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West African again in focus as a target
A NEW discovery up the road from West African Resources’ Sanbrado project in Burkina Faso has again highlighted the potential for consolidation in the area.
Kristie Batten26 Feb 20188:25 News

GoldM&A 2018B2Gold Corp Bell Potter Securities Macquarie West African ResourcesBurkina Faso
On Thursday night, Canada’s B2Gold reported a positive initial inferred resource estimate of 17.5 million tonnes at 2.01 grams per tonne gold for 1.13 million ounces of gold for its Toega project in Burkina Faso.
The project’s mineralised zone extends 1200m along strike, is 430m wide and up to 400m deep, with the zone open along strike to the northeast and down-dip.
B2Gold said early indications suggest the potential for an open pit.
Macquarie was impressed by the resource, with it beating grade expectations.
“We think B2Gold could have a tiger by the tail with its Toega discovery in Burkina Faso,” analysts said.
“Given its Hemlo-type characteristics and lateral/depth new drilling discoveries, we see high potential for a new gold district.
“This discovery is a testament to the exploration prowess and technical firepower of B2Gold’s exploration team – one of the best in the world in our opinion as led by VP exploration Tom Garagan.”
Importantly, Toega is only around 10km from West African’s Sanbrado project and around 40km from Orezone’s 4Moz Bombore project.
“We think this area of Burkina Faso could be ripe for consolidation over the next few years,” Macquarie said.
Mark Connelly is the chairman of West African and is no stranger to B2Gold.
He sold his former company Papillon Resources to B2Gold for $615 million in 2014, and remained on the board of the Toronto-listed company until mid-2016.
Fekola, the 5.15Moz Mali project acquired in the Papillon takeover, started production late last year, producing 111,450 ounces of gold in its first few months after a US$515 million build.
Gold production from Fekola this year is expected to be more than 400,000oz at all-in sustaining costs of $609 an ounce, making it one of West Africa’s largest gold mines.
B2Gold said with Fekola built and running, it is looking to 2018 as a year of transformational growth.
Meanwhile, West African’s feasibility study for Sanbrado has been delayed due to the discovery of the M1 South deposit.
An open pit feasibility study released a year ago highlighted a $131 million, nine-year operation producing 150,000ozpa at AISC of $708/oz in the first three years.
The current study, which will also include an underground mine, will be completed by mid-2018 and be “significantly improved”.
The company is continuing exploration on the 2.8Moz project, with results released earlier this month including 14m at 39.33gpt gold from 448.5m, including 0.5m at 860gpt gold at M1 South.
Following the release of the results, Bell Potter Securities analyst Duncan Hughes described West African as an “excellent and undervalued exploration story”.
“At Sanbrado we assume a 10-year 2.5Mtpa CIL project utilising underground and open pit ore to produce an average of 160,000ozpa LOM at AISC of circa A$900/oz,” he said.
West African is already one of Macquarie’s high conviction top developer picks for 2018.
Shares in West African were unchanged at A39c this morning, valuing the company at $226 million.