Scarborough, Australia (FSCwire) - Gold developer West African Resources Limited (ASX, TSXV: WAF) is pleased to provide an update regarding the project debt finance process as it moves into the development phase for its 90%-owned Sanbrado Gold Project (‘Sanbrado’) in Burkina Faso.
 

The Company recently requested debt funding proposals from a selection of international resource financiers for the construction of Sanbrado. The Company received strong interest from 14 tier one financiers, with competitive non-binding offers ranging from US$160m to US$215m.

 

The Company is in the process of selecting a short list of preferred financiers and moving to the second stage of the debt financing process, which will involve site visits, completion of legal and technical due diligence and facility documentation. A preferred financier or syndicate will be appointed to arrange and underwrite debt project finance facilities before the end of Q4 2018.

 

The Company recently announced its updated Feasibility Study for the Sanbrado Gold Project in Burkina Faso (ASX, TSXV: 22/6/18). The study proposed an initial 11-year mine life and a Probable Reserve of 1.6 million ounces (20.4Mt at 2.4g/t gold). Average annual production over the first 5 years of mine life of 211,000 ounces gold, and pay back US$185 million pre-production capital costs in 16 months at US$1,300 gold. Project economics are robust, with AISC of US$551/oz over first 5 years of mine life.

 

Value adding work programs are ongoing with infill diamond drilling at M1 South and step-out drilling in the southwest portion of M5 being undertaken. Optimisation studies are also underway and will include increasing throughput (ASX, TSXV: 6/8/18) which will lift annual production and reduce mine life to approximately 8 years. A project update incorporating these improvements will be reported in Q1 2019. The Company finished the June 2018 quarter with A$42.6m cash.

 

Managing Director Richard Hyde commented:

 

“We are extremely pleased with the strong interest to date from leading international resource financiers and their ongoing participation in the debt financing process for Sanbrado.

 

“Strong competitive bids from US$160m to US$215m confirms Sanbrado’s high quality and strong early cashflow generated by the project.

 

“We look forward to appointing a tier-one financier or syndicate to arrange and underwrite debt project finance facilities before the end of Q4 2018.”

 

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Source: West African Resources Ltd (TSX Venture:WAF, OTC Bulletin Board:WFRSF)

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