Featured in Mining Journal today. Hopefully we see some buying...

Featured in Mining Journal today. Hopefully we see some buying once this filters through...
No point hiding from market, says WAF boss

Richard Hyde at West African Resources is nothing if not pragmatic. When he realised it would be much cheaper to do his own drilling in Burkina Faso, he went and bought some rigs. When the company’s main Sartenga project didn’t look like it would shape up a couple of years back, he went and bought a company that had a better project. And now Hyde is dealing with his latest problem – and it’s one that afflicts pretty much all of his peers too – in much the same pragmatic way.

• Michael Quinn
• 26 Feb 2015

Drilling at Mankarga 5 in Burkina Faso
The problem is market disinterest, with the disinterest so pervasive that even the excellent pre-feasibility results revealed this week for a low-cost gold project the company has in Burkina Faso are met with nothing more than a big yawn.
It doesn’t faze the WAF managing director.
“Keep ignoring the market and get on with it!” was his response when asked if he had any plan in mind to attract investment attention.
“The market is still very cynical and a lot of punters have been burned by West African golds (sic). The project can hold a heap of debt, so the equity isn’t that relevant.”
And the headline numbers from the Mankarga 5 pre-feasibility make the case.
An IRR after tax (and allowing for the Burkina Faso government free carried 10% stake) of 50% at a gold price of US$1300/oz and 30% at a gold price of US$1100/oz. An NPV of US$86 million and $42 million, respectively, at those two gold price levels.
Initial capex is US$47 million for a 49,000oz per annum (average life-of-mine output) heap leach operation producing ounces at cash costs of US$635/oz.
In the first three years of operation output is flagged at 69,000oz at cash costs of US$428/oz.
Production is anticipated next year.
The fact that the somewhat ubiquitous Macquarie Bank is already involved would also support Hyde’s bullishness.
WAF was capitalised this week at US$24 million.