West African Resources delivers feasibility upgrade for Kiaka gold project in Burkina Faso

A feasibility update for West African Resources’ (ASX: WAF) US$447 million Kiaka gold development in Burkina Faso has incorporated a 7% increase in average annual gold production over the life of the mine to 234,000 ounces.

The new production figure replaces the 219,000oz of production stated in the original feasibility study released in August 2022 and highlights a consistent level of annual gold production above 200,000oz for 17 consecutive years.

Improved financial metrics for the project include US$3.4 billion in pre-tax free cash flow and a US$1.18b post-tax net present value with a 27% internal rate of return.

Owner-mining strategy

The Kiaka update is based on a mineral resource estimate of 285 million tonnes grading 0.9 grams per tonne for 7.9Moz gold (6Moz indicated and 1.9 Moz inferred from an open-pit model constrained at US$2,000/oz).

The probable ore reserve has increased to 4.8Moz gold (or 164Mt at 0.9 g/t at US$1,400/oz).

This incorporates a change from contract mining to a lower-risk owner-mining strategy, allowing West African Resources to realise greater benefits from the long life and consistent mining rates of the large-scale operation.

New equipment

The company will make a US$102.7m investment in new mining and ancillary equipment, as well as a spare parts inventory and fully-equipped mine maintenance facilities.

Larger 230-tonne excavators have been matched to 140t dump trucks compared to the 140t excavators and 95t trucks used in the original study, allowing for a 14% increase (or 3.3 Mtpa) in the annual mining rate.

Extensive metallurgical test work indicates the project will deliver life-of-mine gold recoveries of 90% at a nominal 100-micron grind size.

Reduced cost, lower risk

Chief executive officer Richard Hyde said the owner-mining strategy would reduce operating costs and lower production risks while providing secure employment and skills training for the local population.

“Our plan to use larger payload trucks and excavators is expected to increase our mining rate and drive US$293m in savings across the life of the mine,” he said.

“At a US$2,100/oz assumed gold price, Kiaka is expected to generate US$3.4b in pre-tax free cash flow and will pay back project development and mining fleet costs in just over two years.”

Mr Hyde said 50% of Kiaka’s development had been completed and the project was on schedule for first gold production in mid-2025.