MONTREAL, QUEBEC--(Marketwire - May 30, 2011) - SEMAFO (TSX:SMF) today announced its first quarter financial and operating results for the three-month period ended March 31, 2011. All amounts are in US dollars unless otherwise stated.

First Quarter 2011 Highlights

In the first quarter 2011, SEMAFO produced 60,000 ounces of gold and achieved gold sales of $79.4 million, compared to gold production of 65,800 ounces and sales of $63.6 million for the corresponding period in 2010. Highlights for the first quarter include:

  • Gold production of 60,000 ounces, a 9% decrease year over year
  • Gold sales of $79.4 million, an increase of 25% year over year
  • Operating income of $25.4 million, an increase of 40% year over year
  • Net income of $20.4 million an increase of 70% year over year
  • Net income attributable to equity shareholders of the Corporation of $18.2 million or $0.07 per share compared to $11.8 million or $0.05 per share for the same period last year
  • Quarterly cash flow from operating activities of $31.2 million or $0.11 per share, a 16% increase year over year
  • Record throughput at Mana
  • Discovery of the new Yaho gold zone in Burkina Faso
  • Identification of new prospective targets at Mana
  • Completion of the Wona Underground feasibility study, further confirming the economic viability of an underground mining operation at our Mana property in Burkina Faso

A Word from the CEO

With our organic growth strategy well underway, we begin 2011 with our first quarter results fundamentally in line with our expectations. We remained focused, having maintained our methodical approach in containing the significant industry-wide rise in energy and consumables costs.

Following the completion of the plant expansion at Mana, we processed a record 584,800 tonnes of ore, a 34% improvement year over year, thereby increasing overall operating income by 40%. Cash margin increased by 26% to $746 per ounce sold compared to $593 in the first quarter 2010.

Our production, combined with the rising price of gold, contributed to a 70% increase in net income for the first quarter compared to the same period in 2010. The 25% increase in gold sales is a direct result of the higher average realized price of gold, which surpassed the average London Gold Fix for a ninth consecutive quarter.

We are green-lighting development of the underground project following the results of the Mana Underground feasibility study, indicating a 49% internal rate of return based on a $1,400 gold price. Additionally, the recent expansion of the Wona SW zone demonstrated opportunities to further increase underground reserves from those reported in the underground feasibility study.

Phase IV of our Mana plant expansion is progressing well and on schedule for commissioning by year-end. This phase is aimed at increasing plant capacity to attain throughput of up to 7,200 tonnes per day in bedrock and up to 8,000 tonnes per day in blended ore.

SEMAFO's geology team accelerated our exploration programs, which have already brought about great results. Our $30-million exploration campaign aimed at further defining and ultimately increasing mineral reserves and resources at Mana is under way with 12 drills active on the property. The discovery of the new Yaho gold zone, which demonstrates significant mineralization widths, will complement the Fofina–Fobiri discovery as part of our production growth analysis scheduled for year-end 2011.

Consolidated Results and Mining Operations

Three-month period ended March 31
Operating Highlights
Gold ounces produced60,00065,800(9%)
Gold ounces sold56,70057,200(1%)
(In thousands of dollars, except amounts per ounce and per tonne)
Revenues – Gold sales79,36763,57525%
Mining operating costs (excluding Government royalties)33,57927,11524%
Government royalties3,5002,53438%
Operating income25,37018,07140%
Income tax expense4,1165,106(19%)
Net income20,39211,96370%
Attributable to:
Equity shareholders of the Corporation18,16911,79454%
Non-controlling interest2,2231691,215%
Cash flow from operating activities 131,22026,92516%
Basic net income per share0.070.0540%
Diluted net income per share0.070.0540%
Operating cash flow per share 20.110.11-
Average realized price (per ounce)1,4001,11126%
Cash operating cost (per ounce produced) 357945527%
Cash operating cost (per tonne processed) 334326%
Total cash cost (per ounce sold) 465451826%
Total cash margin (per ounce sold) 574659326%
1Cash flow from operating activities excludes changes in non-cash working capital items.
2Operating cash flow per share is a non-GAAP financial performance measure with no standard definition under IFRS. See the "Non-GAAP financial performance measures" section of the Corporation's MD&A.
3Cash operating cost is a non-GAAP financial performance measure with no standard definition under IFRS and is calculated using ounces produced and tonnes processed. See the "Non-GAAP financial performance measures" section of the Corporation's MD&A.
4Total cash cost is a non-GAAP financial performance measure with no standard definition under IFRS and represents the mining operating costs and government royalties per ounce sold.
5Total cash margin is a non-GAAP financial performance measure with no standard definition under IFRS and is calculated using the average realized price and the total cash cost.

Management remains confident that the Corporation will attain its 2011 production guidance of between 238,000 and 263,000 ounces of gold. In light of increasing fuel costs and the energy-dependent nature of our operations, we have revised our cash operating cost guidance to between $595 to $645 per ounce of gold produced. Assuming an average gold price of $1,450 per ounce, our total cash margin is estimated to increase to between $755 and $805 per ounce, compared to $723 in 2010.

A number of assumptions were made in preparing the 2011 revised cash operating cost guidance in this press release, including:

  • $1.16 per liter of crude oil
  • Canadian/US dollar exchange rate at par
  • US dollar/Euro exchange rate of $1.42
  • Social and political stability in Africa
  • Continued stable production at the Corporation's three mines

SEMAFO will host a conference call to discuss the results, as well as to provide an update on operations.

(Please note amended dial-in telephone numbers from previously-published information.)

Date: Tuesday, May 31, 2011

Time: 10:00 AM (ET)

Tel. local & overseas: 416 981-9000

Tel. North America: 1 800 379-4140

The conference call will feature Benoit La Salle, FCA, President and Chief Executive Officer and Benoit Desormeaux, CA, Executive Vice-President and Chief Operating Officer, Martin Milette, CA, CPA, Chief Financial Officer, Michel Crevier, SEMAFO's Geology Manager and Qualified Person and Patrick Moryoussef, Mining Operations Manager.

The conference call will be archived for replay until June 21, 2011. To access the archived conference call, please dial 1 800 558-5253 and enter pass code 21524020 followed by the number sign (#).

A live audio webcast of the conference can be accessed through SEMAFO's website at The webcast will be available for replay for a period of 90 days.

SEMAFO's Consolidated Financial Statements and Management's Discussion and Analysis and other relevant financial materials are available in the Investor Relations section of the Corporation's website at These and other corporate reports are also available on the website maintained by the Canadian Securities Administrators at


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.

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 "prospective", "targets", "strategy", "rising", "development", "indicating", "increase", "progressing", "schedule", "aimed at", "attain", "further", "growth", "will", "remains confident", "guidance", "assumptions", "driven", "estimated", "committed", "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 to meet a 49% internal rate of return on the Mana underground project, the ability of the Wona SW zone to further increase underground reserves from those reported in the Mana underground feasibility study, the ability of Phase IV of our Mana plant expansion to be completed on schedule and to attain throughput of up to 7,200 tonnes per day in bedrock and up to 8,000 tonnes per day in blended ore, the ability of our $30-million exploration program to further define and ultimately increase mineral reserves and resources at Mana, the ability to meet our 2011 production guidance of between 238,000 and 263,000 ounces of gold at a cash operating cost to between $595 to $645 per ounce of gold produced, the ability to meet a total cash margin of between $755 and $805 per ounce, the ability to execute on our strategic focus, 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 2010 Annual MD&A and 2010 Annual Information Form, as updated in SEMAFO's 2011 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.

Contact Information:

Benoit La Salle, FCA
President & CEO

Sofia St Laurent