Financial Report for Half Year Ending 31 December 2013
Perth, Mar 13, 2014 AEST (ABN Newswire) - The operations and results of the West African Resources (
ASX:WAF) (CVE:WAF) for the financial year are reviewed below. This review includes information on the financial position of the Group, its operational activities for the year and its future business strategies.
Operating results for the year
The net loss of the Group for the half-year ended 31 December 2013 was $3,245,805 (2012: $3,052,972).
Revenue
Revenue comprised interest received and net foreign exchange gains. Interest was down 81% on the previous corresponding period as a consequence of lower cash balances and lower interest rates. Net foreign exchange gains were down 41% due to lower foreign currency holdings.
Expenses
During the half year, the Company continued exploration activities at its various exploration projects with expenditure on exploration decreasing 6% to $2,125,965 (2012: $2,261,280).
Cash and cash equivalents at 31 December 2013 decreased by 60% to $1,316,547 (30 June 2013: $3,328,461). The decrease in cash and cash equivalents by 74% to $1,316,547 during the six months ended 31 December 2013, arose due to the following reasons:-
Operating cash flows
Cash outflows from operating activities increased by 8% to $2,952,206 (2012: $2,733,643) mainly because of the increase in permit renewal costs for existing permits in Burkina Faso.
Investing cash flows
Cash outflows from investing activities increased by 370% to $1,829,841 (2012: $389,104) due mainly to the acquisition of 19.9% of Channel Resources Ltd and partly as a consequence of legal costs incurred in relation to the Channel Resources Ltd Plan of Arrangement transaction.
Financing cash flows
Cash inflows from financing activities decreased by 36% to $2,683,461 (2012: $4,198,909) due to less funds being raised from an equity placement in September 2013 compared to an equity placement in September 2012, with 19.1 million and 22.4 million shares being issued at 15 cents and 20 cents respectively.
Statement of financial position
Current assets
Current assets decreased by 54% to $1,568,408 (30/6/13: $3,409,666) mainly due to cash and cash equivalents decreasing 60% to $1,316,547 (30/6/13: $3,328,461).
Non-current assets
Non-current assets increased by 202% to $1,798,074 (30/6/13: $594,528) due to the purchase of Channel Resources Limited.
Current liabilities
Current liabilities decreased by 45% to $347,930 (30/6/13: $637,425), being a reduction in the creditors for assaying and equipment supplies.
Debt position
The Company has no debt.
Operational activities for the year
Exploration
Work commenced at the Moktedu Prospect during the half year, which is located some 10km north of the newly acquired Tanlouka Permit. Work continued at Sartenga with diamond drilling adding more confidence to the geological model. Drilling has recently finished at Sartenga, after the reporting period, with the Company?s activities shifting to work programs at Mankarga 5, including RC drilling, metallurgical diamond core drilling and oriented diamond core drilling. The Company?s objective is to develop a low cost heap leach operation from the combination of the Mankarga 5 deposit and nearby prospects including targets at Moktedu and Goudré. To achieve this stated goal the Company will complete a resource update at Mankarga 5 and Moktedu during the March quarter, leading to the completion of a scoping Study and Preliminary Economic Assessment (PEA) in the June 2014 Quarter.
Corporate
In September 2013, the Company completed a placement to raise $2.9 million (before costs) by issuing 19 million ordinary shares at $0.15 per share. Funds from the placement were earmarked to accelerate resource definition drilling at WAF?s Moktedu Project and on the adjacent Tanlouka Gold Project, following completion of the acquisition of TSXV Channel Resources Limited ('CHU'). The placement was made in accordance with the Company?s available 15% capacity pursuant to ASX Listing Rule 7.1.
Also in September 2013, a 19.9% holding in CHU was completed with a $1.5m investment during September 2013.
The period saw the Company continuing with work on the acquisition of TSXV Channel Resources Ltd through a plan of arrangement, with final approvals from the TSX granted after the half year end, on 17 January 2014. The focus of the acquisition by West African was Channel?s main asset, the Tanlouka Permit, which includes the Mankarga 5 project.
Future Business Strategy
The Company's future business strategy includes:-
- to keep diamond drilling at Sartenga with a resource upgrade by year end with the focus on grade and width and to follow-up the new gold zone 4km south of main zone;
- further metallurgical test work and completing a scoping study in early 2014; and
- targeting near term production from a low capex heap leach project at Moktedu and Tanlouka.
To view the complete Half Year Financial Report, please visit:
http://media.abnnewswire.net/media/en/docs/76753-ASX-WAF-670756.pdf
About West African Resources Limited
West African Resources Limited (
ASX:WAF) (CVE:WAF) is a gold-copper exploration company dedicated to creating shareholder value through the acquisition, exploration and development of resource projects in Burkina Faso, West Africa.
West African has a landholding of 6,370sq km and 200km of strike length of early Proterozoic Birimian greenstone belts, which are highly prospective for gold mineralisation.
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