Gold mining company West African Resources Limited ('West African' or the 'Company', ASX: WAF) is pleased to announce it has entered into a definitive agreement to acquire 100% of the Toega gold deposit (Toega) from B2Gold Corp (B2Gold) and their partner, GAMS-Mining F&I Ltd (GAMS).
Toega is located within 14km of the Company's flagship Sanbrado Gold Project (Sanbrado), Burkina Faso.
Highlights
WAF to acquire Toega from B2Gold and GAMS for US$45 million in staged payments.
Located within trucking distance (14km) of Sanbrado.
Existing Inferred Resource is 1.1Moz gold at 2.1 g/t Au, with excellent exploration upside.
Toega is expected to increase the Sanbrado production profile and mine life with a relatively low capital expenditure.
Planning work to commence immediately, field work to commence later this year following the wet season
West African Executive Chairman Richard Hyde commented: 'We are excited to have reached this agreement to acquire the neighbouring Toega deposit from B2Gold and GAMS. Toega is expected to increase Sanbrado's production profile and mine life. We intend to kick off drilling and feasibility studies in the near future, with the aim of bringing Toega ore into the Sanbrado mine plan within three years.
Toega Acquisition Key Terms
The Toega deposit is situated within the Nakomgo Exploration Permit that is owned 90% by B2Gold and 10% by GAMS. WAF to acquire 100% of the Nakomgo Exploration Permit for consideration of US$45 million, comprised of the following staged payments
US$10m initial cash payment (to be paid from existing cash reserves).
US$10m in cash or shares to be paid following completion of a feasibility study prior to the second anniversary of signing the agreement, triggering ownership transfer of the Nakomgo Exploration Permit to WAF or its subsidiary.
US$25m in production payments based on a 3% net smelter returns ('NSR') royalty on production from the Nakomgo Exploration Permit area.
B2Gold and GAMS will retain a 0.5% NSR royalty with payments to commence after the US$25m production payments noted above. The 0.5% NSR royalty is capped at total of 1.5moz gold produced from the Nakomgo Exploration Permit area. The Burkina Faso government is entitled to a 10% free carried interest in the Toega deposit on grant of a mining licence as set out in the 2015 Mining Code. Ordinary shares in relation to point 2 above would be issued under the placement capacity permitted following listing rule 7.1 with the amount to be issued calculated on the 5-day trading VWAP prior to the completion date.
Cautionary statement
The estimates of Mineral Resources for the Toega deposit are qualifying foreign estimates under the ASX Listing Rules and are not reported in accordance with the JORC Code. Competent persons have not done sufficient work to classify the qualifying foreign estimates as Mineral Resources in accordance with the JORC Code. It is uncertain, that following evaluation and further exploration, the foreign estimates will be able to be reported as Mineral Resources in accordance with the JORC code.
About West African Resources
West African Resources Limited (ASX: WAF) announced the results of its updated Feasibility Study for the Sanbrado Gold Project in Burkina Faso in an announcement titled 'West African to produce 300Koz gold in Year 1 at Sanbrado' on 16 April 2019. The study envisages an initial 10-year mine life, including 6.5 years of underground mining, with Probable Reserves to 1.7 million ounces (21.6Mt at 2.4g/t gold). The project will have average annual production over the first 5 years of mine life of 217,000 ounces gold and a 14-month post-tax pay back on US$186 million pre-production capital costs. Project economics are robust, with AISC of
WEST AFRICAN RESOURCES LIMITED 
