West African Resources Limited: March 2015 Quarterly Report

Highlights

Outstanding Pre-Feasibility Study for Mankarga 5 Gold Project

Base case states on a pre-tax basis assuming 100% project at $1300/oz gold price. All amounts in US$:

- 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
- IRR of 63% with 14-month payback on capital due to strong early cash flow
- Pre-tax cash flow of $146m after initial and sustaining capital costs
- Pre-tax NPV5% of $117m, Post-tax NPV5% of $86m
- Potential to upgrade in-pit Inferred Resources currently treated as waste in mining schedule


March 2015 Quarter Summary

- 1,205m diamond core drilled for geotechnical and metallurgical test work
- $1.1 Exploration and Development Expenditure
- $0.4m Administration Costs
- $5.2m cash at bank at 31 March 2015


Work Completed in Quarter

- Feasibility Study commenced, targeting Q3 2015 completion
- Mintrex appointed as lead consultant
- Study manager and financing consultant appointed
- Resource upgrade drilling commenced targeting upgrade of in-pit Inferred Mineral Resources
- Field work for environmental studies
- Geotechnical and metallurgical test work diamond core drilling


June 2015 Quarter Plans

- Commence discussions and obtain indicative debt finance proposals from project lenders
- Infill RC drilling within proposed starter pit
- Mankarga 5 resource update
- Metallurgical test work results expected
- Infill auger drilling and prospect mapping and RC drilling over Mankarga 1 and 2 prospects
- Completion of ESIA fieldwork over proposed mine and dam sites


Perth, Australia (FSCwire) - West African Resources Limited (ASX: WAF) is pleased to report activities on its 100%-owned and 100%-earning gold and copper-gold projects in Burkina Faso, West Africa, for the quarter ending 31 March 2015.


Mankarga 5 Heap Leach Gold Project

West African Resources Limited announced results of its technical and financial assessment of an oxide heap leach starter project on its Mankarga 5 Gold Project, Burkina Faso in February 2015 (ASX, TSXV: 23/2/2015). This assessment constituted a Pre-Feasibility Study (PFS) incorporating updated Mineral Resource, mining schedule, column test work and cost inputs. It was prepared in accordance with the requirements of both the Australian 2012 JORC Code and Canadian NI 43-101. A summary of the base case is stated below on a pre-tax basis assuming 100% project at a gold price of $1,300/oz. All amounts are in US dollars.

- Pre-production capital of $46.6 million, including $8.7 million working capital and contingency

- Annual gold production of 69,000 ounces for first three years, 49,000 ounces for life of mine

- Mine life of 7 years

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

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

- IRR of 63% with a 14 month payback of capital due to strong early project cash flow

- Pre-Tax cash flow after initial and sustaining capital costs of $146 million

- Pre-Tax NPV5% of $117 million, Post-Tax NPV5% of $86 million

- 59% increase to in-pit inventory now 440,000oz, life of mine strip ratio 2:1

- Indicated resources increased 57% from scoping study to 8.4Mt at 1.8g/t Au (495koz), Inferred resources increased 39% to 15.2Mt at 1.6g/t Au (791koz) at a 1g/t Au cut-off

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

- More than one million ounces of Resource remaining, open at depth, beneath oxide starter pit

- Limited exploration conducted to date, numerous drill targets within trucking distance of the proposed plant site

West African has recently completed an updated entirely independent NI 43-101 Technical Report for the PFS which is currently being reviewed by Canadian authorities (BCSC). The original report had inadvertently included co-authors that we not independent of the Company.


Table 1: Mankarga5 February 2015 Resource

 	Cut-off	Indicated Resource	Inferred Resource
	(Au g/t)	Tonnes	Grade	Au Oz	Tonnes	Grade	Au Oz
	 		(Au g/t)			(Au g/t)	
Oxide	0.5	7,200,000	1.2	273,000	800,000	0.8	20,000
	1	3,100,000	1.8	180,000	200,000	1.2	7,000
Transitional	0.5	2,300,000	1.2	89,000	500,000	0.9	13,000
	1	1,000,000	1.9	60,000	200,000	1.3	6,000
Fresh	0.5	9,500,000	1.2	377,000	39,100,000	1.0	1,320,000
	1	4,200,000	1.9	256,000	14,800,000	1.6	778,000
Total	0.5	19,000,000	1.2	736,000	40,400,000	1.0	1,350,000
	1	8,400,000	1.8	495,000	15,200,000	1.6	791,000

The PFS was managed by independent engineering consultancy Mintrex Pty Ltd and completed to a ± 30% input cost estimate, assuming an annual throughput of 1.6Mtpa which is in line with the capacity of the plant West African purchased in 2014. Project sensitivities are shown below. The base case assumes 100% project basis and a gold price of $1300/oz, with all amounts in US dollars unless otherwise stated.


Table 2: PFS Economic Summary

Pre-Tax (100%)	$1100/oz	$1300/oz	$1500/oz
NPV0% ($M)	$79	$146	$208
NPV5% ($M)	$60	$117	$169
IRR %	39%	63%	81%
Payback (Months)	21	14	11
After-Tax (90%*)	$1100/oz	$1300/oz	$1500/oz
NPV0% ($M)	$58	$110	$156
NPV5%  ($M)	$42	$86	$125
IRR %	30%	50%	66%
Payback (Months)	26	16	13

Feasibility Study Update

Subsequent to the end of the quarter the Company provided an update on Feasibility Study (FS) commencement and progress. It expects to complete the report by Q3 2015. The Company has appointed Perth-based consulting firm Mintrex Pty Ltd as lead consultant to manage the Mankarga 5 FS. Mintrex has a team of engineering professionals, headed by Mr Tom Kendall, with significant experience in project management services and skills to design, build and commission mining plants. Mintrex has significant national and international experience including completing a FS on Roxgold’s 0.3 Mtpa Yaramoko Gold Project and Regis Resources Ltd 4.0 Mtpa Garden Well Gold Project, the DFS for Sandfire Resources Ltd on the 1.5 Mtpa DeGrussa Copper Project, the BFS for Perseus Mining Ltd 5.5 Mtpa Edikan Project in Ghana, detailed engineering and procurement for the Regis Resources 2.0Mtpa Duketon gold project and full EPCM services for the 1.0 Mtpa Alkane Resources Tomingley Project and the 1.5 Mtpa Millennium Minerals Nullagine Gold Project.

West African is also pleased with the appointment of Mr Lyndon Hopkins to the role of Study Manager. His immediate responsibility will be leading the Mankarga 5 FS, building on the positive outcome of the Pre-Feasibility Study announced in February 2015. Lyndon is a geologist with more than 20 years’ experience in gold exploration, development and production. Lyndon was Chief Operating Officer of Equigold NL’s Ivory Coast operations and managed the in-country aspects of the project development and feasibility study for the Bonikro Gold Mine which commenced production in 2008. More recently, he was Mine Manager for the construction of Regis Resources Ltd’s Rosemont Gold Mine. He has been involved with numerous gold operations in Australia and Africa in various roles with Equigold and Regis and his experience will strengthen WAF’s development team. WAF will add further operational and corporate strength to the management team and board over the coming months.

Resource upgrade drilling has commenced targeting drilling in-pit Inferred Mineral Resources. Some 0.7Mt of Inferred material grading 1.0g/t Au containing 21,000 ounces was included in the PFS pit design and is currently treated as waste. Infill drilling will upgrade this material from Inferred to Indicated category, which will make a positive impact on the project economics and reduced strip ratio.

During the quarter 10 HQ diamond core holes were drilled to provide geotechnical data and samples. Additional drill core was also selected from these holes for further metallurgical test work on transitional and fresh material types. Metallurgical test work is in progress at ALS Ammtec in Perth. More than 3.5 tonnes of drill core was airfreighted to ALS Ammtec during the quarter. There is sufficient core to complete a definitive test work program for the FS. This program will be completed by the end of June 2015. Two RC water bore holes were drilled in the quarter also to determine quantity and flow rate of groundwater. Data collected from pump tests will be used in the overall water balance for the project for the FS.


Project Financing

With a payback period of 14 months at US$1300/oz gold, the Company intends to finance development of Mankarga 5 predominantly with senior debt to minimise equity dilution and maximise shareholder returns. It has engaged Nick Harch to undertake project finance discussions with potential lenders. Nick is Managing Director of resource investment advisory firm Orimco Pty Ltd and was formerly an Executive Director with Macquarie Bank, where he was responsible for initiating and leading project finance and structured hedging transactions for a broad range of resource projects, including several West African gold projects.

Discussions and site visits with project lenders have commenced. The company expects to receive indicative debt financing proposals from project lenders by the end of the June quarter 2015.


Permitting

WAF appointed Knight Piesold Pty Ltd (KP) to assist in completion of environmental studies. The proposed mine site and infrastructure was assessed as a Category A activity requiring an Etude d’Impact sur l’Environnement (Environmental and Social Impact Assessment - ESIA), while the Water Storage Facility (WSF) was assessed as a Category B activity requiring a Notice d’Impact sur l’Environnement (NIE). Field work for these separate studies is ongoing and both reports are expected to be completed by late July 2015.


Exploration Upside

West African acquired the Tanlouka Permit in January 2014 and has focussed entirely on expanding and improving existing resources, and completing economic studies. There are a number of drill-ready prospects within a short trucking distance from the starter project which have potential to add further plant feed to the starter project which have had little attention from the Company to date. Nearby prospects include Mankarga 1, Mankarga 2, Manesse, Tanwaka, Goudré and Moktedu (Figure 3).

Mankarga 1 is the most advanced prospect and located approximately 500m northwest of the Mankarga 5 Mineral Resource. WAF geologists are completing detailed prospect and structural mapping of the area at the time of reporting. Mankarga 1 comprises similar rock types and stratigraphy to Mankarga 5, however the major difference is in the orientation of mineralised trends north-northwest, in contrast to Mankarga 5 which trends northeast. Mineralisation is hosted with steeply dipping quartz veining which has been subject to significant artisanal mining activity (Figure 4) with pits down to 30m depth. Channel Resources drilled approximately 23 RC holes and 5 diamond holes in the area. Mineralisation is structurally complex therefore detailed auger drilling will be completed during the quarter on a 20m by 100m grid, oriented perpendicular to the main mineralised trends. Significant results from historic drilling at Mankarga 1 are shown in Table 3 below.


Figure 3 – Project Location surrounding exploration prospects and deposits
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Table 3: Mankarga 1 Significant Intercepts

Hole	From	To	Interval	Au g/t	East	North	RL
TAN10-RC-10	56.00	72.00	16	4.80	741579.41	1336912.41	275.99
TAN10-RC-10	78.00	88.00	10	3.86	741579.41	1336900.20	261.43
TAN10-RC-12	58.00	66.00	8	31.78	741551.92	1336966.64	279.70
TAN11-RC-52	46.00	50.00	4	16.95	741413.29	1337146.67	291.17
TAN12-DD-72	68.00	69.50	1.5	22.63	741548.36	1336970.74	274.61
TAN12-DD-73	56.00	69.50	13.5	10.11	741577.77	1336914.73	276.91
TAN12-DD-73	80.00	93.00	13.00	1.56	741576.77	1336899.27	258.91
TAN12-DD-74	64.20	68.00	3.80	

Currently some 0.7Mt of Inferred Mineral Resource is treated as waste in the study mine schedule. With infill drilling this material should be upgraded to Indicated category and treated as plant feed. At the end of the proposed starter project a significant resource will remain beneath the open pit comprising Indicated Resources of 3.1Mt at 1.7g/t Au (173koz) and Inferred Resources of 14.9Mt at 1.6g/t Au (779koz) at a 1g/t Au cut-off (Table 9). Test work reported in July 2014 (ASX, TSXV: 9/6/14) confirmed mineralisation is non-refractory and amenable to conventional milling and CIL processing with recoveries of up to 98.5% and averaging 93.8% in direct cyanidation test work. This resource is open at depth and along strike to the northeast.


Table 4: Mankarga5 February 2015 Sulphide Resource after Starter

 	Cut-off	Indicated Resource	Inferred Resource
	(Au g/t)	Tonnes	Grade	Au Oz	Tonnes	Grade	Au Oz
	 		(Au g/t)			(Au g/t)	
Remaining Resource	0.5	8,700,000	1.1	298,000	39,700,000	1.0	1,329,000
	1	3,100,000	1.7	173,000	14,900,000	1.6	779,000

Other Projects

No work was completed during the quarter in the Company’s other projects.


Project Timeline

An updated project timeline for the heap leach starter project is presented below.

Table 5: Timeline of Key Deliverables
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Further information is available at www.westafricanresources.com



For further information contact:

West African Resources Limited
Richard Hyde, Managing Director
Ph: 08 9481 7344

Nathan Ryan, Investor Relations
Ph: 0420 582 887
Email: info@westafricanresources.com



Summary of Tenements in Burkina Faso at 31 March 2015
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Qualified/Competent Person’s Statement

Information in this announcement relating to the Pre-Feasibility Study has been prepared by and compiled under the supervision of Dr Leon Lorenzen, an Independent Consultant and Director of Mintrex Pty Ltd, who is a Fellow of the Australian Institute of Mining and Metallurgy (CP) and Fellow of the Institution of Engineers Australia. Dr Lorenzen has sufficient experience which is relevant to and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person (or “CP”) 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 Canadian National Instrument 43-101. Dr Lorenzen has reviewed the contents of this news release and consents to the inclusion in this announcement of all technical statements based on his information in the form and context in which they appear.

Information in this announcement that relates to exploration results and mineral resources is based on, and fairly represents, information and supporting documentation prepared by Mr Brian Wolfe, an independent consultant specialising in mineral resource estimation, evaluation and exploration. Mr Wolfe is a Member of the Australian Institute of Geoscientists. Mr Wolfe 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 (or “CP”) 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 Canadian National Instrument 43-101. Mr Wolfe has reviewed the contents of this news release and consents to the inclusion in this announcement of all technical statements based on his information in the form and context in which they appear.


Regulatory Disclaimer and Related Information

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. This announcement has been prepared in compliance with the JORC Code 2012 Edition, the ASX Listing Rules and Canadian National Instrument 43-101 (Disclosure Standards for Mineral Projects). The information relating to the historic Mankarga 5 Mineral Resource Estimate is extracted from Channel's NI43-101 report dated August 17, 2012 and is available to view on www.westafricanresources.com and on profile of Channel Resources Ltd (now a subsidiary of the Company) on www.sedar.com.


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 the potential economic feasibility of a principal mineral project, 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 ability to secure additional funding, 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: gold price volatility, investor interest in financing of junior resource issuers, exploration hazards and risks; risks related to exploration and development of natural resource properties; uncertainty in West African’s ability to obtain funding on reasonable terms or any terms at all; financial market 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.



Appendix 1 - JORC 2012 Table “1”
Section 1 Sampling Techniques and Data
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