West African Resources Ltd. New gold discovery at M3 Prospect 32m at 5g/t Au including 13m at 7g/t Au from 2m

Perth, Australia (FSCwire) - Gold developer West African Resources Limited (ASX, TSXV: WAF) is pleased to report high-grade results from first-pass shallow oxide RC drilling at its M3 prospect, Tanlouka Gold Project, Burkina Faso.


Highlights

- RC drilling at M3 prospect discovers shallow high-grade oxide mineralisation

- Potential to add ounces and increase grade for heap leach starter project

- Follow-up RC and diamond drilling planned to commence in late October following wet-season


Managing Director Richard Hyde commented:

“A first pass result of 32m at 5.02g/t Au in oxide near surface highlights the upside potential of the Tanlouka Gold Project. To date the Company has done very little work outside the M5 resource area and the new gold discovery at M3 will boost the already robust economics of the heap leach starter project.

“The new gold discovery at M3 is located less than 2km from the proposed starter pit. Completion of the Feasibility Study will be extended to Q4 2015 to allow new oxide mineralisation from M1 and M3 zones to be incorporated into the resource inventory and mine plan. Follow-up drilling will commence in October after the current wet season.”

RC drilling at the M3 prospect has discovered high-grade shallow oxide gold mineralisation in first-pass wide spaced RC drilling (Figure 1 and 2). Discovery holes TAC0995 and TAC0996 were drilled directly beneath a 13g/t Au auger result returned in recent infill auger drilling (ASX/TSXV: 17/08/2015). TAC0995 returned 6m at 1.88g/t Au from 40m ending in mineralisation while TAC0996 returned 32m at 5.02g/t Au including 13m at 7.14g/t Au from 2m. Gold mineralization is associated with an array of quartz veinlets along a sheared contact between the metasediments and diorite and is open along strike and at depth. It is expected that oxide mineralisation from M3 will exhibit similar metallurgical characteristics to M5 oxides, and will be amenable to heap leach processing.

None of the recently discovered gold mineralisation at the M3 prospect is currently included the project resource inventory. M3 mineralisation will be followed-up with closer spaced drilling in late October 2015, modelled and incorporated in a resource update later this year. Any additional higher grade oxide tonnes will have a positive impact on the project economics. First pass shallow RC drilling targeting oxide mineralisation at M3 has been completed, with initial results including:

- TAC0833: 15m at 0.83g/t Au from 20m
- TAC0995: 6m at 1.88g/t Au from 40m ending in mineralisation
- TAC0996: 32m at 5.02g/t Au including 13m at 7.14g/t Au from 2m
- TAC1024: 9m at 1.11g/t Au from 19m
- TAC1025: 7m at 1.09g/t Au from 27m ending in mineralisation

Follow-up RC drilling is planned to commence in October after the current rainy season. This drilling will test mineralisation with RC hammer and diamond core drilling. An updated cross-section through the M3 zone and a summary plan showing results from recent drilling is shown below in Figures 1 and 2, with results presented in Table 1 and 2.

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Figure 1: M3 NW0550 Cross-Section
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Figure 2: Mankarga Exploration Summary Plan
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The company is fully funded by Macquarie Bank (ASX, TSXV: 22/12/14) to complete a Feasibility Study for a heap leach starter project. Given the high-grade tenor and potential for these new results to have a material impact on the scope of the heap leach starter project, the Company considers it prudent to extend the Feasibility Study period. The study is now expected to be completed in Q4 2015. Follow-up RC drilling is planned to recommence following the current wet-season in October 2015.


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

Mankarga5 April 2015 Resource
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Mankarga5 May 2015 Ore Reserve
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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.[/i]

Table 1: Mankarga Significant Intercepts 0.2 g/t Cut Off
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- * denotes ending in mineralisation
- All holes are RC holes.
- All reported intersections from the current 2015 program are assayed at either 1m or 4m composited intervals.
- Sample preparation and Fire Assay conducted by BIGS Ouagadougou. Assayed by 50g fire assay with AAS finish.
- Mineralised intervals reported with a maximum of 2 metre of internal dilution of less than 0.20g/t gold (Table 1). No top cut applied.
- Sample preparation and Fire Assay conducted by BIGS Ouagadougou. Assayed by 50g fire assay with AAS finish.
- QA/QC protocol: For RC samples we insert one blank, one standard and one duplicate for every 17 samples (3 QA/QC within every 20 samples).


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.


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.


Section 1: Sampling Techniques and Data

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