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West African Resources Ltd
Symbol WAF
Shares Issued 270,301,498
Close 2014-07-30 C$ 0.135
Market Cap C$ 36,490,702
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West African Resources rehashes Q2 activities

2014-08-01 02:26 ET - News Release

An anonymous director reports

QUARTERLY ACTIVITIES REPORT

West African Resources Ltd. has provided an update on activities on its 100-per-cent-owned gold and copper-gold projects in Burkina Faso, West Africa, for the quarter ended June 30, 2014.

West African announced the results of a technical and financial assessment of a heap leach starter project on its Mankarga 5 project, Burkina Faso, on July 28, 2014. The scoping study evaluation, which was worked on largely during the June quarter and completed in July, was independently managed by engineering consulting firm, Mintrex Pty. Ltd., based in Perth, Western Australia, with input from a range of specialist consultants, and was completed to a plus/minus-35-per-cent input cost estimate.

Highlights:

Base case is stated on a pretax basis assuming 100-per-cent project at a gold price of $1,300 per ounce. All amounts are in U.S. dollars unless otherwise stated.

  • Internal rate of return of 57 per cent with a 16-month payback on capital costs;
  • Free cash flow of $103-million after capital costs;
  • Preproduction capital of $35-million plus working capital and contingency of $9-million;
  • Estimated average annual gold production of 59,400 ounces for first three years;
  • Estimated average annual gold production of 44,100 ounces for life of mine;
  • Current study mine life of 5.4 years;
  • Life-of-mine strip ratio at one to one;
  • Cash costs of $614 per ounce;
  • All-in sustaining cash costs of $685 per ounce (including cash costs, royalties, and refining and sustaining capital).

The release of the scoping study followed an update to the Mankarga 5 resource estimate on April 14, with an indicated resource increasing by 12 per cent (at a 0.5-gram-per-tonne cut-off) estimated at 10.8 million tonnes grading 1.3 g/t gold containing 437,000 ounces gold and an inferred resource increasing by 74 per cent (at a 0.5-gram-per-tonne cut-off) estimated at approximately 32.7 million tonnes grading 1.0 g/t gold containing 1.05 million ounces gold.

The company also completed metallurgical testwork during the quarter, which confirmed the carbon-in-leach potential of the Mankarga 5 deposit, with gold recoveries of up to 98.5 per cent and averaging 93.8 per cent in direct cyanidation testwork after 48 hours. This demonstrated that the mineralization is non-refractory and amenable to conventional milling and CIL processing.

Exploration completed during the quarter included diamond and oxide resource definition drilling at Mankarga 5.

A breakdown of drilling for the June quarter includes:

  • Diamond: nine holes for 1,670 metres;
  • Auger: 3,282 holes for 16,362 m;
  • Aircore: 347 holes for 12,182 m.

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