West African Iron Ore Drills Wondima Target


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TSX.V:WAI
05/10/2012 [ACCESSWIRE] SOURCE: [Metal Investment News] - The International Monetary Fund (IMF) recently announced that democratic reforms in the West African country of Guinea make it a candidate for debt relief. Last week the Paris club of creditor governments agreed to provide $344 million in debt relief to Guinea, including more than $151 million in debt cancellation.

After years of military leadership, the West African nation has been transitioning to civilian rule, creating a safer political environment to explore Guinea’s massive iron ore deposits. The Chinese are reported to be spending $25 billion on developing West African Iron Ore supply chain.

One beneficiary of these shifting tides is West African Iron Ore (WAI-TSX.V) – a Canadian-based company engaged in the acquisition, exploration and development of iron ore properties in Guinea.

Investment Highlights

  • Two iron ore permits in the Republic of Guinea, West Africa: Forécariah and Kérouané.
  • An exploration target was calculated for the Sambalama, and Kalyadi targets (both on Forécariah), of between 2.9, and 5.1 billion tones, with average grades of 25% – 35% Fe.
  • Drilling commenced in April 2011, with aims to define an initial 43-101 resource estimate by the end of Q4 2012 on Forécariah.
  • WAI recently discovered two highly prospective new targets in the northern area of the Forécariah permit, including the Wondima target.
  • The company is actively seeking investors and strategic partners in China.
  • Attractive takeover target. The company has a strong board of directors with extensive experience in mergers and acquisitions.

WAI’s primary objective is to maximize shareholder value by identifying and developing commercially exploitable iron ore deposits.

Forécariah Update:

On the Kalyadi prospect, the Company has completed 9 diamond drill holes (“DDH”) totalling 1,924 metres and 3 reverse circulation drill holes (“RCH”) totalling 321 metres drilled. On Sambalama 12 DDH totalling 2,169 metres and 57 RCH totalling 7,125 metres have been completed to-date. WAI intends to compile its first NI43-101 compliant resource report by Q4 2012.

Assay data has been received for 15 DDH on the Sambalama/Kalyadi prospect, (8 of which are included below). Results are also reported for 12 out of 20 RCH on Sambalama. The grades and the analytical results for 7 of these holes appear to demonstrate that this material could be favourable for shipping with minimal processing (Direct Shipping Ore or DSO).

On-going surface sampling and mapping on Sambalama and Kalyadi has generated new surface targets with the potential for the delineation of additional DSO prospects from an iron-rich laterite cap that will be verified with a planned drill program once the drilling on the Wondima prospect is complete.

Wondima Target

After completion of follow-up geological mapping on the Wondima prospect, as well as a systematic surface sampling program on a grid of 400m X 200m over an area of 50 km2 over the target, WAI decided to mount an intensive 8,000 metre drilling program across an area in excess of 40 km2 that will include 56 diamond drill holes and 233 Reverse Circulation Holes.

The Wondima target has the potential to create quick cash flow for the company as the identified anomaly is an oxide cap located from surface to a depth of up to 20 metres.

The central part of the target consists of about 26km² of raised plateau with a flat and hard iron rich cap. 224 surface samples were collected from the target area during mapping and the average Fe content was estimated to be 34.73% using a hand held NITON XRF.

Three hundred and eighty samples, representing 62 RCH completed on the Wondima prospect have been shipped for analyses to Reno, Nevada. Results are anticipated to be received by the end of May 2012.

Guinea’s mining code is becoming more sophisticated and transparent. The government is now entitled to own up to 35% in the share capital of mining companies in Guinea.

This participation is divided into two parts. One is free and non-dilutive, the “National Interest”, which is fixed at 15% (in the case of bauxite, iron ore, uranium, gold and diamonds). The other is a maximum 20% “Contributing Interest”, on a fully paid basis. Anti-bribery provisions have also been implemented.

The economics of an iron ore project depend on transportation costs.

“The strategic location of the property means that WAI has a significant advantage over other iron ore projects in the country,” states a recent Fundamental Research Report, “There is high potential to capitalize on near term infrastructure improvements in Guinea. Proximity to the proposed deep water port has the potential to create further upside for WAI by further reducing costs”.

Canaccord Genuity has been appointed to assist WAI in identifying strategic partners in China. “The keen interest expressed by a number of potential strategic partners with which we have consulted, gives us confidence that our future financing plans are achievable without imposing an undue burden or dilution upon our balance sheet and shareholders” states CEO Guy Duport.

West African Iron Ore is currently trading at .08 with a market cap of $13 million.

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