Modern Mining June 2017

WEST AFRICA

Study indicates favourable economics for Sanaga

W hile the commodities collapse has had a negative ef- fect on West Africa’s many iron ore projects, with several of them now effectively on hold, at least one is making some progress. West African Minerals Corporation (WAFM), whose shares are quoted on London’s AIM, has an- nounced the details of its recently completed Scoping Study on the Sanaga project located near the Port of Douala in Cameroon. According to WAFM (formerly Emerging Metals Limited), the Scoping Study indicates robust economics and favourable capital and operating cost fundamentals for an open-pit iron ore mine and concentrator using transportation to the Cameroon coast either by barging down the Sanaga River and transhipping at sea or using a slurry pipeline to a port in the vicinity of Yoyo. The Sanaga deposit contains previously released CIM-compliant min- eral resources of 82,9 Mt at 32,1 % Fe. The Scoping Study was prepared by independent consultants, Royal HaskoningDHV (RHDHV), in accordance with the JORC Code (2012). The base case is stated on a pre-tax and royalty basis assuming 100 % project ownership and using five-year historical average iron ore prices. Key outcomes include an NPV 10 of US$262 million to US$292 million, an IRR of 29 to 37 % and upfront capital costs (depend- ing on the transport option adopted) of US$194 million to US$298 million. Payback is put at 29 to 46 months and the study estimates 24 months to full production from the final investment decision. Gerard Holden, Chairman of WAFM commented: “WAFM is very pleased to announce the results of an independent Scoping Study which has identified two potential pathways to produc- tion of 2,4 Mt/a of premium grade iron ore concentrate. “The geometry of the mineralisation, which outcrops at sur- face, lends itself to low cost, low stripping ratio open-pit mining. Metallurgical testing on the primary magnetite ores indicates that the project can produce a high-quality iron ore concentrate prod- uct (69 % Fe) that will command a premium price in the market place. The Sanaga project’s proximity to the ocean and access to existing road and power infrastructure allows low capital expen- ditures and a short timeframe to develop export infrastructure.” 

Location of WAFM’s licences, including Sanaga, in Cameroon.

June 2017  MODERN MINING  39