Perth company West African Resources has secured a major milestone for its Sanbrado gold project (formerly Tanlouka gold project) in Burkina Faso after receiving firm commitments from investors to raise $35 million in project funds.
The placement, which was made up of both existing and new large institutional investors from Europe, North America and Australia, is to be raised via a single-tranche placement of 109.375 million shares at a price of 32 cents per share.
The funds will be utilised for key pre-development activities at the project, including camp facility upgrades, onsite water storage and underground access to the M1 South deposit.
In addition, funds will be allocated for the acceleration of drilling at the M1 South and M5 deposits and expansion of the company’s regional exploration program.
The project’s feasibility study (FS) has pinned production at 150,000 ounces (oz) of gold per year for the first three years of production (or 93,000oz per year over a nine-year mine life), although this figure is due to be updated following new work at the site.
The current FS also identifies probable reserves of 894,000oz and indicated resources of 1.3Moz of gold. Gaining underground access to the M1 South deposit is expected to enable infill and extensional work.
“We are on track to deliver an updated mineral resource estimate this quarter, as well as the results of an updated feasibility study incorporating open-pit and underground mining,” said Richard Hyde, West African Resources managing director.
“The feasibility study will integrate the high-grade gold from M1 South into the mine plan, which is expected to deliver transformational changes to the annual production, cost profile and life of mine.
“[West African Resources] is now well-positioned to deliver an updated feasibility study incorporating concurrent open-pit and underground mining this quarter, and press on towards the development of the project later this year.”