A newly released feasibility update for ASX-listed West African Resources’ (WAF’s) Kiaka gold project, in Burkina Faso, shows that strong cash flows are expected from the project.

The update incorporates improvements to WAF’s initial Kiaka feasibility study that was released on August 3, 2022.

The probable ore reserve has increased to 4.8-million ounces of gold, translating to 164-million tonnes at 0.9 g/t gold at $1 400/oz.

Additionally, the mineral resource estimate is now 7.9-million ounces of gold, equating to 285-million tonnes at 0.9 g/t, pit-constrained at $2 000/oz, as announced on February 28.

The project will use conventional openpit mining with a very low strip ratio of 1.8:1 (waste) and a conventional semi-autogenous ball mill crusher and carbon-in-leach process circuit.

The ore is free-milling with a 90% gold recovery rate. The average gold production is targeted at 258 000 oz/y in the first five years, with an average of 234 000 oz/y over the 20-year mine life.

“Our updated feasibility study shows Kiaka is expected to be a long-life low-cost mining operation with 258 000 oz/y average gold production targeted over the first five years; and 234 000 oz/y average gold production targeted over the 20-year mine life from the third quarter of 2025,” WAF executive chairperson and CEO Richard Hyde said on July 2.

Efficiency improvements include the use of larger haul trucks with a 140 t payload and larger excavators with a 230 t capacity. This change increases the mining rate by 3.3-million tonnes a year over the life of the mine and is expected to drive $293-million in mining cost savings.

The revised capital for the owner-mining strategy includes pre-production development capital of $447-million, excluding owner-mining, which is within 4% of the budget. The owner-mining fleet plus earlier grade control drilling and mining add $118-million to the preproduction development capital, leading to a decrease in mining costs of $293-million over the life of the mine.

“At a $2 100/oz assumed gold price, Kiaka is expected to generate $3.4-billion in pre-tax free cash flow and pays back project development and mining fleet costs in just over two years,” Hyde added.

The updated financial metrics also show an improved post-tax 5% net present value of $1.18-billion and an internal rate of return of 27%. The improved pre-tax payback period is 2.25 years on preproduction development capital.

All-in sustaining costs are projected at $1 172/oz in the first five years and $1 196/oz over the life of the mine, with unit cost savings from owner-mining and higher gold production offset by increases in government royalties, fuel prices and other cost increases.

“The owner-mining strategy reduces operating costs and lowers production risks compared to contract mining while providing more secure employment and skills training for the local population,” Hyde emphasised.

Kiaka is on schedule for first gold production in the third quarter of 2025, with operational readiness programmes well advanced, Hyde said. The development of Kiaka is currently 50% complete, with 75% of capital costs fixed.

Equipment finance facilities will be used to partially fund the owner-mining fleet investment, Hyde explained.

Meanwhile, the group unhedged ore reserves have increased to 6.4-million ounces, with gold production set to average 480 000 oz/y from 2026 to 2031, peaking at 494 000 oz/y in 2034.

WAF is forecast to produce 4.2-million ounces of gold over the next decade up to 2033.

“We will commence employment assessments in the local and regional areas surrounding Kiaka ahead of vocational training programs throughout the second half of 2024, as we prepare to commence mining operations in the first quarter of 2025.

“As shown in WAF’s updated ore reserves and production target also released today, our group ten-year production outlook will see more than 4.2-million ounces produced over the next decade, with production expected to peak in 2030 at 494 000 oz/y of gold. Our unhedged resources now stand at 12.8-million ounces and ore reserves at 6.4-million ounces of gold,” Hyde said.