Sanbrado Project
Sanbrado Gold Project
West African Resources Limited is a gold exploration company dedicated to creating shareholder value through the acquisition, exploration and development of projects in West Africa.
Major construction works commenced on its Sanbrado Gold Project in early 2019. Sanbrado is fully-funded to production with over A$78m raised in equity and US$200m senior debt in 2018.
Sanbrado highlights:
- +200,000oz per annum gold production
- Fully permitted and funded to production
- First gold pour expected mid-2020
- Low cost, high margin operation
- Conventional open-pit and underground mining operation
- Significant upside potential could extend initial 10-year mine life.
An optimised feasibility study for Sanbrado completed in April 2019 at US$1300/oz 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. West African has a 90% interest in the Sanbrado Gold Project with the Government of Burkina Faso holding a free-carried 10% interest.
In June 2018, West African received an updated Mining Permit from the Government of Burkina Faso. Construction of the Project commenced in late 2018 and is scheduled to pour first gold in mid-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.
Currently there are 6 years of underground reserves, with potential of depth extensions. TAN18-DD228 was drilled in late 2018 200m beneath the current underground ore reserve and returned 25m at 15 g/t Au from 862m including 5.5m at 40.4 g/t Au. The project currently has just over 10 years of open-pit ore reserves.
Open-pit reserves have been calculated at US$1200/oz. Mining and processing of the high grade M1 South Probable Ore Reserve is prioritised, generating significant early cashflow.
Exploration near Sanbrado
Moktedu
The Moktedu prospect is located less than 20km north of the Sanbrado Gold Project. The prospect covers 10km of strike and is confined within a northeast trending regional shear. The prospect is also 2km northeast of Orezone Gold Corporation’s (TSX: ORE) Bomboré gold deposit and encompasses portions of the Zam, Zam Sud and Goudre permits.
High-grade RAB results from West African’s 2011 drilling at the prospect over a strike of 3km are shown below.
| Selected Significant RAB Results – Moktedu Prospect | ||||||||||
| Hole | From | To | Int | Au g/t | North | East | RL | Dip | Azi | Depth |
| MKRAB0069* | 20 | 33 | 13 | 4.6 | 737041 | 1356842 | 288 | -60 | 315 | 33 |
| MKRAB0144 | 24 | 28 | 4 | 2.63 | 736424 | 1356320 | 288 | -60 | 315 | 31 |
| MKRAB0169 | 0 | 23 | 23 | 0.99 | 737396 | 1357056 | 286 | -60 | 315 | 23 |
| MKRAB0178 | 0 | 28 | 28 | 9.22 | 737036 | 1356848 | 289 | -60 | 315 | 38 |
| MKRAB0200 | 16 | 32 | 16 | 2.02 | 737534 | 1357189 | 285 | -60 | 315 | 32 |
| MKRAB0217* | 4 | 17 | 13 | 3.16 | 737172 | 1356991 | 286 | -60 | 315 | 17 |
| MKRAB0404 | 12 | 20 | 8 | 10.67 | 737884 | 1357985 | 285 | -55 | 315 | 32 |
| ZSRAB0056 | 8 | 28 | 20 | 5.27 | 733191 | 1353367 | 277 | -60 | 135 | 34 |
| ZSRAB0060 | 16 | 20 | 4 | 4.22 | 733231 | 1353335 | 275 | -60 | 135 | 24 |
| ZSRAB0099 | 28 | 33 | 5 | 5.81 | 733438 | 1354225 | 275 | -60 | 135 | 33 |
Follow-up work was carried out during the 2011-2012 field seasons; this work included aircore, RC and diamond drilling over the central 2km portion of the prospect.
Significant results for shallow aircore, RC and diamond drilling are shown below.
| Selected Significant Aircore Results >0.5 g/t Au – Moktedu Prospect | ||||||||||
| Hole | From | To | Int | Au g/t | North | East | RL | Dip | Azi | Depth |
| KOAC0098 | 0 | 6 | 6 | 2.32 | 737027 | 1356855 | 293 | -60 | 135 | 34 |
| KOAC0099 | 4 | 8 | 4 | 8.39 | 737038 | 1356842 | 293 | -60 | 135 | 40 |
| KOAC0113 | 0 | 20 | 20 | 0.64 | 737391 | 1357061 | 287 | -60 | 135 | 24 |
Deeper diamond and RC drilling focused on the central portion of the Moktedu auger anomaly and targeted depths between 100m and 150m.
| Selected Significant RC & Diamond Results >0.5 g/t Au – Moktedu Prospect | ||||||||||
| Hole | From | To | Int | Au g/t | North | East | RL | Dip | Azi | Depth |
| KORC0001 | 0 | 5 | 5 | 9.99 | 737028 | 1356851 | 295 | -60 | 315 | 50 |
| KORC0002 | 5 | 17 | 12 | 1.58 | 737043 | 1356838 | 287 | -60 | 315 | 59 |
| KORC0014 | 33 | 36 | 3 | 7.64 | 737016 | 1356874 | 288 | -60 | 315 | 70 |
| KORC0019 | 28 | 30 | 2 | 4.23 | 737576 | 1357154 | 284 | -60 | 315 | 60 |
| KORC0026 | 43 | 45 | 2 | 10.41 | 737124 | 1357040 | 290 | -55 | 135 | 150 |
| KORC0033 | 55 | 57 | 2 | 5.7 | 737476 | 1357249 | 286 | -55 | 135 | 102 |
| KORC0033 | 74 | 79 | 5 | 4.25 | 737476 | 1357249 | 286 | -55 | 135 | 102 |
| KODT004 | 121 | 142 | 21 | 1.13 | 736971 | 1356909 | 289 | -60 | 135 | 150,5 |
| KODT005 | 74 | 80 | 6 | 5.78 | 737342 | 1357103 | 290 | -60 | 135 | 110,3 |
Meguet and Fatmatenga
The Meguet and Fatmatenga prospects are located in the northeastern corner of the Zam permit near the town of Meguet, some 25km northeast of the Sanbrado Gold Project. Auger drilling was completed over Meguet and Fatmatenga as part of the regional auger programme covering the northern parts of the Zam permit on a 400m by 100m sample spacing. A further infill auger programme was carried out on a 25m by 100m sample spacing and delineated northeast and east-northeast mineralised trends.
WAF completed drilling across the prospects – the best RC and diamond drilling intercepts are shown in the table below.
| Selected Significant RAB Results – Meguet Prospect | ||||||||||
| Hole | From | To | Int | Au g/t | North | East | RL | Dip | Azi | Depth |
| MRAB0182 | 0 | 10 | 10 | 7.67 | 747201 | 1372986 | 318,6 | -60 | 180 | 10 |
| MRAB0183 | 0 | 10 | 10 | 2.77 | 747200 | 1372977 | 318,4 | -60 | 180 | 10 |
| MRAB0202 | 0 | 20 | 20 | 0.7 | 747119 | 1373058 | 320,1 | -55 | 180 | 20 |
| MRAB0220 | 8 | 16 | 8 | 1.36 | 747119 | 1372866 | 316,9 | -55 | 180 | 20 |
| MRAB0235 | 8 | 12 | 4 | 4.4 | 747006 | 1373044 | 319,2 | -55 | 135 | 20 |
| MRAB0258 | 0 | 15 | 15 | 0.96 | 747146 | 1372902 | 319 | -55 | 135 | 15 |
| MRAB0288 | 0 | 24 | 24 | 1 | 747129 | 1373056 | 320 | -55 | 135 | 24 |
| MRAB0317 | 0 | 12 | 12 | 1.59 | 747110 | 1373219 | 318 | -55 | 135 | 19 |
| MRAB0319 | 28 | 32 | 4 | 3.92 | 747128 | 1373202 | 321 | -55 | 135 | 32 |
| MRAB0334 | 16 | 24 | 8 | 1.98 | 747260 | 1373073 | 319 | -55 | 135 | 28 |
| MRAB0355 | 4 | 12 | 8 | 1.47 | 747279 | 1372984 | 322 | -55 | 180 | 18 |
| MRAB0407 | 20 | 32 | 12 | 1.47 | 747037 | 1372685 | 313 | -55 | 180 | 32 |
| MRAB0443 | 0 | 20 | 20 | 0.8 | 746960 | 1372695 | 318 | -55 | 180 | 24 |
| MRAB0445 | 28 | 36 | 8 | 2.1 | 746959 | 1372666 | 320 | -55 | 180 | 39 |
| MRAB0627 | 12 | 16 | 4 | 4.34 | 747680 | 1373511 | 326 | -55 | 180 | 32 |
| Selected Significant RC and Diamond Results >0.5 g/t Au – Meguet Prospect | ||||||||||
| Hole | From | To | Int | Au g/t | North | East | RL | Dip | Azi | Depth |
| MDH002 | 42 | 56 | 14 | 0.89 | 747203 | 1373051 | 318 | -55 | 180 | 100,4 |
| MDH005 | 49 | 51 | 2 | 8.87 | 747320 | 1373268 | 317 | -55 | 180 | 147 |
| MRC012 | 56 | 64 | 8 | 10.37 | 750084 | 1375307 | 318,4 | -55 | 360 | 70 |
| MRC020 | 17 | 23 | 6 | 3.14 | 750082 | 1375404 | 319,4 | -55 | 360 | 48 |
| MRC020 | 34 | 38 | 4 | 2.76 | 750082 | 1375404 | 319,4 | -55 | 360 | 48 |
| MRC022 | 28 | 34 | 6 | 2.46 | 749999 | 1375323 | 315,7 | -55 | 180 | 42 |
| MRC023 | 26 | 29 | 3 | 4.72 | 750001 | 1375341 | 316,3 | -55 | 180 | 54 |
| MRC044 | 37 | 45 | 8 | 2.52 | 747439 | 1373342 | 317 | -55 | 180 | 54 |
| MRC100 | 9 | 12 | 3 | 6.08 | 750040 | 1375378 | 318,8 | -60 | 180 | 50 |
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 in April 2018. 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. In July 2019 West African announced that the Mining Convention was approved for Sanbrado. The Mining Convention is the final major permitting milestone and sets out the fiscal and legal terms with respect to the development and operation of the Sanbrado Gold Project. The Mining Convention has been issued in accordance with the 2015 Burkina Faso Mining Code, details of which were reported in the Feasibility Study release (ASX 16/4/2019) and in the NI 43-101 Technical Report dated 25 March 2019. The convention is valid for the current 10-year mine life and can be renewed for additional of five year periods.
Sanbrado is located within a northeast-trending volcano-sedimentary belt that is bounded to the east by the 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 (2.1-2.2 billion years) comprising granites, metavolcanics and metasedimentary rocks.
Gold mineralisation in the project area is associated with shearing, quartz veining and silica, sulphide and carbonate-albite, tourmaline-biotite alteration. Gold is free and is mainly associated with minor sulphides including pyrite, chalcopyrite and arsenopyrite.
Regional Geology, Eastern Burkina Faso
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 | Indicated Resource | Inferred Resource | ||||||
| (Au g/t) | Tonnes | Grade | Au Oz | Tonnes | Grade | Au Oz |
||
| (Au g/t) | (Au g/t) | |||||||
| 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.