Burkina Faso – ASX-listed gold developer West African Resources has completed a capital raising of $2.1 million to accelerate the development of high grade oxide mineralisation at the M1 and M3 prospect, at its 100% owned Tanlouka gold project in Burkina Faso.

West African Resources now holds a 100% interest in the Tanlouka permit
West African Resources now holds a 100% interest in the Tanlouka permit

Under the placement, approximately 31.8 million shares at $0.065 per share will be issued to professional and sophisticated investors.

The capital raising received support from major Australian mining contractor Ausdrill, which subscribed for $1 million under the placement.

West African Resources will shortly step-up the current drilling program using Ausdrill rigs designed to rapidly bring the M1 and M3 prospects to resource status, with the aim of significantly improving the existing 440 000 oz gold heap leachable Probable Reserve.

“We are pleased to have completed the placement in such a challenging market, which is a credit to the support we received from existing shareholders, Ausdrill and new investors. This funding will allow us to carry out rapid resource definition drilling at recently discovered high grade oxide gold zones at the M1 and M3 prospects, at our Tanlouka gold project.

“The addition of Ausdrill rigs to the current programme will allow us to quickly advance the M1 and M3 prospects, which have recently returned significant results including 14 m at 4.5g/t of gold from 36 m and 32 m at 5.0g/t of gold, respectively,” says West African Resources MD Richard Hyde.

Share purchase plan details

In order to allow existing shareholders to participate on the same terms as the placement, West African Resources will undertake a share purchase plan (SPP) at the same price as the placement to raise an additional $0.5 million. Additional amounts raised under the SPP will be applied to further accelerate the exploration and development of the project.

The key terms of the SPP are:

  • The purchase price has been set at A$0.065 per share, which is a 10% discount to the 20 day volume weighted average price for West African Resources’ shares of A$0.722;
  • Shareholders will be able to acquire shares in 7 parcel sizes ranging from $500 (being 7 692 shares) up to $15 000 (being 230,769 shares);
  • The SPP will open on finalisation of the placement, and close in mid-January 2016.
  • A maximum of 7.6 million shares will be issued under the SPP; and
  • The right to participate in the SPP is optional and is non-renounceable (i.e. it cannot be transferred to another person).

Accelerated work programme

West African Resources intends to use the proceeds of the placement for exploration and development of its Tanlouka gold project, focusing on recent high grade zones at the M1 and M3 prospects, as well as for general working capital purposes.

West African intends to use the proceeds of the $2.1m placement for exploration and development of its Tanlouka gold project
West African intends to use the proceeds of the $2.1m placement for exploration and development of its Tanlouka gold project

Recent shallow RC and diamond drilling by WAF at M1 has returned significant results including:

  • TAC0657: 8m at 1.45g/t of gold from 25 m
  • TAC0856: 10m at 1.04g/t of gold from surface
  • TAC0887: 8.6m at 1.84g/t of gold from 9 m
  • TAC0891: 3m at 21.54g/t of gold from 10 m
  • TAN15-DD028: 14m at 4.5g/t of gold from 36 m

Recent shallow RC drilling at M3 has returned significant results including:

  • TAC0996: 32m at 5.02g/t of gold including 13 m at 7.14g/t of gold from 2 m
  • TAC1047: 25m at 2.45g/t of gold from 12 m, including 17 m at 3.35g/t of gold, ending in mineralisation
  • TAC1097: 13m at 1.77g/t of gold from 22 m
  • TAC1102: 20m at 2.80g/t of gold from 24 m, including 8 m at 3.98g/t of gold
  • TAC1121: 12m at 1.14g/t of gold from 16 m, ending in mineralisation

None of the recently discovered gold mineralisation at the M1 or M3 prospect is currently included the project resource inventory. This new mineralisation will be modeled and incorporated in a resource update in early 2016. Any additional higher grade oxide tonnes will have a positive impact on the project economics the company said in a statement.

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