West African Resources – (ASX: WAF, Share Price: $0.39, Market Cap: $226m, coverage initiated @ $0.08 in Sep 2015 – gain of 387%)
Key Catalyst
Enhanced M1 Resource within the Sanbrado gold project in Burkina Faso, 150% boost in size and 100% increase in grade.
Our latest coverage of WAF on 14th October highlighted additional high-grade drilling results from depth at the M1 South prospect within its 90%-owned Sanbrado gold project in Burkina Faso. The results included 7.5m at 15.2 g/t Au from 565.5m and 5.5m at 10.8 g/t Au from 584.5m – and are the deepest mineralisation intersected to date at 450m below surface. They also demonstrate that the structure remains wide open at depth and along strike to the northwest.
These results would form part of an upgraded Resource estimate that we indicated would be available within the next few weeks – and that upgrade was announced on Monday, with a 150% increase in Indicated Resource ounces and a 100% increase in Indicated Resource grade for the M1 South prospect.
Meanwhile, at the M5 Deposit there has been a 40% increase in Indicated Resources and a 7% increase in gold grade.
Technical Significance
The updated resources for M1 South and M5 include a further 36,000m of RC and diamond drilling since the previous Resource estimate during February 2017. Most of this drilling has been directed at infilling and extending very high-grade gold mineralisation at the M1 South deposit and at the southern end of the M5 deposit.
The current development plan being contemplated at M1 South envisages an open-pit to approximately 120m, below which it is proposed the deposit would be extracted by conventional underground mining methods. At the M5 Deposit recent resource estimation studies have focussed on the upper portions of mineralised domain suitable to open-pit mining methods – meaning resources have been constrained by and reported within optimised open-pit shells. However, significant mineralisation occurs beneath the pit shells, which have potential for underground mining.
Significantly too, Resources for M1 North and M3 have not been updated as part of this updated Resource estimate.
Drilling is ongoing with the aim of infilling and extending mineralisation, with three contract diamond rigs double-shifting. WAF will ramp up to six drill-rigs from early November for the duration of the 2017-18 field season (Nov 17-July 18), with an additional resource upgrade targeted for Q1 2018 ahead of completion of an updated feasibility study (incorporating open-pit and underground mining, in mid-2018.
WAF’s share price is close to an all-time high, which is not surprising given the rapid progress it is making towards production at its Sanbrado project. The stock will remain firmly held within our Portfolio.
