True Gold is on track to becoming Burkina Faso's next gold producer (Photo: Alamy/The Telegraph)

True Gold is on track to becoming Burkina Faso's next gold producer (Photo: Alamy/The Telegraph)

Dr. Mark O'Dea's Burkina Faso gold developer, True Gold Mining (TGM:TSXV), received good news this morning from the authorities of the West African nation; the company has been granted the environmental permit for the Kao deposit.  This environmental nod, keeps the company on track for its development timeline for the Karma gold mine.  They now have four of the five gold deposits permitted which represents the bulk of the contained gold.  The environmental permit for Kao includes the social impact assessment and relocation action plan.  This permit will be used as part of the final exploitation permit for Kao, which the company believes it is still on track for receiving.

True Gold is awaiting a final signature from the President of Burkina Faso for their Karma exploitation permit, which was approved by the Burkina Faso council of ministers last month.  The Karma exploitation permit will allow True Gold to develop the Goulagou I, Goulagou II and Rambo gold deposits as part of the Karma gold mine complex.

"Receipt of the environmental permit for Kao, following the successful release of the feasibility study results in December, keeps Karma firmly on track to becoming Burkina Faso's next gold mine," said Dwayne Melrose, president and chief executive officer, True Gold.

True Gold is coming off a busy end of 2013 where they not only advanced permitting at Karma, but also released a robust feasibility study in mid-December.  This returned strong economics with an after-tax NPV(5%) of $178.2 million and a 43.1% IRR using a $1,250 gold price.  The feasibility outlined an 8.5 year mine-life with average annual production of 97,000 ounces of gold.  With 0.89g/t average gold grade, the project represents an above average grade heap leach project with a manageable capex of $131 million.

The team has raised over $50 million in the past year and is sitting on roughly $25 million in cash.  Teck and Liberty Metals & Mining are strategic shareholders who, combined, own nearly one third of the company.

The company expects to be granted the exploitation permits by the end of Q1/2014 at which point they will likely make their production decision.

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Read: True Gold receives Environmental Permit for Kao

Related: West Africa Is Now The World’s Low Risk Mining Jurisdiction, Says Gold Vet Mark O’Dea (Podcast)