Sanbrado Project

Overview

Sanbrado Gold Project – Open Pit and Underground Feasibility Study – Press Release dated 22 June 2018

The Sanbrado Gold Project is located approximately 90km east-southeast of Ouagadougou, the capital of Burkina Faso.  The Project covers an aggregate area of 116km², comprising one granted mining permit and one granted exploration licence.  WAF has a 90% interest in the Sanbrado Gold Project.  The Government of Burkina Faso has a free-carried 10% interest in the Project.  In March 2018, the Company received environmental approval for Carbon in Leach Processing.

The Sanbrado Gold Project Mineral Resource estimates were updated by independent resource consultants International Resource Solutions Pty Ltd (IRS) as part of this Study and were reported in accordance with NI 43-101 standards and JORC (2012) guidelines.  Mineral resources have been estimated in accordance with JORC standards.  Four separate mineral resources have been estimated for the Project consisting of Mankarga 1 North (M1 North), Mankarga 1 South (M1 South), Mankarga 3 (M3) and Mankarga 5 (M5).  The Sanbrado Gold Project Mineral Resource is summarised below with an effective date of 22 June 2018.  Mineral resources are inclusive of mineral reserves.

Sanbrado Gold Project – June 2018 Resource
 
    Cutoff
(Au g/t)
Indicated Resource Inferred Resource
Tonnes Grade
(Au g/t)
Au Oz Tonnes Grade
(Au g/t)
Au Oz
M1 South O/P <120m 0.5 800,000 6.6 170,000 50,000 4.8 10,000
U/G >120m 3.0 750,000 25.5 620,000 250,000 7.6 60,000
Total Combined 1,550,000 15.9 780,000 300,000 6.9 70,000
M5 O/P 0.5 37,150,000 1.3 1,510,000 12,800,000 1.1 450,000
M1 North O/P 0.5 750,000 2.0 50,000 500,000 2.0 30,000
M3 O/P 0.5 150,000 2.0 10,000 200,000 1.5 10,000
Total Combined 39,600,000 1.8 2,350,000 13,850,000 1.2 550,000

Note: Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

The Sanbrado Gold Project ore reserves have been updated in this Study to a Probable Ore Reserve of 20.4Mt at 2.4g/t Au for 1,574,000 ounces of gold.  The Project comprises several open pits, all within
1-2km of the plant site, and an underground mine accessed through portal at the south-eastern end the M1 South open pit.  The plant comprises a conventional SABC milling circuit, gravity and carbon in leach processing with a nominal throughput capacity of 2Mtpa.  The Project has an initial mine life of 11 years.

Underground mining is completed in Year 5 but open pit mining and processing continues until Year 11. Mining and processing of the high grade M1 South Probable Ore Reserve is prioritised, generating significant early cashflow.

The estimated operating costs for the project highlight that the project will be a conventional, low cost and high margin operation with LOM All in Sustaining Costs (AISC) of US$640/oz.  This is a result of the significant proportion of oxide and transition material in the mine schedule and the free milling nature of all ore types (average LOM recovery of 92.9%), low reagent consumption and a high component of gravity recoverable gold.

Mintrex has built up the capital cost estimate to provide current costs to assess the economics of the project and to provide the initial control of capital expenditure.  The estimated project capital cost is US$185 million, inclusive of all open-pit and underground pre-production mining & development costs, contingencies, duties & taxes.

At the base case gold price of US$1,300/oz and using a 5% discount rate, the project generates a pre-tax NPV of US$567M and IRR of 62% and a post-tax NPV of US$405M, an IRR of 49% with a post-tax payback period of 16 months following commissioning.

The work program for 2018 includes:

  • Further infill drilling on 25m by 25m centres converting existing Inferred Resources within and beneath reserves at M1 and M5.
  • Diamond drilling targeting ‘open at depth’ extensions and high-grade shoots at M1 and M5.
  • Optimisation studies have commenced and will investigate the potential to increase throughput by upgrading crushing or milling capacity later in the mine schedule.
  • Early works including upgrading camp facilities and water storage in preparation for construction

Tenure & Permitting

A Resettlement Action Plan (RAP) and the Environmental and Social Impact Assessment (ESIA) were approved in the September 2016 quarter by Burkina Faso’s Ministry of Environment, Green Economy and Climate Change.

In December 2016, the Burkina Faso Ministry of the Environment, Green Economy and Climate Change approved the ESIA for the Project.

The Burkina Faso Ministry of the Environment, Green Economy and Climate Change approved the updated ESIA for the Sanbrado Gold Project in March 2018.  In January 2017 the government of Burkina Faso Council of Ministers approved the Sanbrado Mining Permit application, which covers an area of 25km².  WAF expects to receive a reissued mining permit reflecting the updated ESIA in Q2 2018.  

 

Geology

Sanbrado is located within a northeast-trending volcano-sedimentary belt that is bounded to the east by the Tiébélé-Dori-Markoye Fault, one of the two major structures subdividing Burkina Faso into three litho-tectonic domains. The Sanbrado deposit is associated with the Lower Proterozoic system of the Birimian (2.17-2.18 billion years) comprising metavolcanic (arc) and metasedimentary (basin) rocks.

Gold mineralisation in the project area is associated with quartz vein and veinlet arrays, silica, sulphide and carbonate-albite, tourmaline-biotite alteration. Gold is free and is mainly associated with minor pyrite, chalcopyrite and arsenopyrite disseminations and stringers.

Regional Geology, Eastern Burkina Faso

Resources

Comparison with Previous Estimate

The tables below show the June 2018 and December 2017 Mineral Resources tabulated using the same cutoff grades.  Both resource estimates were constrained within conceptual Whittle pit shells generated using identical input parameters.  Key differences between the two estimates include re-classification of Inferred to Indicated at all deposits due to infill drilling and refinement and extension of high grade domains at M1 South.

Sanbrado Gold Project – June 2018 Resource
 
    Cutoff
(Au g/t)
Indicated Resource Inferred Resource
Tonnes Grade
(Au g/t)
Au Oz Tonnes Grade
(Au g/t)
Au Oz
M1 South O/P <120m 0.5 800,000 6.6 170,000 50,000 4.8 10,000
U/G >120m 3.0 750,000 25.5 620,000 250,000 7.6 60,000
Total Combined 1,550,000 15.9 780,000 300,000 6.9 70,000
M5 O/P 0.5 37,150,000 1.3 1,510,000 12,800,000 1.1 450,000
M1 North O/P 0.5 750,000 2.0 50,000 500,000 2.0 30,000
M3 O/P 0.5 150,000 2.0 10,000 200,000 1.5 10,000
Total Combined 39,600,000 1.8 2,350,000 13,850,000 1.2 550,000

Note: Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

Sanbrado Gold Project – October 2017 Resource
 
    Cutoff
(Au g/t)
Indicated Resource Inferred Resource
Tonnes Grade
(Au g/t)
Au Oz Tonnes Grade
(Au g/t)
Au Oz
M1 South O/P <120m 0.5 730,000 6.8 161,000 70,000 5.1 11,000
U/G >120m 3.0 470,000 26.4 395,000 350,000 16.1 180,000
Total Combined 1,200,000 14.4 556,000 410,000 14.4 191,000
M5 O/P 0.5 35,890,000 1.3 1,461,000 11,950,000 1.1 412,000
M1 North O/P 0.5 780,000 1.9 49,000 660,000 1.9 41,000
M3 O/P 0.5 170,000 2 11,000 260,000 1.4 12,000
Total Combined 38,040,000 1.7 2,077,000 13,280,000 1.5 656,000

Note: Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

  Competent Persons and Qualified Persons Statement

Information 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 the news release dated 22 June 2018  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.