New, higher grade deposits of gold are coming to bear on gold-miner Semafo’s production, buoying output and finances.

Semafo reported strong results in its latest quarter including 72,700 ounces in porduction at cash costs of $475 an ounce gold, versus 41,500 ounces gold at $604 an ounce last year.

The improvement – which looks to be one that will largely hold for Semafo – has been some time in the making after a change in strategy that started in 2012.

Semafo's bumper gold quarter

The course change was two pronged. Semafo decided to unload its high-cost Samira Hill gold mine in Niger and it discovered high-grade gold near its existing Wona-Kona deposit and nearby Mana processing plant in Burkina Faso.

Quickly after the discovery the focus turned to bringing the new ounces, in what became known as the Siou deposit, into the production fold once it was clear there was a substantial deposit. So far reserves have grown to 4.8 million tonnes gold @ 4.94 g/t Au.

These compare very favourably to reserves in Wona-Kona, which Semafo has been mining for some time, which holds 18.8 million tonnes @ 2.19 g/t Au in reserves.

So this quarter, with ore finally coming in at full steam from Siou and another higher grade deposit called Fofina, Semafo’s gold grades popped. It processed 723,900 tonnes ore @ 3.37 g/t gold versus 712,100 tonnes @ 2 g/t Au a year ago and meantime recoveries jumped from 85 to 93 percent.

Semafo's bumper gold quarter

The jump in recoveries owed to easier to process ore from Fofina and Siou, and Semafo also noted that grade was higher than it expected due to an enriched zone at Fofina.

Still, it was a mighty quarter for Semafo, bolstering its view it would meet the upper end of its 200,000 to 225,000 ounce gold forecast for production this year.

So it was not much of a surprise today to see Semafo’s shareprice leap, up 10 percent at presstime to C$5.29 and to new 52-week highs.