Roxgold Reports Financial Results For Second Quarter 2014

TORONTO, Aug. 26, 2014 /CNW/ - Roxgold Inc. ("Roxgold" or "the Company") (TSXV: ROG) today reported its financial results for the three and six-month periods ended June 30, 2014.  For complete details of the unaudited Condensed Interim Consolidated Financial Statements and associated Management's Discussion and Analysis for the three and six-month periods ended June 30, 2014, please see the Company's filings on SEDAR (www.sedar.com) or the Company's website (www.roxgold.com).

SECOND QUARTER 2014 HIGHLIGHTS

• On April 22, 2014, the Company announced the results of its feasibility study for the Yaramoko Gold Project (the "Feasibility Study");
• Continued exploration on the prospective Bagassi South Zone with expenditures on the Yaramoko exploration property totalling $6,997,000, for the quarter ended June 30, 2014;
• On June 26, 2014, Roxgold announced that following a competitive selection process, it had executed a US$75 million project finance mandate with Société Générale Corporate & Investment Banking and Credit Suisse AG;
• At June 30, 2014, the Company had $29,943,000 in cash and cash equivalents; and
• Net loss for the quarter ended June 30, 2014 amounted to $1,968,000.

A.    Feasibility Study

On April 22, 2014, Roxgold announced the results of its Feasibility Study for the Yaramoko Gold Project.  The study envisions an underground mining scenario with a mine life of over seven years. The Feasibility Study also outlined:

¹ Production costs are presented in accordance with World Gold Council standards and are a non-IFRS financial performance measure with no standard definition under IFRS.

The economic parameters presented above are based upon 100% ownership of the Yaramoko gold project. Under the Mining Code of Burkina Faso, the Government of Burkina Faso is entitled to a 10% interest in the project upon formal award of an exploitation permit. On a 90% basis, the After-tax NPV^5% of the Company's interest in the project is US$232 million under the base case scenario. The Government of Burkina Faso is estimated to receive an undiscounted US$143 million from Yaramoko in the form of dividends, taxes, VAT, duties and levies.

The key assumptions utilized were a gold price of US$1,300 per ounce sold, a diesel price of US$1.58 per litre delivered to site as well as an electricity tariff of US$0.171 per kWhr and a royalty rate of 5%.

On June 4, 2014, the full 43-101 Feasibility Study Technical Report was filed on SEDAR, and posted on the Company's website.

More information on the Feasibility Study can be found in the April 22, 2014 news release available on SEDAR at www.sedar.com and on the Company's website at www.roxgold.com.

B.         Regional Exploration Update

On May 6, 2014, Roxgold announced the latest results from its regional exploration program at Yaramoko's prospective Bagassi South Zone.

Highlights from the diamond drilling program at Bagassi South's QV1 target included:

• 226.76 grams per tonne ("gpt") gold over 3.1 metres (2.7 metres true width) including 442.00 gpt gold over 1.6 metres (1.4 metres true width) in diamond drill hole YRM-14-BG-041;
• 3.04 gpt gold over 5.0 metres (3.2 metres true width) including 11.30 gpt gold over 0.6 metres (0.3 metres true width) in diamond drill hole YRM-14-BG-043 as well as an additional intercept of 3.04 gpt gold over 3.8 metres (2.4 metres true width); and
• 2.44 gpt gold over 1.7 metres (1.5 metres true width) including 6.56 gpt gold over 0.6 metres (0.5 metres true width) in diamond drill hole YRM-14KD-BG-023, located 200 metres west along strike from QV1.

For more information please refer to the Company's news release dated May 6, 2014.

C.         Expansion of the Yaramoko Permit

On May 8, 2014, the Burkina Faso Ministry of Mines issued a permit expansion enlarging the total permit area from 167 km² to 196 km². 

D.         Annual General Meeting

On May 27, 2014, the Company held its Annual General Meeting in Toronto.  Shareholders voted to re-elect the Company's eight member Board of Directors ("The Board") as well as to approve the Shareholder Rights Plan ("the Rights Plan") with 69.60% of shares outstanding represented at the meeting. The Rights Plan is intended to ensure that in the event of an unsolicited take-over bid for the common shares of the Company, all holders of common shares of the Company and the Board have adequate time to consider and evaluate any such take-over bid, the Board has adequate time to identify, solicit, develop and negotiate value-enhancing alternatives, as considered appropriate, to any such take-over bid and the Company's shareholders are treated fairly in connection with any such take-over bid. The Rights Plan is not intended to prevent a change of control of the Company to the detriment of shareholders.

In addition, Roxgold shareholders also voted in favour of ratifying and approving:

• PricewaterhouseCoopers LLP as the Company's auditors;
• Renewing the Company's rolling stock option plan (the "Option Plan") whereby the Company is authorized to grant stock options of up to 10% of its issued and outstanding shares, from time to time;
• Amendments to the Company's deferred share unit plan; and
• Amendments to the Company's restricted share unit plan.

E.         Project Financing Mandate

On June 26, 2014, Roxgold announced that following a competitive selection process, it had executed a project finance mandate with Société Générale Corporate & Investment Banking ("Société Générale") and Credit Suisse AG ("Credit Suisse"), (collectively the "Banks"). The mandate sets forth a US$75 million senior project debt facility (the "Facility") with a targeted financial close in the fourth quarter of 2014. Closure of the Facility is subject to customary internal approvals and completion of due diligence. The Facility is expected to encompass a hedging component of approximately 8.5% of Yaramoko's current reserves.

EVENTS SUBSEQUENT TO JUNE 30, 2014

On August 18, 2014, the Burkina Faso Ministry of Environment and Sustainable Development approved the Environmental and Social Impact Assessment ("ESIA") for the Yaramoko Gold Project.  This marked a key milestone in the permitting process, for which the Company had completed public consultations and crop compensation agreements.

NEAR TERM CORPORATE OBJECTIVES

The Company will continue to advance its Yaramoko gold project throughout 2014 in line with its development goals for this year.  In the near term, planned activities at the Yaramoko project include:

• Completing detailed engineering during the third quarter;
• Finalizing permitting, which is expected during the fourth quarter;
• Finalizing project financing, which is expected during the second half of the year;
• Formal commencement of development stage activities; and
• Initiating early stage construction works to preserve the timeline to production.

In addition, the Company continues to explore on its 196 km² permit where it has identified priority drill targets that will continue to be tested during the remainder of the year. Most notably these include the QV1 target at Bagassi South where recent drilling has returned high grade results.

QUALIFIED PERSON

Ben Pullinger, P.Geo, Vice President of Exploration for Roxgold Inc., a Qualified Person within the meaning of National Instrument 43-101, has verified and approved the technical data disclosed in the press releases included herein by reference. This includes the sampling, analytical and test data underlying the information.

ABOUT ROXGOLD

Roxgold is a gold exploration and development company with its key asset, the high grade, 100% owned Yaramoko Gold Project located in the Houndé greenstone region of Burkina Faso, West Africa. The Company is currently advancing Yaramoko's 55 Zone through permitting and, subject to making a positive construction decision, expects to commence development in Q4 2014. Roxgold trades on the TSX Venture Exchange under the symbol ROG.

ON BEHALF OF ROXGOLD INC.

"Natacha Garoute"
Chief Financial Officer and Corporate Secretary

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

This news release contains forward-looking information. Forward looking information contained in this new release includes, but is not limited to, statements with respect to: (i) the estimation of inferred and indicated mineral resources and probable mineral reserves; (ii) the success of exploration activities; (iii) the completion and timing of the environmental assessment process (iv) the results of the Feasibility Study including statements about future production, future operating and capital costs, the projected IRR, NPV, payback period, and production timelines for the 55 Zone on the Yaramoko permit.

These statements are based on information currently available to the Company and the Company provides no assurance that actual results will meet management's expectations. In certain cases, forward-looking information may be identified by such terms as "anticipates", "believes", "could", "estimates", "expects", "may", "shall", "will", or "would". Forward-looking information contained in this news release is based on certain factors and assumptions regarding, among other things, the estimation of mineral resources and mineral reserves, the realization of resource estimates and reserve estimates, gold metal prices, the timing and amount of future exploration and development expenditures, the estimation of initial and sustaining capital requirements, the estimation of labour and operating costs, the availability of necessary financing and materials to continue to explore and develop the Yaramoko project in the short and long-term, the progress of exploration and development activities, the receipt of necessary regulatory approvals, the completion of the environmental assessment process, and assumptions with respect to currency fluctuations, environmental risks, title disputes or claims, and other similar matters. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

Forward looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include risks inherent in the exploration and development of mineral deposits, including risks relating to changes in project parameters as plans continue to be redefined including the possibility that mining operations may not commence at the Yaramoko project, risks relating to variations in mineral resources and mineral reserves, grade or recovery rates resulting from current exploration and development activities, risks relating to changes in gold prices and the worldwide demand for and supply of gold, risks related to increased competition in the mining industry generally, risks related to current global financial conditions, uncertainties inherent in the estimation of mineral resources and mineral reserves, access and supply risks, reliance on key personnel, operational risks inherent in the conduct of mining activities, including the risk of accidents, labour disputes, increases in capital and operating costs and the risk of delays or increased costs that might be encountered during the development process, regulatory risks, including risks relating to the acquisition of the necessary licenses and permits, financing, capitalization and liquidity risks, including the risk that the financing necessary to fund the exploration and development activities at the Yaramoko project may not be available on satisfactory terms, or at all, risks related to disputes concerning property titles and interest, and environmental risks. Please refer to the Company's Short Form Prospectus dated March 17, 2014 filed on SEDAR at www.sedar.com for political, environmental or other risks that could materially affect the development of mineral resources and mineral reserves.  This list is not exhaustive of the factors that may affect any of the Company's forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking information. The Company does not undertake to update any forward-looking information that may be made from time to time by the Company or on its behalf, except in accordance with applicable securities laws.

SOURCE Roxgold Inc.