GOLD: Semafo waves good-bye to Samira Hill

NIGER – Semafo Inc. of Montreal has agreed to sell its 80% interest in the Samira Hill gold mine to Middle Island Resources of West Perth, Australia. The remaining 20% of the mine belongs to the government of Niger.

The purchase price includes a cash payment of US$1.25 million and a net smelter return of 1.2% on Middle Island's portion of the output. The NSR is payable only if the price of gold is above US$1.450/oz and is capped at US$12 million.

The sale is subject to the usual conditions. It is also dependent on Middle Island raising A$5 million equity capital, taking over Semafo's exploration permits, and transferring certain mining equipment to Semafo.

Semafo took a $60-million impairment charge on Samira Hill at the end of 2012 and a further $35.1 million in Q1 2013. The company announced at that time it intended to put the mine on care and maintenance by the end of this year. The company put six-month guidance numbers on Samira production at 23,000 to  26,000 oz at a total cash cost of between $985 and $1,035 per oz.

Visit www.Semafo.com for information on the company's other mines in Burkina Faso and Guinea.