MNN Awards: Ongoing bonanza success for West African Michael Quinn MNN Awards: Ongoing bonanza success for West African
SEVEN years of geological persistence, skill and belief are rapidly coming together over the past 12 months in Burkina Faso for West African Resources and its unassuming managing director Richard Hyde, with the pragmatic and successful junior explorer enjoying ongoing, high grade gold drill hits that point towards a substantial new low cost mine development next year.
The recent deeper drilling of the game-changing M1 South deposit at West African’s Sanbrado project suggests a plus-200,000 ounce per annum operation producing gold at costs of less than US$500 per ounce could be in the frame.
The 2017 drilling has been hitting “extremely high grades over significant widths”, and is superseding a fully permitted open cut development at Sanbrado that was previously set to be financed this year.
A new resource for M1 South is due in the current quarter, with a current resource totalling about 300,000oz grading between 7.2-8.6 grams per tonne – inside a total of more than 2 million ounces at Sanbrado including 1.3Moz in the indicated category.
However investors have unsurprisingly been becoming very interested in M1 South when it’s noted that the high grade resources within the circa 300,000oz totals 246,000oz at a bit more than 1oz to the tonne!
And the belief is there could be plenty more to come.
A raising last month brought in more than C$17 million from Canada, with new shares issued at a level near the stock’s high points over the past five years.
Hyde and his West African team now have around A$35 million at their disposal to drill out M1 South and other deposits and prospects in the region, as the company moves towards development.
The decision to change tack last month and revisit development scenarios next year after the potential of M1 South is more fully explored is in keeping with the pragmatic, logical nature of the company since listing in 2010.
Back then comments in the sector about drill rig shortages and exorbitant rates in the West African region weren’t uncommon.
Hyde and his team decided to put together their own fleet of drills, and West African now has auger rigs, a RAB rig and multi-purpose RC-diamond rigs – augmenting the use of contractor rigs.
Ditto, when assay turnarounds became impractically long, WAF secured the use of an independent sample prep laboratory in Burkina Faso and airfreight samples to Perth for analysis.
And when the opportunity came to do a deal in 2013 with a Canadian junior who had promising ground next door, the deal was done.
Voila, West African outlines a heap leach project in 2014 and makes the discovery of mineralisation at a prospect called M1 in late 2015.
Ongoing drilling success then lead to a changed, upgraded plan, with the heap leach development scenario replaced by a conventional CIL development and West African targeting completion of a feasibility study by the end of 2016.
However drilling success in the second half of 2016 at M1 South saw a decision to optimise the feasibility work.
Strong drill hits in March, April, May and June again forced West African’s hand – in a good way! – with high grade mineralisation being hit a depths more than twice as deep as the reserve.
As a result, development scenarios have been put on hold until next year.
On current analyst forecasts from the likes of Canadian resource sector investment firm Sprott, M1 South has a lot of potential left in it.
The current resource is to a depth of 190m while results to date though have outline mineralisation to 350m depth – leading Sprott to suggest West African already has 420,000oz “in the bag”.
Sprott believes 560,000oz could be outlined (to 450m depth) in the next formal estimate, and on a “pro-rata” basis sees a fraction under 1Moz possible to a depth of 750m depth.
And should mineralisation continues to the life-of-mine mine plan depth of 1050m depth that Burkina Faso gold miner Roxgold is implementing, M1 South reaches 1.4Moz.
Clearly there’s a lot of arm-waving and big assumptions being made in all that.
But West African has been continually coming up with the goods, with last month’s 21m grading 53.13gpt the best hit to date in 2017.
Nothing can be ruled out.
West African won Explorer of the Year in the inaugural MNN Awards.
WAF Price at posting:
36.5¢ Sentiment: Buy Disclosure: Held
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