Aspiring gold producer West African Resources (ASX: WAF) will move to the next stage of development on the high-grade Sanbrado discovery in central Burkina Faso after a recent updated feasibility study demonstrated the viability of the planned US$185 million, high-margin operation.
The study, which follows on from West African’s 2017 CIL feasibility, also confirmed a substantial increase in probable reserves and average annual production rates, paving the way for the junior explorer to advance to project scoping stage with a view to becoming one of the first movers in the emerging gold district.
The Sanbrado deposit is located over 116 square kilometres approximately 90 kilometres east-southeast of Ouagadougou, and comprises the high-grade M1, M3 and M5 deposits which will be mined via open pit and underground methods.
It is considered the highest grade deposit of its kind in the gold-endowed Burkina Faso region, which hosts a total of more than 14 million ounces of undeveloped resources.
The updated feasibility study, based on a gold price of US1300 per ounce, outlined a probable reserve at Sanbrado of 1.6 million ounces gold (20.4 million tonnes at 2.4 grams per tonnes gold) – a significant increase on the company’s previously-stated probable of 894,000oz (16.8Mt at 1.7g/t gold).
Forecast average annual production has also been updated from 150,000oz gold per year over the first three years of the project, to 211,000oz per year over the first five years of a planned initial 11-year mine life.
West African Resources managing director Richard Hyde told an investor conference this month that his company is well positioned to move forward on development, with studies also showing the potential for early cashflow and rapid payback of capital.
“This project is developing into world-class gold mine just two years after discovery of a high-grade zone at M1 South and the maiden resource which we released in mid-2016,” he said.
“We are still drilling and we expect further improvements to the project’s economics and mine schedule before year end given the zones of mineralisation are open at depth and along strike.
“Additionally, we have 1000 square kilometres of regional exploration targets surrounding Sanbrado and we plan to turn our attention to some of those targets after the current wet season.”
Shares in West African Resources closed at $0.35 on Friday, up 14.75% for the week.