Gold developer West African Resources Ltd reports that the Council of Ministers of the Government of Burkina Faso has approved changes to the original mining permit for the Sanbrado gold project which encompass revised mining and ore processing methods detailed in the latest feasibility study announced in June 2018. The updated mining permit approves changes to include underground mining in addition to open pit mining, and approves using the CIL processing method.
Receipt of the updated mining permit completes another key milestone for the company and follows the government of Burkina Faso’s environmental approval for the Sanbrado project in April 2018.
Managing Director Richard Hyde commented: “We have now completed the major permitting milestones for Sanbrado. We thank the government of Burkina Faso and local stakeholders for their continued support.
“We are continuing to drill at M1 South and M5 and will release updated resource estimates and a scoping study investigating M5 underground potential by the end of Q3 2018.
“We expect to appoint a banking syndicate to fund the majority of the project capital requirement by the end of Q4 2018.”
The Sanbrado updated open pit and underground feasibility study confirms, stated on a 100% project basis at $1,300/oz gold:
•Average annual production of 211,000 oz gold over first five 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.
The Mineral Resource Estimate (MRE) upgrade includes:
•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.
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.
Sanbrado is located approximately 90 km east-southeast of Ouagadougou, the capital of Burkina Faso. The project covers an aggregate area of 116 km², comprising one granted mining permit and one granted exploration licence. WAF has a 90% interest in the project. The Government of Burkina Faso has a free-carried 10% interest.