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Nov 11, 2019

Semafo raises death toll to 39 from attack near Burkina Faso mine

Benoit Desormeaux, president and chief executive officer of SEMAFO Inc.

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Semafo Inc.’s mine in eastern Burkina Faso remains shuttered after an attack on a convoy of the Canadian miner’s workers left 39 dead and erased about 30 per cent of its market value.

Semafo raised the death toll by one on Monday, said 60 were injured and one was unaccounted for. A total of 241 workers were involved in the attack when five buses were ambushed by unidentified assailants about 40 kilometers (25 miles) from its Boungou mine on Nov. 6. in the West African nation.

“The unprecedented scale and nature of the attack has made basic administration and logistics very difficult,” the St. Laurent, Quebec-based company said in statement. “It will take some time to evaluate the new operating environment and to assess how we will be able to operate in a safe and secure manner in Burkina Faso. Until such time the Boungou mine operations will continue to be suspended.”

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The attack comes as several West African countries battle Islamist insurgents who are increasingly disrupting business and forcing governments to abandon large swathes of territory. The raids have spread from Sahel countries such as Mali, Niger and Burkina Faso toward the borders with coastal nations, including Ghana and Ivory Coast.

Shares of the company have dropped more than 30 per cent since Nov. 6. Chief Executive Officer Benoit Desormeaux and most of the company’s management team are now in the country dealing with the situation.

Boungou, which Semafo called its “new flagship mine,” was expected to produce 205,000 ounces of gold a year on average for the next five years, according to the company’s September presentation.

The stock was downgraded by Paradigm Capital and Bank of Nova Scotia to a hold, given the uncertainty. It has seven buys, four holds and no sells, according to ratings compiled by Bloomberg.