Burkina Faso opens its third gold mine in a year

OUAGADOUGOU, July 1 (Reuters) - Burkina Faso has formally opened its third gold mine in a year, the open-cast Mana facility operated by Toronto-listed SEMAFO (SMF.TO).

The Mana mine, inaugurated on Monday 270 km (170 miles) northwest of the capital Ouagadougou, expects to produce 3.6 tonnes of gold per year, local mining officials said.

"Exploitation of the Mana mine will bolster the state's budget by an average of 15.5 billion CFA francs ($37.3 million) per year, in mine royalties and taxes, to which dividends will be added," Mines, Quarries and Energy Minister Abdoulaye Abdoulkader Cisse told reporters.

The Mana mine, where SEMAFO's exploration in 1998 discovered estimated reserves of some 35 tonnes, has already produced 400 kilos of gold since March 31. Officials said recent prospection showed total reserves could reach as high as 100 tonnes.

Over the last year, Burkina Faso has already started up two other gold mines, Taparko-Bouroum, majority owned by Canadian-listed High River Gold Mines Ltd. (HRG.TO), and Youga, operated by Toronto-listed Etruscan Resources Inc (EET.TO). The government said in October the country aimed to produce 15-20 tonnes of gold a year by 2009 as new mines came on line.

Another gold mine should open in Kalsaka in October, while a zinc mine at Perkoa is set to open at the end of next year.

Industrial gold mining started in Burkina Faso in the 1950s under French colonial rule but, although some artisanal panning continued, the last commercial mine closed in 1999 after gold prices sank below $300 an ounce and foreign prospectors left.

But they have come back in recent years, drawn by enhanced tax breaks included in a 2003 mining code, and rising world gold prices. (For full Reuters Africa coverage and to have your say on the top issues, visit: africa.reuters.com/) (Reporting by Mathieu Bonkoungou; Writing by Ingrid Melander; Editing by Pascal Fletcher)