20th February 2017
West African confirms Sanbrado as +150,000 ounces per annum gold producer by 2019All amounts stated in US dollars. Base case is stated on a 100% project basis at $1,200/oz
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Sanbrado open pit feasibility study confirms:
Forecast annual production of 150,000 ounces over the first 3 years of project and 93,000 ounces per annum over 9 years of current mine life (LOM)
124% increase in Indicated Resources at M1 South, driving new project economics
103% increase in Probable Reserves now 894,000 ounces (16.8Mt at 1.7g/t Au)
Two year pay back on $131 million capex (including pre-production mining and contingency)
Low All-In Sustaining Costs (AISC) of $708/oz over the first 3 years and $759 over LOM
Strong economics - pre-tax NPV5% of $143m, IRR 27% and post-tax NPV5% of $100m, IRR 21%
Sanbrado is 'shovel ready' with mining and environmental permits already approved
Camp construction and early site works are underway
Discussions with project lenders in progress, targeting conventional debt and equity finance
Ore reserves based on Indicated Resources only, study delivered 6 months after M1 maiden resource and less than 12 months after M1 South high-grade discovery
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Substantial upside to LOM through optimised definitive feasibility study and further drilling:
Significant opportunity to boost to project economics through underground mining at M1 South reducing high Y1-2 stripping costs
Infill drilling targeting conversion of Inferred Resources within and beneath current ore reserve pit shells, and follow-up extensional drilling at M1 and M5
DFS to include resource and reserve update for M1 and M5
DFS completion by Q3 2017, fully-funded from existing cash of A$17 million
"From high-grade discovery to delivering a robust feasibility study in less than 12 months is an outstanding achievement, and a credit to our dedicated in-country team and independent consultants.
"The recent discovery of high-grade gold at M1 South is the driving force behind the new project, which currently represents a high-margin, but high strip ratio open pit. It is likely to be more cost effective to mine M1 South with a smaller open-pit followed by underground mining. This is the focus of current development work and will be reported in an optimised definitive feasibility study by Q3 2017.
Principal Office: 14 Southbourne Street, Scarborough WA 6019, Western Australia
T: + 61 8 9481 7344 F: + 61 8 9481 7355 E: info@westafricanresources.com www.westafricanresources.com ACN: 121 539 375
"The next steps are straight-forward - with $17m cash on hand we are well-funded to carry out work programs, including the optimisation study, which is likely to drive mining costs significantly lower. Drilling programs will also focus on converting existing Inferred Resources within and beneath reserve pit-shells, and drilling 'open at depth' extensions at M1 and M5.
"The open pit feasibility study as it currently stands demonstrates very strong early cashflow, rapid payback of capital and allows us to advance discussions with project lenders while completing optimisation work and further drilling, and commence early site works including camp construction.
"We look forward to keeping the market informed with results from our busy 2017 work program."
Gold developer West African Resources Limited (ASX, TSXV: WAF) is pleased to announce the results of its Open Pit Feasibility Study, prepared in accordance with the requirements of the 2012 JORC Code and NI 43-101, for the Sanbrado1 Gold Project, Burkina Faso. The study envisages an initial 9 year mine life, with strong early cashflow and a rapid payback of capital.
Sanbrado Open Pit Feasibility Study - Production and Financial Highlights | |
Base case is stated on a 100% basis and a gold price of $1,200/oz (all amounts in US$) | |
Production Y1-3 | Average of 150,000oz/yr |
Production LOM | Average of 93,000oz/yr |
Production Costs1 Y1-3 | Average Cash Costs of $672/oz (including royalties) |
Average All-in Sustaining Costs (AISC) of $708/oz | |
Production Costs LOM | Average Cash Costs of $717/oz (including royalties) |
Average All-in Sustaining Costs (AISC) of $759/oz | |
IRR | Pre-tax IRR of 27% and 2.1 year payback on initial capital |
After-tax IRR of 21% and 2.3 year payback on initial capital | |
NPV | Pre-tax NPV (5%) of $143M |
After-tax NPV (5%) of $100M | |
Capex | Pre-Production capital of $131 million (including pre-production mining and contingency) |
Study Mine Life | 8.75 years |
Probable Mineral Reserves2,3 | 16.8Mt at 1.7g/t gold containing 894,000 ounces of gold (strip ratio of 5:1) |
LOM Recoveries | 90.7% for 810,000 ounces of gold recovered |
1 Cash costs include all mining and processing costs, site administration, royalties, refining and site rehabilitation costs. AISC includes Cash costs, sustaining capital, closure costs but excludes head office corporate costs.
2 Based on Indicated Resources only, in-pit Inferred Resources treated as waste in the study mining schedule.
3 The average strip ratio of 5.0:1 is inclusive of a strip ratio of 35.6:1 for the M1 South pit.
1 Formerly known as the Tanlouka Gold Project
Figure 1 Sanbrado Gold Project Resources and Site Layout Figure 2 Sanbrado Gold Project LocationWest African Resources Limited published this content on 20 February 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 19 February 2017 21:58:16 UTC.
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