HomeBusiness and policyAustralian company locks down US$185 million for West African gold mine

Australian company locks down US$185 million for West African gold mine

Perth developers of a US$185 million high grade gold mine in West Africa say they expect to appoint a banking syndicate to the project by next quarter.

Speaking on the first day of the three day Paydirt 2018 Africa Down Under mining conference in Perth, West African Resources MD, Richard Hyde, said the project financing process was well underway for the company’s planned 11 year Sanbrado gold project, 110 km southeast of the Burkina Faso capital of Ouagadougou.

“There has been particularly strong interest from international resource banks, debt funds and royalty companies in financing Sanbrado,” Hyde said.

“We are targeting conventional project financing and expect to appoint the banking syndicate by Q4 2018,” he said.

“Also pleasingly, recent contractor pricing for the project is supporting all of our mining cost estimates so we are confident of completing all financing negotiations by year’s end for what we anticipate will be a low cost, high margin gold mining operation.”

Sanbrado is a high grade project aiming at more than 200,000 plus ounces of gold a year in its first five years at an All In Sustaining Cost of US$540 an ounce.

It has a pre-tax NPV of US$567 million, a robust Internal rate of return of 62% and a 16 month after-tax payback. The project is fully permitted and will be a conventional open pit and underground mine over its 11 year life,

Ongoing drilling is expected to add to Sanbrado’s mining inventory, currently standing at 1.6 million ounce probable reserves. It is expected to average 133,000 ounces per year over its  mine life.

Hyde said West Resources also anticipates releasing a project optimisation, resources and reserves update in the first quarter of next year.

West African Resources is listed on both the ASX and Toronto exchanges with more than half its share register held by investors in North America and Europe.