Semafo Expects Higher Costs, Increased Production In 2012

Canadian mining company Semafo forecast its 2012 gold production Monday, with the midpoint dipping below last year's output while cash costs rise.

The Montreal-based company (TSX,OMX: SMF) predicts its gold production will be between 235,000 ounces and 260,000 ounces. The figure falls within the range of Semafo's 2011 output, totaling 250,100 ounces.

Its 2012 operating cost has been set between $700 and $750 per ounce of gold, an increase over last year's $595 and $645 per ounce.

The company's exploration budget will expand to $45 million from $39 million last year. A majority of the funds will be put toward Semafo's crown jewel property in Mana, Burkina Faso, which accounts for 75 percent of the company's gold output.

Semafo expects total capital expenditures of $195 million.

The company said it remains extremely profitable and will enjoy large cash margins in the coming year.