The Sanbrado gold project will be producing an average of 150,000 ounces per annum in the first few years of operation, but inferred resources suggest that that profile will already immediately continue for at least another two years beyond that.
While WAF has been enjoying excellent conversion of inferred resources into mineable categories, corporately the company felt the best strategy was to “lay down a marker” for a robust, nine-year project and make big headway on the funding discussions as it further improved the production and economics of the planned development.
Thus while the feasibility points to open cut mining the high grade M5 South to 150m, the expectation is a much shallower pit and development of a portal for underground mining at 40-60m will in fact be the reality outlined by optimisation work over the next few months.
With regards the additional ounces expected at M5 South, Hyde pointed to the drill hit at 183m vertical depth of 9 metres grading 94 grams per tonne.
WAF has been hitting high grade to 300m vertical depth at M5 South, and with an average of 1600oz per vertical metre, another 200-250,000oz is an obvious expectation.
And Hyde pointed to Canada’s RoxGold’s similarly high grade resources in Burkina Faso extending to 400m in the reserve category and 800m in resources.
Hyde expects the current already low all-in-sustaining-costs of $US759 per ounce can be brought into the “600s”.
Current capital costs are put at $131 million, which at this stage includes the 35:1 stripping ratio for a 150m deep pit development at M1 South.
WAF’s high grade ounces from M1 South will be augmented by lower grade base load feed from the M5 deposit.
WAF has four drill rigs on site, with drilling at the M1 South project game-change only happening since discovery 12 or so months ago.
The optimised feasibility work is to be completed in the third quarter, with WAF having $A17 million cash.
Permitting is already in place, with production at a rate of 150,000oz per annum flagged to be underway in 2019.
Shares in WAF were down 16% to A23c in midday trade, capitalising the company at $111 million.
The stock was at 5c 12 months ago.
