Sanbrado Project

Overview

Sanbrado Gold Project

West African Resources (ASX: WAF) has commenced construction of its Sanbrado Gold Project, a high-grade gold discovery in Burkina Faso, West Africa. First gold from Sanbrado is expected in 2020, and an April 2019 optimised feasibility study confirmed the project will produce 301,000oz gold in Year 1.

Sanbrado highlights:

  • 200,000oz per annum gold production
  • Fully permitted and funded to production
  • First gold pour expected H2 2020
  • Low cost, high margin operation
  • Conventional open-pit and underground mining operation
  • Significant upside potential could extend initial 11-year mine life.

An optimised feasibility study for Sanbrado completed in April 2019 confirmed:

  • Year 1 production 301,000oz gold from underground and open pit ores at All-In Sustaining Costs of US$497/oz
  • Average annual production of 217,000 ounces gold over first five years of mine life, and 153,000oz gold over current 10-year life of mine
  • M1 South underground mine life extended to 6.5 years (2.0Mt at 10.2 g/t Au for 645,000oz gold)
  • Probable Reserves increased to 1.7 million ounces (21.6Mt at 2.4g/t gold)
  • Reduction in post-tax pay back to 14 months on US$186 million pre-production capital costs
  • All-In Sustaining Costs of US$563 (A$793)/oz over first 5 years and US$633 (A$892)/oz over life of mine
  • Post-tax NPV5% increased to US$444m (A$626m) at post-tax IRR of 62.1%.

Sanbrado is fully funded and construction commenced, all long-lead items ordered, first gold pour scheduled for Q3 2020.

Background

The Sanbrado Gold Project is 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 June 2018, West African received an updated Mining Permit from the Government of Burkina Faso which included updates to processing and mining methods.  Construction of the Project commenced in late 2018 and is scheduled to pour first gold in Q3 2020.

The Sanbrado Gold Project Mineral Resource Estimates (MRE) were updated by independent resource consultants International Resource Solutions Pty Ltd (IRS) as part of West African’s April 2019 optimised feasibility study and were reported in accordance with NI 43-101 standards and JORC (2012) guidelines.  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 current Sanbrado Gold Project MRE is 39.4Mt at 1.9 g/t Au for 2.41Moz Au (Indicated), and 15.7Mt at 1.3 g/t Au for 0.68Moz Au (Inferred). 

The Sanbrado Gold Project ore reserves were updated in the April 2019 study to a Probable Ore Reserve of 21.6Mt at 2.4g/t Au for 1.65Moz of gold. 

Sanbrado Gold Project – April 2019 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 <100m 0.5 850,000 6.4 178,000 50,000 5.2 5,000
U/G >100m 3.0 1,000,000 21.9 697,000 300,000 11.2 117,000
Total Combined 1,850,000 14.7 875,000 350,000 10.7 122,000
M5 O/P 0.5 36,650,000 1.2 1,470,000 14,600,000 1.1 520,000
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 39,400,000 1.9 2,405,000 15,650,000 1.3 684,000

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.

Underground mining is completed in Year 6 of gold production. Open pit mining continues through until mid-way through Year 10 of production with processing carried out for a full 10 years.  Mining and processing of the high grade M1 South Probable Ore Reserve is prioritised, generating significant early cashflow.

Tenure & Permitting

In April 2018, the Burkina Faso Ministry of the Environment, Green Economy and Climate Change approved the updated Environmental and Social Impact Assessment (ESIA) and Resettlement Action Plan (RAP) for the Sanbrado Gold Project. Sanbrado will be operated to both Burkinabé and internationally recognised environmental and social standards, in particular the Performance Standards of the International Finance Corporation (IFC). The updated ESIA reflected the proposed processing change from heap leach to carbon in leach extraction, and addition of underground mining to the overall mine plan. 

The Council of Ministers of the Government of Burkina Faso also approved changes to the original mining permit for the Sanbrado Gold Project, encompassing revised mining and ore processing methods, detailed in the June 2018 updated feasibility study. The updated mining permit approves changes to include underground mining in addition to open pit mining and approves using the carbon in leach (CIL) processing method.

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

West African updated all estimates for Mineral Resources as part of the April 2019 optimised feasibility study, reported in accordance with NI 43-101 standards and JORC (2012) guidelines.  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 current Sanbrado Gold Project MRE is 39.4Mt at 1.9 g/t Au for 2.41Moz Au (Indicated), and 15.7Mt at 1.3 g/t Au for 0.68Moz Au (Inferred).

Sanbrado Gold Project – April 2019 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 <100m 0.5 850,000 6.4 178,000 50,000 5.2 5,000
U/G >100m 3.0 1,000,000 21.9 697,000 300,000 11.2 117,000
Total Combined 1,850,000 14.7 875,000 350,000 10.7 122,000
M5 O/P 0.5 36,650,000 1.2 1,470,000 14,600,000 1.1 520,000
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 39,400,000 1.9 2,405,000 15,650,000 1.3 684,000

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 were updated in the April 2019 study to a Probable Ore Reserve of 21.6Mt at 2.4g/t Au for 1.65Moz of gold.

 

  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).  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.