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High-Grade Gold Hits Continue For WAF

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West African Resources (ASX: WAF, Share Price: $0.36, Market Cap: $174m) is one of our favourite African gold exposures. Operating in Burkina Faso since 2007, it ranks as the largest ASX-listed acreage holder within the country and has accelerated its progress towards production status via aggressive drilling, enhanced gold resource base and positive PFS results at its Sanbrado Project.

WAF has reported further high-grade results from the M1 deposit at its Sanbrado gold project - with M1 South drilling generating 0.5m at 280.3 g/t Au from 256 metres down-hole depth in diamond hole TAN17-DD128, whilst two wedge holes have also intercepted visible gold mineralisation (with assays awaited).

Market Significance

The two-year chart underlines WAF’s tremendous share price performance, surging from our initial coverage price of $0.08 in Sep 2015. It reflects growing market recognition of its high-grade Sanbrado project, reinforced by continuing strong diamond and RC drilling results. These positive results are set to flow through to a significantly-enlarged resource base, scheduled for release during Q3 2017. At the same time, the company is working on an optimised Feasibility Study that will incorporate enhanced project economics (incorporating open-pit and underground mining), based on robust drilling results.

Announcement Detail – Latest M1 & M5 Drilling Results

WAF has released diamond drilling results from two of its high-profile and most prospective gold deposits within its 100%-owned Sanbrado gold project in Burkina Faso – M1 and M5. We’ll cover the results from each prospect individually.

M1 Deposit

The M1 South drilling program that’s currently underway is aimed at providing scope for a resource upgrade, with the program now close to completion. Encouragingly, significant results have been returned from holes TAN17-DD028 and DD029 on sections SE0400 and SE0175, located northwest of previous high-grade results in TAN17-DD110A and DD111 (SE450 & SE425).

Some of the best results from the latest drilling include:

  • TAN17-DD117: 0.5 metres at 13.5 g/t Au from 221 metres
  • TAN17-DD123: 1.5 metres at 6.5 g/t Au from 176.5 metres and 3 metres at 4.1 g/t Au from 184 metres
  • TAN17-DD125: 1 metre at 8.0 g/t Au from 212 metres, 1.5 metres at 9.2 g/t Au from 265.5 metres and 0.5 metre at 8.1 g/t Au
  • TAN17-DD128: 2.5 metres at 58.9 g/t Au from 254 metres (including 0.5 metre at 280.3 g/t Au from 256 metres)
  • TAN17-DD129: 2.5 metres at 24.4 g/t Au from 162 metres (including 0.5 metre at 64.9 g/t Au from 163.5 metres)

Interestingly, two wedge holes off parent holes TAN17-DD110A and TAN17-DD111 (Sections SE0450 & 0425) have both intercepted visible gold mineralisation. Why is this important?

In our most recent coverage during June we advised that assay results from TAN17-DD111 included 21 metres at 53.13 g/t Au from 408.5 metres (including 0.5m at 1,613.41 g/t Au and 0.5m at 530.38 g/t Au) and 14.5 metres at 38.27 g/t Au from 459 metres. It represents the best hole so far in the 2017 drilling program. The fact that a wedge hole off TAN17-DD111 has intersected visible gold is therefore highly significant

Assays are still pending for a further eight holes at M1 South.

Technical Significance

Mineralisation remains open at depth across the 350 metres of strike of the M1 South deposit. Recent drilling at M1 South has been very successful in extending the depth of known mineralisation on section SE425 and SE450. High-grade mineralisation is open at depth on both sections and results are pending for more than 15 additional holes from M1 South between sections SE400 and SE100. All of this is clearly demonstrated in the graphic below, highlighting in particular the depth extent of gold mineralisation.

The share price chart below underlines WAF’s tremendous price performance over the past three months, particularly when compared to the relatively benign spot gold price. This price action reflects the robust gold grades being generated from the current M1 drilling program. The February 2017 open-pit Feasibility Study demonstrated robust economics, rapid pay-back of capital and simple metallurgy. However, it does not reflect the overall potential of the project, as demonstrated by the results of the recent drilling completed since the open-pit Feasibility Study was released.

In the open-pit feasibility study mine schedule, the recently discovered M1 South high-grade zone was effectively mined out during the first 2.5 years of the project. The current drilling program has defined mineralisation outside of the M1 South pit (the basis of the open-pit feasibility study) - and will likely result in a material increase in the mine life (both open-pit and underground).

M5 Deposit

Similarly, drilling at the M5 deposit has defined new mineralisation outside of the pit design used in the feasibility study, which will likely lead to an increase in the mineable resources at M5.

Diamond hole TAN17-DD118 on section SW800 has generated strong results, returning 36.5 metres at 2.5 g/t Au from 320 metres (including 0.5 metre at 49.5 g/t Au). Significantly, this result is located 150 metres beneath the proposed open-pit at M5.

TAN17-DD127 on section SW650 also intersected significant mineralisation including 37 metres at 2.4 g/t Au from 298.5 metres (including 1.5 metres at 18.1 g/t Au and 25.5 metres at 1.9 g/t Au from 341.5 metres). Significantly, mineralisation in TAN17-DD127 is located approximately 60 metres beneath the proposed M5 open-pit and approximately 60 metres up-dip of TAN17-DD102, which returned 77 metres at 5.3 g/t Au (including 27 metres at 12.26 g/t Au and 14 metres at 22.47 g/t Au).

The graphic below highlights the significance of these highly-mineralised gold intersections.

Given the elevated grades exhibited in 2017 M5 drilling, updated resources will have a positive impact on M5 open-pit reserves and result in an extension of the open-pit depth in the southern portion of the M5 deposit.

Technical Significance

WAF’s board considers it essential to define the various deposits before determining the optimal development strategy for Sanbrado. Whilst a material change in throughput or capital requirements is not envisaged, the company believes it would be premature to complete an optimised feasibility study (including an investigation of both open-pit and underground mining scenarios for M1 and M5), before mineralisation has been closed-off or drilled to a depth below which new mineralisation does not materially change project valuation (NPV).

Following the positive drilling results that have been received since the open-pit Feasibility Study was released, it will take longer to drill-out the existing deposits than originally anticipated. Therefore, WAF is focused on targeted drilling for the remainder of 2017, aimed at maximising the overall project NPV. The company will update resources during Q3 2017, based on results from the ongoing drilling program.

Follow-up drilling will be planned once all the results from the current program are received. It is anticipated that development scenarios will be analysed, leading to a revised open-pit and underground feasibility study and requests for proposals from project finance providers during H1 2018.


We initiated coverage of West African Resources around $0.08 during September 2015 – representing a current gain of 350%.

Results are pending from more than 16 diamond holes from both M1 and M5, whilst a further 16 holes have been completed at both deposits and are in the process of being logged and sampled. A further six holes remain to be completed as part of the current program for the Q3 resource update.

WAF currently has six rigs on site and is well-funded to complete all of its proposed work programs, with $28m in cash reserves.

View More Articles By Gavin Wendt

After a decade as a broking resources analyst with Intersuisse, Gavin helped establish the Fat Prophets Mining Report during 2005, writing and producing the report until he established MineLife during late 2010. He writes about mining and energy companies via his MineLife reports.

Disclaimer: Gavin Wendt, who is a director of Mine Life Pty Ltd ACN 140 028 799, compiled this document. It does not constitute investment advice. In preparing this report, no account was taken of the investment objectives, financial situation and particular needs of any particular person. Before making an investment decision on the basis of this report, investors and prospective investors need to consider, with or without the assistance of a securities adviser, whether the information is appropriate in light of the particular investment needs, objectives and financial circumstances of the investor or the prospective investor. Although the information contained in this publication has been obtained from sources considered and believed to be both reliable and accurate, no responsibility is accepted for any opinion expressed or for any error or omission in that information.



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