West African Resources Ltd. raises $2.1m to accelerate drilling program at Tanlouka

Highlights

- $2.1 million placement completed, including cornerstone investment of $1 million from major mining contractor Ausdrill

- $0.5 million Share Purchase Plan to provide opportunity for all WAF shareholders to participate on placement terms

- Drilling programs at M1 and M3 to be accelerated with Ausdrill rigs, further results imminent

- Funding allows WAF to add significant value to the 100% owned Tanlouka Gold Project throughout 2016


Perth, Australia (FSCwire) - Gold developer West African Resources Limited(ASX, TSXV: WAF) is pleased to announce that it has completed a capital raising of $2.1 million to accelerate the development of high grade oxide mineralisation at the M1 and M3 prospect, at its 100% owned Tanlouka Gold Project, Burkina Faso.


Managing Director Comment

Managing Director Richard Hyde commented: “We are pleased to have completed the Placement in such a challenging market, which is a credit to the support we received from existing shareholders, Ausdrill and new investors.

“This funding will allow us to carryout rapid resource definition drilling at recently discovered high grade oxide gold zones at the M1 and M3 prospects, at our 100%-owned Tanlouka Gold Project.

“The addition of Ausdrill rigs to the current program will allow us to quickly advance the M1 and M3 prospects, which have recently returned significant results including 14m at 4.5g/t Au from 36m and 32m at 5.0g/t Au, respectively.

“2016 is shaping up for an exciting and eventful year with the Company.”


Successful Placement

Under the Placement, approximately 31.8 million shares Fully Paid Ordinary Shares at $0.065 per share will be issued to professional and sophisticated investors as defined under Section 708 of the Corporations Act.

The Placement shares will rank equally with existing shares on issue and are being issued within the Company’s placement capacity pursuant to ASX Listing Rule 7.1.

Hartleys Limited acted as Broker to the Offer.


Cornerstone Investment from Ausdrill

The capital raising received support from major Australian mining contractor Ausdrill Limited (ASX: ASL) (“Ausdrill”), which subscribed for $1 million under the Placement. WAF will shortly step-up the current drilling program using Ausdrill rigs designed to rapidly bring the M1 and M3 prospects to resource status, with the aim of significantly improving the existing 440,000oz gold heap leachable Probable Reserve (see page 3).


Accelerated Work Programme

West African intends to use the proceeds of the Placement for exploration and development of its 100% owned Tanlouka Gold Project in Burkina Faso, focusing on recent high grade zones at the M1 and M3 prospects, as well as for general working capital purposes.

Recent shallow RC and diamond drilling by WAF at M1 has returned significant results including:
- TAC0657: 8m at 1.45g/t Au from 25m
- TAC0856: 10m at 1.04g/t Au from Surface
- TAC0887: 8.6m at 1.84g/t Au from 9m
- TAC0891: 3m at 21.54g/t Au from 10m
- TAN15-DD028: 14m at 4.5g/t Au from 36m

Recent shallow RC drilling at M3 has returned significant results including:
- TAC0996: 32m at 5.02g/t Au including 13m at 7.14g/t Au from 2m
- TAC1047: 25m at 2.45g/t Au from 12m, including 17m at 3.35g/t Au, ending in mineralisation
- TAC1097: 13m at 1.77g/t Au from 22m
- TAC1102: 20m at 2.80g/t Au from 24m, including 8m at 3.98g/t Au
- TAC1121: 12m at 1.14g/t Au from 16m, ending in mineralisation

None of the recently discovered gold mineralisation at the M1 or M3 prospect is currently included the project resource inventory. This new mineralisation will be modelled and incorporated in a resource update in early 2016. Any additional higher grade oxide tonnes will have a positive impact on the project economics (page 3)


Share Purchase Plan Details

In order to allow existing shareholders to participate on the same terms as the Placement, the Company will undertake a Share Purchase Plan (“SPP”) at the same price as the Placement to raise an additional $0.5 million. Additional amounts raised under the SPP will be applied to further accelerate the exploration and development of the Project.

Under the SPP, shareholders on the company's register as at close of business on Friday 11 December 2015 (the "Record Date") will be able to purchase up to a maximum of $15,000 worth of shares.


The key terms of the SPP are:
- The purchase price has been set at A$0.065 per share, which is a 10% discount to the 20 day volume weighted average price for WAF's shares of A$0.722;

- Shareholders will be able to acquire shares in 7 parcel sizes ranging from $500 (being 7,692 shares) up to $15,000 (being 230,769 shares);

- The SPP will open on finalisation of the Placement, and close in mid-January 2016.

- A maximum of 7,692,307 shares will be issued under the SPP; and

- The right to participate in the SPP is optional and is non-renounceable (i.e. it cannot be transferred to another person).

Further information on the SPP can be found in the Offer Document, which will be released separately to the ASX.


2015 PFS Highlights

West African Resources Limited completed an updated Pre-Feasibility Study report for an oxide heap leach starter project on its Mankarga 5 Gold Project, Burkina Faso in May 2015 (ASX, TSXV: 15/5/15, 29/5/2015). It was prepared in accordance with the requirements of both the Australian 2012 JORC Code and Canadian NI 43-101. The report is filed on SEDAR and on the Company’s website. A summary of the base case is stated below assuming a 100% project at a gold price of $1,300/oz. All amounts are in US dollars.

- Production of 69,000oz pa for first 3 years, 49,000oz pa for life of mine, 7 year life of mine

- Cash costs $428/oz for 3 years, $635/oz life of mine

- All-in cash costs of $538/oz for 3 years, $749/oz life of mine

- Pre-tax IRR of 63% with 14-month payback, post-tax IRR of 50% with 16-month payback

- Pre-tax cash flow of $146m, post-tax cash flow of $118m after initial and sustaining capital costs

- Pre-tax NPV5% of $117m, Post-tax NPV5% of $86m

- Probable Ore reserve of 440,000oz, life of mine strip ratio 2:1

- Potential to upgrade in-pit Inferred Resources currently treated as waste in mining schedule

- Nearby drill ready oxide targets with potential to add to the base case

Tabelle
http://fscwire.com/newsrelease/waf-raises-21m-accelerate-drilling-program-tanlouka


Cautionary Note:

Mineral Resources that are not mineral reserves do not have demonstrated economic viability. Mineral resource estimates do not account for mineability, selectivity, mining loss and dilution. These mineral resource estimates include inferred mineral resources that are normally considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is also no certainty that these inferred mineral resources will be converted to measured and indicated categories through further drilling, or into mineral reserves, once economic considerations are applied.

Production targets for the proposed heap leach starter project referred to in this announcement were first released to the ASX and TSXV on 23 February 2015. They are preliminary and there is no certainty that the production targets, or the forecast financial information derived from the production targets, will be realised. All material assumptions underpinning production targets or forecast financial information derived from production targets continue to apply and have not materially changed.


Competent Person’s Statement

Information in this announcement that relates to exploration results, exploration targets or mineral resources is based on information compiled by Mr Richard Hyde, a Director, who is a Member of The Australian Institute of Mining and Metallurgy and Australian Institute of Geoscientists. Mr Hyde has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) and a Qualified Person under National Instrument 43-101. Mr Hyde consents to the inclusion in this announcement of the statements based on his information in the form and context in which they appear. Exploration results included in this release have been summarised from ASX/TSXV release made on 8/9/15, 10/11/15, 2/12/15 and 4/12/15.


Forward Looking Information

This news release contains “forward-looking information” within the meaning of applicable Canadian and Australian securities legislation, including information relating to West African's future financial or operating performance may be deemed “forward looking”. All statements in this news release, other than statements of historical fact, that address events or developments that West African expects to occur, are “forward-looking statements”. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “does not expect”, “plans”, “anticipates”, “does not anticipate”, “believes”, “intends”, “estimates”, “projects”, “potential”, “scheduled”, “forecast”, “budget” and similar expressions, or that events or conditions “will”, “would”, “may”, “could”, “should” or “might” occur. All such forward-looking statements are based on the opinions and estimates of the relevant management as of the date such statements are made and are subject to important risk factors and uncertainties, many of which are beyond West African’s ability to control or predict. Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to known and unknown risks, uncertainties and other factors that may cause actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. In the case of West African, these facts include their anticipated operations in future periods, planned exploration and development of its properties, and plans related to its business and other matters that may occur in the future. This information relates to analyses and other information that is based on expectations of future performance and planned work programs. Statements concerning mineral resource estimates may also be deemed to constitute forward-looking information to the extent that they involve estimates of the mineralization that will be encountered if a mineral property is developed.

Forward-looking information is subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking information, including, without limitation: exploration hazards and risks; risks related to exploration and development of natural resource properties; uncertainty in West African’s ability to obtain funding; gold price fluctuations; recent market events and conditions; risks related to the uncertainty of mineral resource calculations and the inclusion of inferred mineral resources in economic estimation; risks related to governmental regulations; risks related to obtaining necessary licenses and permits; risks related to their business being subject to environmental laws and regulations; risks related to their mineral properties being subject to prior unregistered agreements, transfers, or claims and other defects in title; risks relating to competition from larger companies with greater financial and technical resources; risks relating to the inability to meet financial obligations under agreements to which they are a party; ability to recruit and retain qualified personnel; and risks related to their directors and officers becoming associated with other natural resource companies which may give rise to conflicts of interests. This list is not exhaustive of the factors that may affect West African’s forward-looking information. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the forward-looking information.

West African’s forward-looking information is based on the reasonable beliefs, expectations and opinions of their respective management on the date the statements are made and West African does not assume any obligation to update forward looking information if circumstances or management’s beliefs, expectations or opinions change, except as required by law. For the reasons set forth above, investors should not place undue reliance on forward-looking information. For a complete discussion with respect to West African, please refer to West African’s financial statements and related MD&A, all of which are filed on SEDAR at www.sedar.com.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.



For further information contact:

West African Resources Limited
Richard Hyde, Managing Director
info@westafricanresources.com
Ph: +61 8 9481 7344

Nathan Ryan
NWR Communications
nathan.ryan@nwrcommunications.com.au
M: +61 420 582 887