West African Resources Limited

recording in progress good morning and welcome to the west african resources investor webinar and conference call all attendees are 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 executive chairman and ceo richard hyde thank you richard thanks nathan good morning and welcome to the december 2025

Investor Conference call for West African Resources, and thanks for joining us today. Joining me on the call today, we have our Chief Financial Officer, Padraig O'Donoghue, and our General Manager of Finance, Todd Giltay. Our Chief Operating Officer, Lyndon Hopkins, is on site at the moment in Burkina. The December 2025 quarter has delivered another strong period of gold production across both our Sanbrado and Kiaka gold operations in Burkina Faso. with just over 112,000 ounces of gold produced across the operations, delivering an operating run rate that bodes well for our gold production in calendar year 2026. Our total gold production for calendar year 2025 was a touch over 300,000 ounces of gold, with Kyaka stepping up in Q4. This was well within our production guidance for the year. What's more is that we completed this achievement with no significant health, safety or social incidents, which is especially important to us and demonstrates our commitment to operating in a safe and responsible manner at all times. We sold 105,995 ounces of gold at an average price of $4,058 per ounce for the quarter, and we remain fully unhedged. therefore allowing WAF to take full advantage of the record gold prices we are currently seeing. With our all-in standing costs averaging US$1,561 per ounce across the two operations, we've been able to deliver AU$389 million of cash flow in a quarter, and that's after making income tax payments. of AU$48 million. Our cash balance at 31 December 2025 is AU$584 million, plus we still held another AU$177 million worth of unsold gold bullion, and that's just due to timing of shipments. Looking at our sites, the Kiyaka ramp-up has been excellent since its second quarter start-up. And its performance in Q4 really demonstrated that. This is the first full quarter of operations for the site. It produced 63,287 ounces of gold for the quarter, surpassing production at Zambrano for the first time. Kiyaka's costs continue to improve as production has increased. which was what we expected, and it's pleasing to see this pounding out. We expect costs to further reduce as our reliance on diesel-generated power reduces over the coming quarters. QR can produce just over 95,000 ounces of gold for the year after commencing operations in Q2 and having a short and operational phase in Q3. Open pit mining continues to ramp up as more equipment is commissioned for use. At Samburado, our steady production continued and we produced just under 50,000 ounces of gold for the quarter, bringing our total for the year to 205,228 ounces. Samburado performed well against production guidance, achieving the upper end of our 190,000 to 210,000 ounces production range. Open Pit recommenced in the quarter under our new owner mining operating model. Open pit mill feed in Q4 was sourced from both the M5 north pit and previously mined ore stockpiles. Mined ounces for the quarter from M1 south underground was 37,955 ounces, which was 16% below the previous quarter. This was due to a 14% drop in mined grade, as well as slightly lower ore tonnes mined. With that overview of our production, I'll hand it over to Padraig to discuss our financial details for the quarter.

Thank you, Richard. WAF, as Richard mentioned, WAF has benefited tremendously from being unhedged and generated $662 million Australian of gold sales revenue in the quarter, an average realized price of US dollars $4,058 per ounce. For the full year 2025, WAF generated more than Australian $1.5 billion of revenues. As Richard mentioned already also, we generated $389 million of operating cash flow in Q4 and ended the year with a very strong cash balance of $584 million Australian. Our capital investing activities in Q4 used $113 million of cash, which included $89 million for Kiaka and $23 million for Tawiga. Financing activities used $23 million of cash in Q4, with payments for loan interest, principal and financing expenses offsetting cash received from the drawdown of equipment finance facilities. I now hand back to Richard. Thanks, Frederick.

So, on the exploration front this quarter, diamond drilling beneath the M5 open pit or reserve has confirmed potential for us to extend open pit mining at Zambrano. Gold mineralisation was confirmed more than 300 metres below the current ore reserve and mineralisation remains open at depth. And this is really the first substantial drilling we've done at M5 North since about 2017, so it's no surprise that we can see that this mineralisation being extended and then we're considering our options there, but most likely Updown Adora Reserve would consider cutting back the northern part of the M5 open pit. So some of the drilling results included 16 metres at 11.2 grams per tonne as well as more typical broad intersections such as 45 metres at 1.9 grams per tonne gold. Diamond drilling at M5 North will continue through 2026. and we look forward to further results from the program to help us better plan for the future mining at Sembrado. But the future looks very good. Our last oil reserve estimate was completed at a much more conservative gold price of US$1,400 an ounce. So recalculating today, we'd expect to use a high gold price and obviously deliver more ounces into reserve. We also have drilling underway at underground... for Toega. We continue to develop a satellite operation for Sambrado, which we continue to develop as a satellite operation for Sambrado. We're currently completing a 13,500 metre infill drilling program, which is infilling the underground resource and we'll have more results over the coming quarters. Grain control drilling also confirmed during the quarter with commenced during the quarter with 6,600 metres completed. This program is expected to be completed in early Q1 2026 with results to follow. In other developments at Toitia, earthworks for the mine services area were completed and the construction of mobile maintenance workshop, office and ancillary infrastructure has commenced. The haul road construction is well advanced and remains on schedule to enable water delivery to the Zambrado Process Plant in early Q3 2026. Two-week open pit mining operations will be owner operated by WAF, similar to Zambrado. Mining equipment continued to arrive on site during the quarter with commissioning activities underway. All mining equipment is expected to be fully operational by the end of this quarter. Pre-stripping of open pit mining The open pit commenced during the quarter with a total of 250,000 BCMs moved to date. Material movement is expected to ramp up to steady state production by the end of Q1 2026. Across other aspects of our business, we continue to invest heavily in social programs including education, health, economic development, including providing scholarships to high school students from the area, upgrading our community health centres and constructing a new primary school and refurbishing an existing school near Kiyaka, which will also be used for community events outside school hours. In relation to discussions with the Burkina Faso government regarding Kiyaka, we've continued to engage constructively with the government on these matters. But at this stage, there are no material updates on that matter. Overall, I'm really happy with our performance and progress throughout Q4, particularly with our round-pump at Kiaka. We're looking forward to releasing our 2026 annual production guidance and outlining our capital management strategy later in Q1 2026. I now hand back to Nathan for the Q&A.

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. We'll just give people 10 seconds or so to ask a question. Okay, your first question comes from Mike Millican at Urals Hartleys. Please go ahead, Mike.

Yeah, morning, guys. Great quarterly. Thanks for all the detail. Just a couple from me. Firstly, talking about, you know, obviously a very strong cash generation at the moment. Debt service, are you going to accelerate some of those payments?

Yes, so that will be a focus throughout this year and get debt down to a manageable level. That's our first focus. We're having active discussions in the office now and amongst our board about capital management, which will take us past 2026. Whether that's buying back shares or paying dividends, that's the discussion that we're having at the moment.

Is that the plan? Certainly a buyback probably makes a lot of sense.

Yeah, look, they both make sense. We just really need to gauge the market and really from – I'm a follower of Berkshire Hathaway and they've always bought shares back. They've never paid a dividend though. But either or, I think it's going to be a good outcome for shareholders if we do either. That's certainly our focus at the moment is to pay down debt and then either buy back shares or pay the dividend.

Yeah, awesome. Just looking at obviously the royalty rates currently in country, obviously pretty high. Is there any sort of changes expected there? I mean, just obviously on a sliding scale and obviously gold prices very high. Has some of your discussions also been centred around royalties?

No, not at this stage. The gold price has risen so quickly. I think we're an average sale price of about $3,500 in Q3 and we've sold an average over $4,000 an ounce in US in Q4. And already we're well over $5,000 an ounce as we speak now. Really the action has been pretty recent and we'll be back in country in a few months' time and definitely raise that with the administration.

Yeah, cool. And finally for me, just on Kealka grid power, how's it all been going? Has it been stable? What's your expectations for calendar year 26 in regards to reliability and what are you factoring in some of your forecasts? Thanks.

I think we can explain more of that later in the quarter when we put our guidance out. We had two or three weeks of stability of stable grid in December, and that allowed us really to ramp up production. We consistently hit 30,000 to 35,000 tonnes a day in production at Keaka, which was really, really good. So clearly the last piece of the puzzle for Keaka is stable power. We were also looking at installing a full HFO power station, which would allow us to have full production, so we'll have more information on that in our annual guidance. We've also increased the diesel capacity on site, so there's another five gensets arrived overnight on site, so they'll be plugged straight in, and that should give us about 30 megawatts of diesel on site. The last week has been pretty unstable with the grid, but there has been work being done by Sonobel, which is the government's energy provider in-country. So we should be back on the grid in the coming days, and then we've also got some other equipment arriving on site which will help stabilise the grid on our side. So, look, it's... It's early days with the grid. Long-term, it's definitely the right option. In the short-term, you know, we've made provisions for additional diesel power and we're making a plan to have full backup with HFO, which is much cheaper to run than diesel. So that's kind of the summary at the moment. But I think the takeaway is that, you know, with full power, Kiaka is capable of producing or of processing... more than 10 million times per annum without any material infrastructure changes. So does that answer your question, Mike?

Yeah, it did. Yeah, thanks very much, Rich. That's really good. And congrats again on a very good quarter. I'll hand it on. Thank you.

Thank you. Your next question comes from Richard Knives at Baron Joey. Please go ahead, Richard. Just unmute yourself there, Richard, if that's all right.

There we go. Hi, Rich. Morning. Thanks for the call. Just wanted to see if I could get you to give us a little bit more detail on the discussions with the government regarding the Kiaka stake, just anything relating to timeframes or whether or not you've made any progress on those discussions with potential co-investments in other projects. Just any more detail you can give on that, thanks.

Yeah, hi. Thanks, Richard. Look, there isn't a lot of detail to give, unfortunately. We responded late last year to Sopamib, and we provided them with a lot of information about Kiaka, our construction costs and economic models. And again, the gold price has moved significantly since then. So, I mean, the discussions have been quite good and cordial. They've made it quite clear that, They believe in, you know, pay market price for an additional share in Kiaka. And we did counter with a proposal saying that, you know, if you have a look at our current quarter, you know, I think we paid in direct taxes and royalties US$90 million in one quarter. So, you know, clearly we're, you know, we're a very good partner to the government and Probably, in our view, that's the best model is that the government already gets a significant proportion of cash flow from mining operations in Burkina, which is getting close to 60% of cash flow at the current gold price. So, and with, you know, obviously the escalating royalty as well. So that's a significant proportion of cash flow now. So really there's not a lot of detail to add. We're currently waiting on a response to our most recent correspondence and we'll opt out of the market as soon as we've got something back. But we've given them an alternative proposal which we showed demonstrates much higher returns on investment given that there are assets the government already owns that aren't generating any cash flow. clearly that would grow the government's share of revenue much more quickly than an incremental investment in Kyaka. But, you know, it's a discussion that we're having with them and, you know, we're doing that in a transparent and polite way. Yep. Yep. Okay. All right.

Thanks. Thank you. There are no further questions at this time, so I'll now hand back to Richard for closing remarks.

Thanks, Nathan. Look, I guess closing remarks, we've got a number of activities underway at the moment, including our resource reserve update. Our new 10-year plan will be coming out in late March. The 10-year plan will include drilling from M5 North and M5 South, as well as extensions at M1 South Underground. So I'd expect that to be, you know, a positive increase on the 10-year plan that we issued last year, which was very close to 10 years at 500,000 ounces per annum, which has been the target of mine for a long time. So, you know, obviously we'll keep the market updated with our discussions with the government around the ownership of Kiaka and also with the stability of the grid as it improves. So thanks very much for dialling in today, and we look forward to keeping the market updated over the coming weeks regarding our activities.