressed by the number and quality of applications, and is now evaluating a short list of candidates. It expects to complete this process shortly.

About Karma

The Karma Project is an ideal foundation upon which to build a mining company. Karma is a technically simple open-pit heap leach project that offers low capital and operating costs, rapid payback and strong financial performance. Once in production, Karma will be one of the lowest cost gold mines in West Africa with significant exploration growth potential.

It is estimated that Karma will deliver approximately US$162(1) million in revenue to the Government of Burkina Faso during the life of the mine through a net smelter royalty, corporate taxes and a 10% carried interest. The mine will also provide extensive local investment in infrastructure, education and procurement.

About True Gold

True Gold Mining Inc. is where gold comes to life. We are committed to growing a successful gold exploration, development and production company, by focusing on projects with low costs, low technical risks and solid economics. The Company's board, management and technical teams have proven track records in gold exploration, development, operations and production worldwide.

Additional information about the Company and its activities may be found on the Company's website at and under the Company's profile at


Mark O'Dea, Interim President & CEO

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

All statements in this press release, other than statements of historical fact, are "forward-looking information" with respect to True Gold within the meaning of applicable securities laws, including statements with respect to the potential quantity and/or grade of minerals, potential size and expansion of a mineralized zone, proposed timing of exploration and development plans. Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "planned", "expect", "project", "predict", "potential", "targeting", "intends", "believe", "potential", and similar expressions, or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "should", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management at the date the statements are made including, among others, assumptions about future prices of gold, copper, silver and other metal prices, currency exchange rates and interest rates, favourable operating conditions, a timely resolution to the current work stoppage, political stability, obtaining governmental approvals and financing on time, obtaining renewals for existing licenses and permits and obtaining required licences and permits, labour stability, stability in market conditions, availability of equipment, accuracy of any mineral resources, successful resolution of disputes and anticipated costs and expenditures. Many assumptions are based on factors and events that are not within the control of True Gold and there is no assurance they will prove to be correct.

Such forward-looking information, involves known and unknown risks, which may cause the actual results to be materially different from any future results expressed or implied by such forward-looking information, including, risks related to the interpretation of results at the Karma Project, reliance on technical information provided by third parties as related to the Karma Project; changes in project parameters as a result of the work stoppage or as plans continue to be refined; delays in the resolution of issues surrounding the Company's work stoppage; current economic conditions; future prices of commodities; possible variations in grade or recovery rates; the costs and timing of the development of new deposits; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; the timing and success of exploration activities generally; satisfaction of Burkina Faso requirements relating to the periodic submissions of Environmental Impact Assessments; possible claims against the Company or its joint venture partners; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals, financing or in the completion of exploration, uncertainties relating to the interpretation of drill results and the estimation of mineral resources, the geology, grade and continuity of mineral deposits, accidents, equipment breakdowns, risk of undiscovered, title defects and surface access, the potential for delays in exploration and permitting activities, the potential for unexpected costs and expenses, commodity price fluctuations, currency fluctuations, political risk as well as those factors discussed in the Annual Information Form of the Company dated April 29, 2014 in the section entitled "Risk Factors", under True Gold's SEDAR profile at Although True Gold has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. True Gold disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise unless required by law.

(1) The estimated figures provided are from the Karma Project definitive feasibility study, Dated December 17, 2013 and the North Kao PEA dated dated August 10, 2014, (which are available under the Company's profile at and based on the assumptions made therein. The estimated figures can be affected by a number of factors, including but not limited to gold prices, consumables pricing, labour, materials and contract pricing.

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