MONTREAL, Oct. 29 /CNW Telbec/ -- SEMAFO (TSX: SMF) is pleased to announce the positive results of a Preliminary Economic Assessment (PEA) confirming the economic potential of the Wona underground deposit. The PEA is based on December 2008 resources estimates with the inclusion of 2009 drill results up to WDC 99. The remainder of reported 2009 drilling results (WDC 100 to WDC 146) were not included in the PEA, nor does it include any inferred resources. Based on the positive PEA and the successful drilling program results, SEMAFO has decided to proceed with a pre-feasibility study including all 2009 drilling results.

Highlights of the PEA (using an $800/oz gold price) include:
- Indicated resources attributable to the underground mine of
approximately 4.5 million tonnes at 3.2 g/t Au diluted for over
460,000 ounces
- Mine life of more than 6 years at 2,000 tpd
- Cash operating cost of $43 per tonne
- Annual production from underground of 57,000 ounces at a cash operating
cost of $556 per ounce
- Initial capital expenditure of $52.4 million

The positive PEA results, in conjunction with Mana's ongoing open pit operations and existing infrastructures, is demonstrative of the potential to develop an economically viable underground mining operation. Gold production from the underground is estimated at 4.5 million tonnes at 3.2 g/t of indicated resources at a cash operating cost of $556 per ounce. This represents a 6.2-year mine life at a rate of 2,000 tpd for the underground operation and considering that open pits will maintain a rate of 4,000 tpd. The PEA supports the economically and technically viable development of the Wona underground using a 2.8 g/t cut-off grade with 20% dilution, a process plant recovery rate of 76% and energy costs of $0.13 per kWh from the national power grid. Initial capital cost expenditures are estimated at $52.4 million with ongoing capital expenditures of $5.5 million.

The Wona underground project is particularly attractive owing to the $140 million processing plant and infrastructures currently in place. Subject to the results of the pre-feasibility study, the underground operation will provide additional tonnage to the mill in order to increase Mana's overall mine life by more than two years at a throughput of 6,000 tpd.

Financial Analysis
Price of Gold
$800      $900      $1,000
IRR (Pre-tax)                   12%       25%         36%
Operating Cash Flow ($M)        83       118         152

"Results to date exceed our expectations," said Benoit La Salle, SEMAFO's President and CEO.