Komet Resources, Inc. (TSX: KMT) Advances Guiro Gold Project to Production in Burkina Faso, Considers Acquisition of Additional Permits to Expand Project in Near Term.
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By Dr. Allen Alper, PhD Economic Geology and Petrology, Columbia University, NYC
on 4/19/2016
Komet Resources, Inc., (TSX: KMT), currently working in Burkina Faso on the Guiro gold project, has brought the project into production and is now considering adding additional permitted areas to their claim. Andre Gagne is experienced working in Africa and understands how to achieve cash flow in a relatively short time frame. The project has plans for expansion and adding more personnel on the ground in Burkina Faso. Komet has great management, high grade gold, low costs and excellent shareholders. Komet philosophy is producing by discovering (Produire pour découvrir)
Mr. Andre Gagne, the President and CEO of Komet Resources, Inc. (TSX: KMT.V) updated readers and investors on the progress that the company has made in bringing the Guiro gold project in Burkina Faso into production and the future plans they have for the project.
He said, “Guiro is a little underground mine with high grade material. It is around eight or nine grams per ton. We bought the mine in July of last year from a Frenchman and one man from Liban. They built the mine in 2011, but didn’t have the expertise to make it work, we took over the mine and we re-built everything.”
The goal of taking on the mine was to bring it quickly into production. In order to do that, the team from Komet has been working not only on mining, but on capital repairs and improvements. Said Gagne, “We fixed everything and we bought new equipment and since October we restarted the underground mine and we are now producing.”
Bringing the mine into production so quickly has allowed the company to expand their plans. Gagne said, “We started by restoring the “VAT Leaching” system, which is treating the rejects. We are now waiting for some of the equipment so we can finish the optimization of the plant. We are working carefully and are producing around four or five kilograms of gold and when the new equipment is installed, we will produce about ten to fifteen kilograms of gold per day. In the mean time, we continue exploration of the permit, we found five different areas in the permitted area with really good results. We were really happy to learn of a little discovery. It sounds good and we think we have two new spots that are rich in gold.”
Purchasing new equipment, with the goal of increasing efficiency, is just one of the tactics the company has employed to jumpstart the project. Said Gagne, “The new equipment will decrease costs and increase production. Part of the new equipment has arrived and is on site, but we need to complete the installation and fix them. We bought a lot of heavy equipment, some are going to take time to get on site. We expect to raise the production in May, June and July.”
Gagne has a long history of working in Africa and knows the area well. He said, “In terms of my background, I have been working in Africa since 2008. I spent five years with Robex Resources and I have been with Komet since we started the project in 2013.” In addition to Gagne’s leadership, the company has added more individuals who are working at the project. He said, “We brought in five ex-pats from the Quebec province over there and here we are. We have more than a hundred people working in Burkina Faso. We have an engineer over there from Quebec, we have a geologist and three different guys – a mine director, a chief mechanics, and an electrician that work for us in Burkina Faso. I have been working in Quebec City and I go to Burkina Faso about 3 times a year and we have other people that work with me here.”
The company is closely held and the majority of the investors are people who are closely tied to the company. Said Gagne, “We have only 46 million shares and with the people on the Board, good friends and people around us, we have about 70% of the shares. It is a very nice project.”
Currently, the company is focused on gold production with the goal of generating a good income stream that will positively affect the company. Said Gagne, “At this moment, over the last three months, since the end of December, we have sold $800 gold. The expectation is that at the end of April we will have sold enough gold to break even.”
In order to continue their plans, the company is currently looking for a small financing to continue work on the mine. That is a stop gap measure until the production can catch up. Gagne said, “We are now looking for a little financing of about one to two million dollars just to finish the plant and to fix the mine, but at the end of April we will be at break even. After that, we will start to make a profit and we want to be able to put that profit in the ground. Last week, we sold in Canadian dollars at $1700 per ounces, so it is really good. Our goal would be to be the first venture company to pay dividends to sharholders”
Gagne believes that Komet Resources is an opportunity for investors to profit. The project has plans for expansion and adding more personnel on the ground in Burkina Faso. He said, “We have good management with high grade gold and good shareholders. We have low costs. We are looking for additional permitting and are negotiating to buy one or two more permits because we want to take the same people from Quebec to manage other permits and move people on the other permits. It is cheaper because ex-pat costs a lot. If we can manage the other permit with the same peoples, it will be cheaper to manage the project.”
Gagne feels comfortable working in Burkina Faso. He said, “As you know, last year people decided they did not want the President of Burkina Faso anymore. He was there for 27 years. In March, they tried to have a coup, but they didn’t make it. In November, we had a democratic election and have a new President. We are really happy about this situation at the moment. We hope and we think that it will be the right time for change over there.”
http://kometgold.com/en/
1191, De Montigny Québec (Québec) G1S 3T8
Phone : (581) 300-1666 (581) 300-1666
André Gagné, président et chef de la direction
a.gagne@kometgold.com
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