WAF - West African Resources

[Sean K]

WAF has been a champion the past six months and hitting resistance again. Not sure if it has the legs to break or not.

I don't think this flag could break up unless POG jumps 5%.

 

[mullokintyre]

I am going to hang on for 1.50 to sell the remainder.
Already made some good profits from this one, going for the icing on the cake.
Mick

Got my 1.50 today.
Going out tonight to buy some expensive cocktails.
Mick

 

[finicky]

 

[mullokintyre]

View attachment 176951

@finicky , are you suggesting that all the low hanging fruit has been picked?
Mick

 

[finicky]

Nah .. "bringing in the sheaves" sort of motif.
P.S it's not the lowest hanging bunch in the gif lol

Held

 

[Sean K]

MC now rocking $1.6b and has way outperformed a lot of the sector the past six months. Was always oversold last Sep. I assume it keeps charging along while POG continues to make ATH after ATHs. Old resistance should be support now, if it ever goes back there.

Would be a good time to bring out some more 1000+ ggm drilling results.

 

[finicky]

Would be a good time to bring out some more 1000+ ggm drilling results.

Oh, more of those (stifles yawn)

 

[Sean K]

Old resistance confirmed as support over the past couple of weeks and making new ATHs now. Glad I held half of it after taking profits but you know the old story, could have just held too, or bought more. Great in retrospect.

Must be due for some drill results and a Kiaka update.

 

[Sean K]

Bouncing off that support.

These two M1 shoots look like they're going to go to depth. The Northern Shoot not quite as spectacular as M1S, but pretty darn good. Looks like they might come together at some stage.

Since they're so close it'll be easy to put some cross tunnels in and exploration drives at depth to see what else might be down there. Maybe there's a Swan?

Even if there's not, these hits will extend LOM for Sanbrado, or they increase the mill throughput.

 

[finicky]

Springing a capital raise.
Drift from elsewhere is that it's for Kiaka and likely for purchase of an owner operated mining fleet?

Don't know the source of the following:

"West African Resources was in front of fund managers on Tuesday, seeking to raise $120 million via a single tranche placement.

The 87.6 million new shares were offered to investors at $1.37 apiece, a 13.8 per cent discount to the company’s last traded price and a 13.6 per cent discount to the five-day volume-weighted average price.

Euroz Hartleys was sole lead manager on the transaction, the proceeds of which will largely go towards funding WAF’s Kiaka gold project."

Held

 

[Sean K]

Springing a capital raise.
Drift from elsewhere is that it's for Kiaka and likely for purchase of an owner operated mining fleet?

Don't know the source of the following:

"West African Resources was in front of fund managers on Tuesday, seeking to raise $120 million via a single tranche placement.

The 87.6 million new shares were offered to investors at $1.37 apiece, a 13.8 per cent discount to the company’s last traded price and a 13.6 per cent discount to the five-day volume-weighted average price.

Euroz Hartleys was sole lead manager on the transaction, the proceeds of which will largely go towards funding WAF’s Kiaka gold project."

Held

View attachment 179776

I'm sure they only recently said they were well funded for everything....

 

[peter2]

Cap raise at 13% discount so anticipate a price dip. Lie back, relax and let the bubble rise. Hope it doesn't pop (sov risk).

 

[Sean K]

A lot can happen in 11 days:

 

[finicky]

From 'Small Caps' yesterday:

"Owner-mining strategy

The Kiaka update is based on a mineral resource estimate of 285 million tonnes grading 0.9 grams per tonne for 7.9Moz gold (6Moz indicated and 1.9 Moz inferred from an open-pit model constrained at US$2,000/oz).

The probable ore reserve has increased to 4.8Moz gold (or 164Mt at 0.9 g/t at US$1,400/oz).

This incorporates a change from contract mining to a lower-risk owner-mining strategy, allowing West African Resources to realise greater benefits from the long life and consistent mining rates of the large-scale operation.

New equipment​

The company will make a US$102.7m investment in new mining and ancillary equipment, as well as a spare parts inventory and fully-equipped mine maintenance facilities.

Larger 230-tonne excavators have been matched to 140t dump trucks compared to the 140t excavators and 95t trucks used in the original study, allowing for a 14% increase (or 3.3 Mtpa) in the annual mining rate.

Extensive metallurgical test work indicates the project will deliver life-of-mine gold recoveries of 90% at a nominal 100-micron grind size.

Reduced cost, lower risk​

Chief executive officer Richard Hyde said the owner-mining strategy would reduce operating costs and lower production risks while providing secure employment and skills training for the local population.

“Our plan to use larger payload trucks and excavators is expected to increase our mining rate and drive US$293m in savings across the life of the mine,” he said.

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

Mr Hyde said 50% of Kiaka’s development had been completed and the project was on schedule for first gold production in mid-2025."

 

[finicky]

The preso today refreshed my memory as to just how much the straight outta Compton junta will be extracting from Kiaka through the ironically termed 'Government Participation'. This 'participation' is:
free carry of 10%,
royalty of 5-7%,
community development 1%,
income tax 27.5%.
Same terms as Sambrado.
Stopped me dabbling with thoughts of adding shares.

Held
Plan is to reduce to free carry @ $2.30 if it gets there in a cal 2025 bull market. Reason being the government.

 

[Sean K]

The preso today refreshed my memory as to just how much the straight outta Compton junta will be extracting from Kiaka through the ironically termed 'Government Participation'. This 'participation' is:
free carry of 10%,
royalty of 5-7%,
community development 1%,
income tax 27.5%.
Same terms as Sambrado.
Stopped me dabbling with thoughts of adding shares.

Held
Plan is to reduce to free carry @ $2.30 if it gets there in a cal 2025 bull market. Reason being the government.

On the other hand, in a region with so much perceived political risk, why would the government do anything to stop that cash rolling in for doing nothing? It actually makes it a very important government asset that will be nurtured. One of the reasons why developments in WAf seem to get permitted so quickly. Probably a better deal than trying to develop something in WA or QLD.

 

[finicky]

@Sean K that's a point I guess. I'm not begrudging some of the imposts like community development, tax obviously, but the size of the royalty and particularly the 10% free carry gets on my wick. They are already employing natively and lots of ancillary work too it looks - e.g there's a pic of a woman at a sewing machine running up uniforms, catering and food I imagine. But as you say it makes the company less dispensable.

 

[Chipp]

There is a reason i never buy a stock mining in Africa and sure there are successes but thats far outweighed by the opposite . I know nothing about this particular country and it might have a great govt for all i know but that would be the exception to the rule . Couple years back I did a comprehensive spreadsheet on every ASX listed goldie i could find and WAF stood up well on most metrics but the geoplitical thing stopped me buying any . As a trading stock it might be fine as it has great moves over 2-3 months but there is zero chance it could ever be a buy/hold for me .

recent price action looking a lot like white flag wave to me .

 

[peter2]

Doing a few back of the envelope calculations. Market cap before Cap Raise approx 1.64B . Post raise Mkt Cap 1.57B with the extra capital to finish new mine that will double their output.

I'm buying this dip as a speculative position with a tight exit stop in case my timing is wrong.

 

[finicky]

it might have a great govt for all i know but that would be the exception to the rule .

Yeah, no, it isn't great and not an exception. Also islamic militant action to the north. I'm gambling for a price spike allowing me to reduce and free carry.

Burkina Faso government