West African Resources : 16m at 5.3g/t Au including 8m at 9.4g/t Au at M1 Prospect

Microsoft Word - 160122_M1_Final

Press Release

22nd January 2016

West African hits 16m at 5.3g/t Au from 48m including 8m at 9.4g/t Au at M1 from shallow RC drilling

Gold developer West African Resources Limited (ASX, TSXV: WAF) is pleased to report further high-grade RC results from the M1 prospect, at its 100%-owned Tanlouka Gold Project, Burkina Faso.

Highlights

• RC drilling at M1 north delivers shallow high grade gold mineralisation
• Continuity of geology and mineralisation over 200m, within +1.5km mineralised trend
• Potential to add ounces to existing heap leach Probable Ore Reserve of 440,000oz gold1
• Further resource definition drilling at M1 and M3 in progress

  Managing Director Richard Hyde commented:

  "Drill hole TAN16-RC99 has returned an excellent result of 16m at 5.3g/t Au from 48m at the northern end of the +1.5km M1 mineralised trend. The result fits well with previous high-grade gold at M1 North with TAN15-DD28 which returned 14m at 4.4g/t Au from 36m in December, 2015.

  "New gold mineralisation at M1 North can be traced over 200m, is open along strike, at depth and located less than 2km from the proposed heap leach starter pit at M5.

  "Follow-up shallow RC drilling is in progress at M3 and M1 prospects. Further results are imminent."

  Continuous shallow gold at M1 North

  Drilling has confirmed continuity of shallow gold mineralisation at the northern end of the M1 mineralised trend. Follow-up drilling has confirmed continuity of gold mineralisation in this area (Figure 1 and 2) with TAC1204 returning a result of 16m at 5.3g/t Au from 48m including 8m at 9.44g/t Au. Mineralisation at the M1 North zone can now be traced over 200m and remains open along strike and at depth. Drilling in continuing. Significant results include:

• TAN16-RC093: 8m at 1.12g/t Au from 24m

• TAN16-RC094: 12m at 1.42g/t Au from 24m

• TAN16-RC095: 12m at 1.15g/t Au from 44m

• TAN16-RC096: 12m at 1.00g/t Au from 24m

• TAN16-RC097: 16m at 1.91g/t Au from 56m

• TAN16-RC098: 16m at 1.28g/t Au from 20m

• TAN16-RC099: 16m at 5.3g/t Au from 48m including 8m at 9.44g/t Au

Principal Office: 14 Southbourne Street, Scarborough WA 6019, Western Australia

T: + 61 8 9481 7344 F: + 61 8 9481 7355 E: [e-mail] www.westafricanresources.com ACN: 121 539 375

1 See page 4 Ore Reserve Table

Figure 1: M1 Cross section - NW0175

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

• TAC0657: 8m at 1.45g/t Au from 25m

• TAC0856: 10m at 1.04g/t Au from Surface

• TAC0887: 8.6m at 1.84g/t Au from 9m

• TAC0891: 3m at 21.54g/t Au from 10m

• TAN15-DD28: 14m at 4.5g/t Au, including 3m at 16.2/t Au from 36m Historic RC and diamond drilling from M1 has returned significant results including:

• TAN10-RC-10: 16m at 4.8g/t Au from 56m

• TAN10-RC-12: 8m at 31.78g/t Au from 58m

• TAN10-RC-23: 2m at 25g/t Au from 58m

• TAN11-RC-52: 4m at 16.95g/t Au from 46

   TAN12-DD-73: 13.5m at 10.11g/t Au from 56m

  
  

  Significant Potential to Increase Project Resources

  The recently discovered gold mineralisation at the M1 prospect is yet to be included in the project resource inventory. M1 mineralisation will be modelled and incorporated in a resource update by Q2 CY2016. Any additional higher grade oxide tonnes will have a positive impact on the project economics (see page 4).

  It is expected that oxide mineralisation from M1 and M3 will continue to exhibit similar metallurgical characteristics to M5 oxides (ASX/TSXV: 22/12/2015) and will be amenable to heap leach processing. Follow-up RC and diamond drilling is in progress and will continue during 2016. Results from recent drilling are shown below in Figures 1 and 2 with results presented in Table 1.

  
  

  Figure 2: M1 Summary Plan

  
  

  
  

  2015 PFS Highlights Figure 3: Mankarga Regional Summary

  
  

  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