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West African Minerals (LON:WAFM) has identified two new potential iron ore deposits in Cameroon and Sierra Leone from its recent geophysics and mapping programme.
At Sanaga, in Cameroon, WAFM will now carry out reconnaissance drilling and first stage metallurgy after a magnetic survey confirmed large areas of magnetite–rich material at the surface and close to rail, port and power infrastructure.
Because of this potential, follow-up work at Binga, also in Cameroon and where WAFM has carried out some preliminary work, is being deferred while the drilling at Sanaga is carried out.
Anton Mauve, WAFM’s managing director, told Proactive Investors, the economics of the two new finds eclipsed results from its work on other licences in the region.
Sanaga surprised in “a very positive way” he said and now outweighs Binga and everything else, though Madina ranked a very close second.
“Sanaga was the last lease we [WAFM] got to and it wasn’t until we had a good look with detailed mapping and ground geophysics that we realised it all added up and was a phenomenal deposit.”
“The key issue now is the metallurgical test as we know the iron grade and volumes are there.”
The project is also just 60km away from the coastal port of Douala and has a rail line with unused annual capacity of 2Mt going right by.
Mauve says results from the metallurgical work should be ready in 6-8 weeks or possibly even earlier, after which it will make a decision on which deposit it start drilling, though it seems pretty clear he expects Sanaga to be the priority going forward.
“For resource quality, style of resource, for shape, for proximity of infrastructure, existing infrastructure it (Sanaga) ticks all of the boxes.
“The only one it doesn’t yet is metallurgy, which we are working on currently.”
Madina, too, has turned out far better than expectations, he said.
Located 70km from London Mining’s Marampa mine on the same hematite formation, Mauve says it hoped to use six trenches dug recently to indicate a 100Mt deposit with good grades.
“But we know it’s going to better than that,” after a strike 1.5km in length with an average width at surface of 220 metres. First assays showed grades of between 38.5% and 41.4% iron.
“It will require a relatively modest effort to outline the full extent of this mineralisation within open pittable depths," WAFM’s president Brad Mills said in the statement.
Mauve added WAFM is looking at its options for Madina, which range from a standalone operation to a disposal perhaps to one of the nearby operations or even to overseas buyers.
Elsewhere, WAFM added it had also identified iron mineralisation at its licences at Lele and in the previously unexplored areas of Djadom.
Brad Mills, WAFM’s president, said the discovery of the new set of targets at Sanaga, in addition to the previously reported Binga resource, had given WAFM potentially two start-up opportunities in close proximity to existing and developing rail and port infrastructure.
“Our current funding will allow us to develop either Binga or potentially Sanaga towards a 60-100mt mineral resource estimate (MRE) in December and a preliminary economic assessment (PEA) in the first quarter of 2015."
Shares rose 10% to 5.9p.