News Press Releases

West African Confirms Sanbrado as +150,000 ounces per Annum Gold Producer by 2019

WFRSF | February 20, 2017

All amounts stated in US dollars. Base case is stated on a 100% project basis at $1,200/oz

Scarborough , Australia (FSCwire) -

anbrado 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 the 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%
	Project fully permitted - mining and environmental permits granted
	Camp and on-permit water storage construction underway
	Discussions with project lenders underway – targeting project financing through conventional debt and equity
	Ore reserves based on Indicated Resources only, delivered 6 months after M1 maiden resource
	and less than 12 months after M1 South high-grade discovery
Optimised definitive feasibility study (DFS) underway:
	Focussing on transition from pit to underground for M1 South
	Targeting significant boost to project economics by reducing high Y1-2 stripping costs
	Infill drilling targeting conversion of Inferred Resources within and beneath current ore reserve pit shells, and extensional drilling at M1 and M5
	Resource and reserve update M1 and M5
	Aiming for completion by Q3 2017, fully-funded from existing cash of $17 million

Full details, including a Table 1 as required by the JORC Code (2012) for the revised Mineral Resource and Mineral Reserve estimates, are included in the full report which is available for download from www.westafricanresources.com, www.asx.com.au and www.sedar.com.

Managing Director Richard Hyde commented:

“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 hand-picked independent consultants.

“M1 South is the driving force behind the new project economics and currently represents a high-margin, but high strip ratio open pit. Consequently, it is likely to be more cost effective to mine M1 South with a smaller open-pit followed by underground mining. Optimisation work and underground mining studies have commenced and will be included in an optimised definitive feasibility study by Q3 2017.

“The next steps are straight-forward – we are well-funded to carry out work programs, including completion of an underground optimisation study, which is likely to drive mining costs significantly lower with further drilling 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 construction of mine infrastructure including the camp and early site works.

“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 Sanbrado[1] Gold Project, Burkina Faso. The study envisages an initial 9 year mine life, with strong early cashflow and a rapid payback of capital.

[1] Formerly known as the Tanlouka Gold Project

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)
Production Costs¹ Y1-3	Average All-in Sustaining Costs (AISC) of $708/oz
Production Costs LOM	Average Cash Costs of $717/oz (including royalties)
Production Costs LOM	Average All-in Sustaining Costs (AISC) of $759/oz
IRR	Pre-tax IRR of 27% and 2.1 year payback on initial capital
IRR	After-tax IRR of 21% and 2.3 year payback on initial capital
NPV	Pre-tax NPV (5%) of $143M
NPV	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 Reserves^2,3	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.

Competent Persons and Qualified Persons Statement

Information in this announcement that relates to exploration results, exploration targets or mineral resources is based on, and fairly represents, information and supporting documentation prepared by Mr Brian Wolfe, an independent consultant specialising in mineral resource estimation, evaluation and exploration. Mr Wolfe is a Member of the Australian Institute of Geoscientists. Mr Wolfe has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person (or “CP”) as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) and a Qualified Person under Canadian National Instrument 43-101. Mr Wolfe has reviewed the contents of this news release and consents to the inclusion in this announcement of all technical statements based on his information in the form and context in which they appear.

Information in this announcement that relates to ore reserves is based on, and fairly represents, information and supporting documentation prepared by Mr Stuart Cruikshanks, an independent specialist mining consultant. Mr Cruikshanks is a Fellow of the Australian Institute of Mining and Metallurgy. Mr Cruikshanks has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person (or “CP”) as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) and a Qualified Person under Canadian National Instrument 43-101. Mr Cruikshanks has reviewed the contents of this news release and consents to the inclusion in this announcement of all technical statements based on his information in the form and context in which they appear.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

To view this press release as a PDF file, click onto the following link:
public://news_release_pdf/westafrican02202017.pdf
Source: West African Resources Ltd (TSX Venture:WAF)

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