West African Resources Limited

Good morning and welcome to the West African Resources Investor webinar and conference call. All attendees are in a listen-only mode. If you would like to ask a question directly to the company, please use the raise hand function within Zoom. I'll now hand over to West African Resources Executive Chairman and Chief Executive Officer, Richard Hyde. Thank you, Richard.

Thanks, Nathan. Good morning and thank you for joining West African Resources' June quarter conference call. Joining me today are the Chief Operating Officer, Lyndon Hopkins, Chief Financial Officer, Padraig O'Donoghue, and General Manager of Finance, Todd Giltay. It's been an important and defining quarter for West African as we achieve record gold production across our gold operations at the Cana Faso, with group gold production of just over 125,000 ounces. This effort firmly demonstrates we're on track to achieve our goal to become a plus 500,000 ounce gold producer, having achieved a run rate that exceeds that target this quarter. It was another strong quarter across the group for both Sanbrado and Kiaka, contributing to year-to-date production performance and remaining on track to meet annual production guidance of 430,000 to 490,000 ounces of gold. We've achieved this at an all entertaining cost for AI SC of US$730 per ounce. This remains well under our 2026 guidance of US$1,900 per ounce all outstanding costs. And we were tracking well on that year to date with all outstanding costs of US$1,823 per ounce for the half year.

Apologies everyone, we just seem to be having a couple of technical issues. Just bear with us and we'll be back on shortly. Okay, can you hear me now? Apologies everyone, we're back now. So Richard, I'll just get you to restart from the start, if that's okay?

Sorry folks, we've had a few technical issues here. Nathan, can you hear me? Yep, we're right to go now.

Thank you. Hi Nathan, can you hear me? Yes, we're right to go now.

Thank you. Sorry about that, folks. Where do we get up to, Nathan? It's just probably best to start from the start, I think. Okay, alright, and we can just chop it off later.

Go ahead.

No worries. Thanks, Nathan. Good morning and thank you for joining West Africa Resources June Quarter Call. Joining me on the call today is Chief Operating Officer and Executive Director, Lyndon Hopkins, Chief Financial Officer, Padraig O'Donoghue, and General Manager of Finance, Todd Giltay. It's been an important and defining call to West Africa as we achieved record gold production across our gold operations in Burkina Faso, with group gold production of 125,179 ounces. This firmly demonstrates that we're on track to achieve our goal of becoming a plus 500,000 ounce gold producer, having achieved a run rate that exceeds that target this quarter. It was another strong quarter across the group, with both our Sambrada and Kiako production centres contributing to year-to-date gold performance, and remaining on track to meet annual production guidance of 430,000 to 490,000 ounces of gold. We've achieved this at an almost adjoining cost of and others. Group Gold sales for June quarter were 110,737 ounces at a realised price of US$4,556 per ounce. Year-to-date group gold production reached 232,905 ounces, while our year-to-date gold sales were 214,883 ounces at a realised price of US$4,744 per ounce. In addition, we've had great success with the drill bit this quarter, reporting outstanding infill and extensional drilling results from the M5 deposit at Zambrano, and I'll go into that in more detail shortly. At Zambrano, our team delivered over 57,000 ounces of gold production and over 45,000 ounces of gold sales at a realised price of US$4,568 per ounce. Production increased 37% compared with the prior quarter, mainly reflecting higher mill grade driven by increased tonnes and grade from underground mining. Zambrano underground performance was a key contributor. M1 South underground mined 1,000 and others. O'Donoghue is the owner and operator of 167,000 tonnes of ore at 8.1g per tonne for 43,644oz of gold in the quarter, with underground mine ounces 60% higher than the March quarter and the grade also improved 9%. Open Pit Mining continued to ramp up during the quarter. Sambrado's process plant continued to perform strongly, milling 787,000 tonnes at a head grade of 2.4 grams per tonne and a recovery of 93.7%. Pre-strip mining activities at Sambrado Satellite Deposit Toeda continued at a much higher rate in Q2 and included first-door mine from the Stage 1 pit. Sambrada was produced just under 100,000 ounces for the half year. And at Kiaka we achieved quarter production of over 67,000 ounces of gold, slightly up on last quarter, and sold over 65,000 ounces of gold at a realised price of US$4,548 per ounce. Kiaka continues to be an important part of the group's production profile. having produced more than 130,000 ounces of gold for the year today. Mining activities remain focused on the Kiyaka Main Stage 1 pit, while increased mill throughput supported higher gold production. Open pit mining production at Kiyaka did slow during the quarter due to limited supply of explosives, with our Kiyaka explosives facility still awaiting operational approval from the government. Our 2026 Kiaka plan has been adjusted to concentrate on areas of free dig. We also reduced waste dripping at Kiaka and Tolega to allocate the available explosive supply to all production. In terms of cash balance, we ended the quarter with $876 million Australian dollars in cash and $247 million worth of unsold gold bullion, reflecting a very strong balance sheet. I'll now hand over to Padraig to discuss the finances in more detail. Thanks, Padraig. Thank you, Richard. The WAP group generated Australian dollars $711 million of gold sales revenue in the quarter from a record buy, 110,737 ounces of gold sold, and an average realized gold sales price of $4,556 U.S. dollars per ounce. Our notional net cash, which is calculated as cash plus bullion minus debt, increased by U.S. dollars 48 million in the quarter to sit at roughly half a billion U.S. dollars at 30 June 2026. This cash field in the quarter was after the group fully cleared its 2025 income tax and dividend payment obligations to the Burkina Faso government. As reported in our Appendix 5B, we generated Australian dollars 249 million of operating cash flow in Q2, and ended the half year with a record high cash balance of $876 million as said by Richard. Our capital investing activities in Q4 used $112 million Australian dollars cash which comprised $12 million Australian dollars for Sombrato, $30 million for Tuiga and $70 million for Chiaca. Financing activities used $105 million Australian dollars cash in Q4 mainly comprised of $24 million of loan payments and 11 million of interest payments and the priority dividend to the Burkina Faso government of 67 million. I now hand back to Richard for his comments. Very good. Thanks, Padraig. As mentioned earlier, the mining in Toowega progressed that project on several fronts during the quarter. However, the Stage 1 pit is currently behind schedule and all delivery to the Sanbrado Mill is expected to be delayed due to a lack of explosives and others. The construction of site infrastructure including workshops and offices continues to progress on schedule with completion expected in Q3. All rope construction has now been completed and a preferred local contractor has been selected for ore haulage to Tambrado. The 13,500 metre infill drilling program targeting the Toowiga underground resource is ongoing. with results expected to be reported in Q3. That brings me on to our exploration efforts, which continue to demonstrate real value to West Africa. We're on track to achieve more than 100,000 metres of drilling across Zambrano, Tiaka and surrounding areas in 2026. During the quarter, outstanding infill and extensional results were reported from M5 Underground, targeting conversion of inferred mineral resources between the 1800 and 1600 Levels which is approximately 500 to 570 metres below surface and great control of the lower levels of your reserve. A highlight result from the diamond drilling program below M5 was 27 metres at 6.7 grams per tonne and our infill diamond drilling also returned some outstanding results including 29 metres at 16.4 grams per tonne gold 39 metres at 5 grams per tonne gold and 13 metres at 9.9 grams per tonne gold. These results confirm the quality and consistency of Sanbrados ore bodies and highlight the potential for significant ore reserve growth at M5 South. Post quarter, we also reported infill barman drilling completed within the ore reserve at M5 North. and these results will be incorporated into an updated resource model and will support a final pit design update along with an optimisation of the Sambato mining schedule which is also underway in preparation for the updated 10-year production forecast due in Q1 2027. Our drilling focus will now shift to other areas of the N5 deposit targeting further resource and reserve growth opportunities. We also expect to release results from Toowiga Underground during Q3. In regards to our permitting, in addition to our Kiaka Explosives facility, we're awaiting approval to include Sambaro M5 South Underground in our Life and Mine Plan. To start mining there, we've got it in the Life and Mine Plan already. While we expect this is the second half of this year, we don't see any impact on overall production for 2026. but we're now planning that underground mining at M5 South will commence in early 2027, subject to the government's approval. But we believe there's sufficient flexibility within the life of mine plan, like I said, to maintain our production targets for 2026. Discussions continued during the quarter with the state-owned Sophamib, regarding its acquisition of 25% of Kiaka. for 70 billion CFA francs, which is approximately 176 million Australian dollars. This is expected to be finalised in 2026 and we continue to work cooperatively with Sovereign Move on this. As we look through our ESG reporting, our safety performance remains strong with no significant health or safety incidents during the quarter and a total reportable injury frequency rate of 1.25, or tripled as 1.25. and in comparison to WA's gold industry's most recent result of 5.57 shows that we're still a very safe operator of the Canifaso. We continue to advance our biodiversity strategy during the quarter as well with the corporate sustainability team working alongside the site environmental managers and biodiversity specialists to develop species action plans for priority flora and fauna. Planning also commenced for the 2026 reforestation campaign During the quarter our operations supported Burkina Faso's 8th National Tree Day, donating trees grown in our on-site nurseries. Tree planting activities were also carried out across our sites using locally significant species. Social Investment in the Corner continued on education, livelihood restoration and resettlement and at Kiaka with our supplier Oryx we progressed the construction of a new preschool in the town of Gogo and that's now more than 70% complete. The outcomes from our vocational training program remain strong with 76% of participants starting businesses or continuing further education and 7 cooperatives trained in sustainable bio-fertiliser production. At Toowiga about 90% of households have moved into their new homes at the Toowiga resettlement site and community engagement is underway to support safe all haulage from Toowiga to Sanbrado. We've held community meetings across nearby villages to inform and educate community members on the haul road. The use of community crossings changes the haulage schedules and patterns and other related safety matters. to help ensure we can operate this road as safely as possible. In closing, I'd like to congratulate our team on defining June 2026 quarter. We delivered record production, strong financial performance and continue to demonstrate the quality and longevity of our assets through outstanding, thrilling results at M5 and steady progress at Toega. Our balance sheet is robust and our operations are performing safely and reliably. and we remain firmly on track to meet our 2026 production cost guidance. With a railroad of over 500,000 ounces and a strong pipeline of growth and a clear strategy, West Africa is exceptionally well positioned for the second half of 2026 and beyond. Thanks, Nathan.

Thank you. Just a reminder, if you would like to ask a question directly to the company, please use the raise hand function within Zoom. Your first question comes from Mike Milliken at Euroz Hartleys. Please go ahead, Mike.

Thanks, Nathan. Thanks, Richard. Just a very quick question, firstly on the priority dividend obviously paid to the government and what it means to WAF. Could you just chat through with holding tax and how it means for repatriation of funds and stuff like that. If you've got five seconds. Thanks.

I'll pass it on to Padraig so he can run you through that. Cool. During the end of 2025, the dividend declarations that address the 2025 financial year, the operating subsidiaries declared dividends that fully paid the government its priority dividend and also fully paid last its share of and then also last previously unpaid share of retained earnings dividends. So it was a big catch-up dividend paid in 2026 related to 2025. So that created a very large dividend but also a very large withholding tax. So that explains the high withholding tax on those dividends.

Yeah, gotcha. That's really good. and also just, you know, obviously explosives, watching that shortage in country, you know, you guys still waiting for your permit for the manufacturing and storage. How's the permit going in regards to that? Is it kind of, you know, how long is the piece of string or is it something that the government's looking to address pretty soon? Thanks.

I'll just let Lyndon Hopkins answer that question. Thanks, Mike.

Yeah, thanks, Mike. Look, we've been working very closely with our supplier, Maxim, for a while now with the government to expedite this, and we've had a number of site visits recently to check on safety standards and that sort of thing, so we're hopeful that it'll progress. We've also pointed out to them the damage that it's caused to our production profile into the future as well, so... We're hopeful that we can get a result.

Yeah, good. And also, just finally, also on the underground mining there at M5 South, obviously reading the life of mine plan, you know, you're talking about maybe delaying or getting delayed because of the permitting that comes in early 27. Any sort of changes, you know, I assume you can just change around a little bit on the mine plan, but can you just see sort of the impacts we might expect there? Thanks.

Yeah, hi Mike, it's Richard. We're kind of fortunate that we've got quite a flexible mine schedule and at this stage we're probably accessing more of M1 South and more of M5 Open Pit and there's some other areas in M1 Underground that we can access as well. So we don't see any impact across our projects this year for either the permitting of the Underground or and the permitting of the explosives. I'm confident that we can catch it up in early 2027, but they're critical for us. We need to get the underground online and we've provided the government with all of the information required to do that. We're expecting that to be granted in the back half of this year. and let me just mention with the permanence of the explosives, we're fortunate that KIAC has got a number of areas of free digs that we can access, which is what we're doing. So we're mining into some of our other stage pigs a bit earlier than we would have expected. But again, it kind of shows how robust and flexible the projects are. Yeah, cool.

And just finally, very last one for me, just talking about... and M1 South. Obviously some really nice grades coming through now. Is that progressing into the next quarter as well? That was a nice kick-up on Granger and Q1Q.

Yeah, you would have seen in Q1 we had a lot of development and we're kind of reaping the benefits of that now in Q2 and Q3 for the rest of the year. So we expect that strong production from the only grounds to continue for the rest of the year.

Yeah, cool. Thanks very much. Appreciate it, guys.

Thank you. Your next question comes from Regan Burrows at Macquarie. Please go ahead, Regan.

Hi, Richard and Padraig. Thanks for taking my questions. Just in terms of, I guess, if the permits don't come through over second half or if they're sort of a little bit delayed and towards the back end, I mean, what's the delta in terms of the grade and tonnage from that free dig material versus, I guess, the unconstrained mine plan?

Well, no, at Tiaka, no difference in grade. So the grade is very consistent across. So, you know, we're just accessing near a surface softer material at the moment. There'll be a catch-up, but there's a lot of capacity in the mining fleet at Tiaka, so we don't really see any impact in that at this stage. And then with, you know, with Zambrato and M1 South, obviously, contributes the bulk of the ounces for D'Ambrato production. We'll just have to, the delta will be, you know, the only ground's about three grams and the open pit's about one gram, so the delta's about two grams. But, you know, I think, you know, we're pretty confident we'll get those permits in the back half this year and we shouldn't see any impact into 2027. I mean, we've got and the rest of 2026 for the development that's been done in the early part of this year. So, yeah, we're confident there should be no impact, but it's, you know, we need permits, that's for sure, for the longer term production of the projects.

and just on Kiaka with the explosives, I mean, I think you mentioned just before the supplier that you're working with, is it sort of just a lack of availability that's sort of constraining and forcing you to sort of focus on a fairly good material or is it higher cost as well?

No, we've got a contract in action, so the cost is fixed. It's availability. We previously operated our explosives magazine at Zambrano and that needs to be refounded and we've also got a fully functioning facility for manufacture of explosives at Kiaka which is yet to be approved by the government. So currently there's only limited manufacture of explosives in country and again We're fortunate that we've got flexibility in the mind, she's all that we can work around at the moment.

Great, thanks. I just might spread another one in. Just in terms of the soft mid-payment, obviously it's tied with that change of ownership. I mean, what's left to negotiate and finalise there?

Well, the terms that are in the decree, which have been published by the government, so that's the $70 billion SIFA and the percentage, so there's no negotiating around that. We're just finalising the documentation for government and we expect to have that completed in the next quarter.

Okay, so targeting in the next quarter. Awesome.

I'll leave it there. Thank you very much, guys. Okay, thank you. Thank you. There are no further questions at this time, so I'll now hand back to Richard for closing remarks.

Thanks, Nathan. And look, thanks again to all of our supporting shareholders who have been with us for a long time and congratulations to the WAF team again for a wonderful quarter. and we look forward to a strong second half of 2026.