West African Resources (WAF) has released the optimised Feasibility Study for the Sanbrado Project in West Africa. The study has built on the 2017 open pit Feasibility Study and now includes a substantial underground component following the discovery of the high grade M1 South Lode. The study assumes capital costs of US$185m with average annual production of 211koz over the first 5 years and all-in sustaining costs (AISC) of A$853/oz over the Life of Mine (LOM). The project is robust on a number of gold price sensitivities with an NPV5% (vs Argonaut NPV9%) of $540m at US$1,300/oz gold prices (100% basis, vs Argonaut NPV $355m at 80%), an after-tax IRR of 49%, a projected payback of 16 months and an initial 11-year mine life. The company is advancing towards a number of milestones in the coming months including the Formal Investment Decision (FID), commencement of early works and project financing. BUY recommendation maintained with a revised target price of $0.52ps (prior $0.66ps).
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