West African Resources Managing Director Richard Hyde: “The updated feasibility study confirms that Sanbrado is a high margin gold project, producing 211,000 oz/y at AISC of $551/oz over the initial five years of mine life. The project is robust, generating an after-tax IRR of 49% and paying back capital in less than 16 months.
“Recent high-grade intercepts including 11 m at 10.5g/t Au and 6 m at 24.4g/t Au in TAN18-DD189, located 70 m beneath current resources and reserves, provide scope to improve project value further. A scoping study has also commenced focussing on the underground potential of M5. Drilling at M1 South and M5 is ongoing, with further resource and reserve updates expected by year end.
“Discussions with project financiers are underway and the company expects to be in a position to appoint a banking syndicate by Q4 2018.”
Sanbrado updated feasibility study confirms:
• Average annual production of 211,000 oz gold over first 5 years of mine life
• 76% increase in Probable Reserves to 1.6 Moz (20.4 Mt at 2.4g/t Au)
• 16 month post-tax pay back on $185 million pre-production capital costs
• All-In Sustaining Costs (AISC) of $551/oz over first five years and $640 over life of mine
• Pre-tax NPV5% of $567 million (A$754 million) and pre-tax IRR 62%
• Post-tax NPV5% of $405 million (A$540 million) and post-tax IRR 49%
• Environmental approval granted, updated mining licence expected Q3 2018
• Discussions with project lenders in progress, debt package expected by end Q4 2018
• 40% increase in Indicated Resources at M1 South to 780,000oz gold, (1.5 Mt at 15.9g/t Au)
• Project MRE now 2.35 Moz gold Indicated, 0.55 Moz gold Inferred.
There is substantial further upside to project through:
• Recent high-grade beneath reserves shows scope to extend life past 4.5 years at M1 South
• Scoping study to investigate underground potential of M5
• Potential to increase plant throughput and compress mining schedule in later years.
The Sanbrado gold project is located approximately 90 km east-southeast of Ouagadougou, the capital of Burkina Faso. It covers an aggregate area of 116 km², comprising one granted mining permit and one granted exploration licence. WAF has a 90% interest in the Sanbrado project. The Government of Burkina Faso has a free-carried 10% interest in the project. In March 2018, the companyreceived environmental approval for CIL processing.
