300-metre mineralised strike length at M1 South – Portfolio Stock (bought @ $0.08 in Sep 2015)
West African Resources (ASX: WAF, Share Price: $0.15, Market Cap: $46m) remains one of our favoured emerging African gold producers. 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 the 2014 takeover of Channel Resources, significantly enhancing its overall gold resource position.
The company has announced that the latest RC drill-hole, TAN16-RC131, has returned ultra-high grade gold mineralization of 349.15g/t gold, within 11 metres at 43.44g/t Au. The new result confirms continuity of ultra-high grade gold mineralisation at the M1 South prospect over at least a 300-metre strike length.
Market Significance
WAF’s share price has surged from a recent 12-month low of $0.05 during February to a 12-month high of $0.15 in Friday’s trade. The move reflects market recognition of the high-grade Tanlouka mineralization, reinforced by recent diamond and RC drilling, which have the potential to boost overall project economics. WAF has also maintained strong production momentum by boosting its resource base via the takeover of Canadian-listed Channel Resources, the procurement of a second-hand heap-leach plant, completion of a PFS and final preparations for the imminent release of a BFS.
Announcement Detail – Further High-Grade M1 Drilling Results
In our prior coverage, we’ve reviewed the company’s release of extremely high-grade RC drilling results from its M1 prospect, situated within its 100%-owned Tanlouka Gold Project in Burkina Faso.
Initial step-out drilling at the southern end of the M1 mineralised trend returned spectacular results on section SE450 via RC holes TAN16-RC119 and TAN16-RC122 – which were drilled 80 metres southeast of TAN16-RC118 (which intercepted 4 metres at 36.58g/t Au from 60 metres).
- TAN16-RC119 intercepted 24 metres at 7.4g/t Au including 8 metres at 17g/t Au from 44 metres, with extensive stoping and backfill material intercepted between 46 metres and 51 metres down-hole.
- TAN16-RC122, drilled down-dip of TAN16-RC119, intercepted two high-grade zones: 12 metres at 10.7g/t Au from 80 metres including 4 metres at 22.6g/t Au and 31 metres at 17g/t Au from 104 metres including 4 metres at 109.1g/t Au.
WAF subsequently announced that re-sampling of TAN16-RC122 had confirmed discrete, ultra-high-grade mineralisation including 12 metres at 53.1g/t Au, with 1 metre at 534.45g/t Au.
WAF further announced a week ago that the first diamond hole in the new program, TAN16-DD33, had confirmed continuity of ultra-high grade gold mineralisation at M1 South, returning 3 metres at 8.48g/t Au from 86 metres depth and 4 metres at 86.96g/t Au from 93 metres (including 1 metre at 343.59g/t Au).
RC hole TAN16-RC124 also intersected high-grade gold mineralization 150 metres along strike of TAN16-RC122, returning 7 metres at 13.57g/t Au from 130 metres (including 1 metre at 41.43g/t Au) beneath historic workings.
This week, WAF announced further ultra-high grade gold results as follows:
- TAN16-RC128: 8 metres at 3.39g/t Au from 50 metres
- TAN16-RC129: 4 metres at 42.09g/t Au from 104 metres, including 1 metre at 165.36g/t Au
- TAN16-RC130: 6 metres at 10.05g/t Au from 46 metres, including 1 metre at 43.5g/t Au
- TAN16-RC131: 11 metres at 43.44g/t Au from 76 metres, including 1 metre at 349.15g/t Au, 1 metre at 113.98g/t Au
- TAN16-RC131: 5 metres at 18.89g/t Au from 124 metres, including 1 metre at 78.95g/t Au
Technical Significance
As reported in our coverage in early February, many of the holes in the southern end of M1 have intercepted open stopes between 30 metres and 50 metres down-hole, where high-grade quartz veins have been mined out historically by artisanal miners.
The RC program has been highly successful in determining a steep northeast-dip/northwest-strike of high-grade gold mineralisation. Mineralisation at the M1 South zone can now be traced over 300 metres.
Due to the continuity of extremely high-grade results from recent drilling at M1 South, the company says it will review its feasibility and development options following the completion of the current drilling program. RC and diamond drilling is in progress and further results are imminent. The recently discovered ultra high-grade gold mineralisation at the M1 prospect is yet to be included in the project resource inventory.
Summary
We initially covered West African Resources at a price around $0.08 during September 2015 – representing a 87.5% gain so far.
Importantly, gold mineralisation at the M1 and M3 deposits lies less than 2km from the proposed heap-leach starter-pit at M5. The company has so far done very little work outside of the M5 resource area and the new gold discoveries at M1, M2 & M3 should all help boost the already-robust economics of the heap-leach starter project. The key is the high-grade nature of the mineralization being encountered, which should enhance project economics and boost overall mine life. We also expect the release of the company’s Bankable Feasibility Study imminently.
WAF is therefore continuing to maintain strong development activity and accordingly will remain firmly held within our Portfolio.
