West African Resources’ ten-year gold production forecast reflects high degree of confidence

About West African Resources Limited

West African Resources Limited (West African, the Group, ASX:WAF) is an emerging mid-tier gold producer focused on the West African country of Burkina Faso. Headquartered in Perth, WAF was listed on the ASX in June 2010. WAF currently has about 2000 square kilometres of exploration potential wherein the Sanbrado, Toega and Kiaka mine sites are located. The Group has an unhedged resource base of 12.6 million ounces of gold and aims to be producing 400,000 ounces of gold annually from two mines by 2025.

Ten-year forecast shows confidence

It is rare that any business publicly releases its ten-year forecasts, but that’s precisely what emerging mid-tier gold producer WAF has done with the release of the Group’s December 2023 quarterly report. In a show of confidence in the Group’s production capacity and mine life estimates, WAF has forecasted more than 3.6 million ounces of gold production from 2023 to 2032. WAF has achieved production guidance over the past three-years and has the fully funded long-life, low-cost Kiaka mine on track to produce 219,000oz of gold production per annum for 18.5 years from the second half of 2025. This will double annual production to more than 400,000 ounces of gold.

Full year 2023 gold production guidance of 226,823 ounces at an AISC of US$1,126/oz was met and this included 58,047 ounces of production at an AISC of US$1030/oz in the fourth quarter.

Strong 2023 financial year cash flow

WAF generated A$208 million in operating cash flow in FY23, of which A$50 million was delivered in the December 2023 quarter. Fourth quarter gold sales were 66,059 ounces at an average price of US$1,978 per ounce.

The A$208 million cash flow in 2023 was after A$59 million was paid to the Burkina Faso government for local income tax instalments. This left the Group with A$135 million in cash and A$10 million in unsold gold bullion at 31 December 2023.

WAF also has a healthy Run-of-Mine (ROM) stockpile inventory of 72,693 ounces of contained gold at 31 December 2023. This inventory level is 25 percent more than the previous quarter and 70 percent more than the ROM stockpile inventory as at the end of the 2023 first quarter. This stockpile represents ore mined but not processed into gold and provides added confidence in WAF being able to achieve future production forecasts in the medium term.

Looking Ahead

WAF’s future production is unhedged and with the price of gold currently above US$2000 per ounce, and gold sales averaging US$1978 in the December quarter, WAF can anticipate continuing strong cash flow in the foreseeable future. Updated Resources and Reserves will be released in the months ahead and this news should maintain a positive outlook for this unhedged and well managed gold producer.