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 Executive Chairman and CEO, Richard Hyde. Thank you, Richard.

Thanks, Nathan. Good morning and thanks for joining us for West African Resources March 2026 Call to Call. It was a productive quarter for our gold operations at Sanbrado and Kiaka in Burkina Faso, but before I get into discussing our performance, I want to address the ownership structure changes at Kiaka in regard to the Burkina Faso government. This has been under discussion for a while now, and as we've announced this week, the Burkina government plans to acquire an additional 25% equity interest in our subsidiary, Kiaka SA, who is the operator of the Kiaka gold mine. This will take the government's interest at Kiaka to 40%, as it has an existing 15% free carriage stake already. This additional capital share in Kiaka SA has been valued by the government at 70 billion CFA francs, which roughly equates to 175 million Australian dollars. There has been no discussion with the government regarding the ownership of Sambrado or Tuiga, and Tuiga's obviously on track to start producing later this year, and they were not referred to in the decree that was published in regards to Kiaka. We are working with the government to finalise the terms of the acquisition for Kiaka, and we hope to have that completed by the end of this calendar year. At this stage, we plan to distribute any cash proceeds from the sailors the equity sale of Kiaka SA to our shareholders by way of special dividend and we'll keep you updated with any developments regarding this. Regarding our results for Q1, we achieved gold production of 107,728 ounces across both Zambrano and Kiaka for the quarter at an oil and saponin cost of US$1,921 per ounce. We remain on track to achieve our annual production guidance of 430,000 to 490,000 ounces of gold, with all outstanding costs below US$1,900 an ounce. Gold sales were steady compared to the previous quarter, with 104,000 to 145,000 ounces sold in the quarter, and we achieved this at a price of US$4,945 per ounce. This is a strong result. given our unheaged exposure to the high gold prices. And we generated $440 million Australian dollars from our operating activities in Q1. This took our cash balance to a record $847 million, with $213 million in unsold gold bullion at the end of the quarter, based on current prices. Looking at each operation in more detail, Samburado continued a steady performance in Q1, with $42,000 and 24 ounces of gold production, which is in line with the planned 2026 annual production profile. Sambrado will see high contribution of mine ounces from the M1 South underground over the remaining three quarters of 2026 as more soaping areas become available. We achieved Sambrado's production at a site-sustaining cost of US$2,034 per ounce and sold 42,428 ounces. at an average realised price of US$4,978 per ounce. Unsold gold bullion at Zambrada at the end of the quarter totalled 11,794 ounces, laid at about US$54 million. Akiaka production continues to ramp up in the quarter, delivering 97,906 ounces from open pit mining operations, and we produced 65,704 ounces from processing operations. And this represents an 18% increase and 6% increase respectively over the previous quarter in mined and processed ounces. Kiaka delivered gold production at a site-sustaining cost of $1,779 per ounce. We sold 61,717 ounces from Kiaka at an average realized price of $4,922 an ounce. with unsold bullion just over 20,000 ounces held at the end of the quarter, which is valued at about US$92 million at the current gold price. While this production performance was impressive, we also delivered on several other fronts during the quarter. We released our updated Resources, Reserves and Ten-Year Production Plan in the quarter, which demonstrated further increases to Kiarka and Sanbrados' production plan on the back of outstanding results from our 2025 drilling programs. We're now looking at delivering average gold production of 533,000 ounces of gold per year over a 10-year period, with gold production expected to peak in 2030 just short of 600,000 ounces. Zambrano's mine plan has been extended out to 2036, with its production expected to peak in 2030 at 317,000 ounces. At Kiaka, we've also modelled higher production throughputs based on exceptional performance from a processed plant since we started operations. Our unhedged mineral resources now stand at 13.6 million ounces of gold, while all reserves total 7 million ounces. We see potential to improve annual production further through ongoing drilling programs, and we plan to drill more than 100,000 metres annually targeting extensions at M5 South Underground and beneath the M5 North open pit. and also targeting underground potential at Toiga. The 10-year plan highlighted just what a strong and sustainable future our company has and our potential to continue generating value for stakeholders and host communities over the next decade and beyond. Speaking of the future, Toiga, our development project, continues to progress well, with open-pit priest stripping commencing later in the quarter. and a total of 621,000 bcm of material was stripped. Surface grade control drilling was completed during the quarter in preparation for first ore mining which is on track for this quarter Q2 and delivery of that ore up to the Sanbrado Process Plant is expected to start in early Q3. In terms of exploration we released impressive results from our M5 South underground drilling program, where high-grade gold mineralisation was extended by 400 metres below the current mineral resource. Our resource conversion drilling program is also progressing on schedule. We also reported good results from our drilling program to M5 North, which returned wide intersections and delivered consistent mineralisation below the current open pit or reserve, and M1 North, where results support potential for a cutback. In addition, a 13,500-metre program targeting the Toowiga underground resource is ongoing. We plan to incorporate results from Sanbrado into an updated resource reserve and 10-year production plan into the coming quarter. With that overview of operational activities, I'll now hand over to Padraig to discuss the financial results. Thanks, Padraig.

Thank you, Richard. So the WAF, as Richard mentioned, the strong gold sales, the WAF group generated Australian $742 million of gold sales revenue combined in the quarter from an average gold price of US$4,945 per ounce. And we generate Australian $440 million of operating cash flow in Q1 and ended the year with a record high cash balance of Australian $847 million. Looking at the notional net cash, which is calculated as cash plus bullion minus debt, we more than doubled the notional net cash in the quarter and ended the quarter with U.S. $450 million notional net cash position. Our capital investing activities in Q4 used $90 million cash, which was comprised of $38 million investment into Sembrado, $23 million into Tuiga, and $29 million at Quiaca. Financing activities in the quarter used $45 million cash in Q4, mainly comprised of $28 million of loan payments and $11 million of interest payments. I now will hand back to Richard for his comments.

Thanks, Andrew.

Thanks, Richard.

So as you can see, it's been another strong quarter for West African on the production front. In terms of our ESG performance, We're also tracking well with environmental activities such as seedling production and food donations given back to our communities, and we continue to invest strongly in areas such as education, health, economic development. We're working with our contractors to enhance these programs, leading to more support for local education facilities. We also support local schools with donations of bicycles and school supplies during the quarter. Our community relations team coordinated education assessment sessions on the risks associated with artisanal and small-scale mining, school absenteeism, and we handed over storage warehouses to four agricultural cooperatives run by local residents who have received help training to help support their local communities. With our operations at Sanbrado and Kiyaka performing well, we are pleased to be a positive contributor to the communities in which we operate. as well as Burkina Faso more widely. I'd like to thank our employees and contractors for their efforts as well, as we wouldn't be able to achieve these results without them. Thanks again for your interest in West African Resources and for joining the call today. I'll now hand over to Nathan to see if we have any questions.

Thank you. Just a reminder, if you'd like to ask a question directly to the company, please use the raise hand function within Zoom. Your first question comes from Paul Howard at Tenacord. Please go ahead, Paul.

Yeah, good morning, guys. Thanks for the call. A couple of questions from my end, if you don't mind. How does the Burkina Faso government intend to pay that $175 million? You mentioned any proceeds, cash proceeds perhaps being redistributed as a special divvy, but is the government intending to actually hand you physical cash

Yes, look, in our extensive discussions with them, we've discussed the cash payment. You know, the government's probably seeing record high revenue from the current gold price from the operations that are operating in country. And given the return that the government will get on this investment, it's something that's probably commercially attractive to banks as well. So we're expecting to be paid in cash.

Right. A couple more, perhaps more up Padraig's avenue is, what's the debt repayment schedule? I was a little more debt expected to pay this quarter, but yeah, I should look at that going forward. Padraig?

Yeah, I can't remember exactly the debt repayment schedule, but it's over three years remaining, I think, and there's a large bullet at the end, so about $100 million bullet. Yeah. Yeah, in 2028, there's a $100 million bullet, so we have fairly low debt repayments until we hit 2028.

Yeah, that's the bullet I don't have, which makes sense. Awesome. While I've got you then... No tax payments this quarter? And, indeed, the subsidiary payment, that's normally 3.9 in your cash flow report?

Yeah, we paid the Q1 tax installment for Sombrato. early. We paid it before the end of the year in 2025. So that's why it doesn't show up in Q1 2024. So some product installment was paid. Jacket didn't pay tax installments in 2025 because this is first year of operation. So we have tax settlements coming up at the end of April where we'll log our tax returns and then have to pay the taxes due on those years on the 2025 year.

Right. I'll let you know that that line where in the cash flow we have 3.9% subsidiary minority interest profit distribution?

Yeah, so subsidiary minority distributions have been calculated now. We are looking at around Aussie $68 million for both combined Sombrato and Chiaca to be paid sometime in Q2. And on the income tax, they've been calculated as well. And we have about Australian, about $120 million that we'll be paying to clear the 2025 taxes payable balances.

Got you. So that's $120 Aussie, right? Yeah. And then that $68 you've got to pay in April. Is that relating to March quarter?

No, this is the priority dividend. So the priority dividend is paid annually. It relates to 2025 earnings, but it will be paid not in April, but sometime over Q2. Perfect. Thanks so much for that, guys.

You're welcome.

Thank you. Your next question comes from Richard Knight at Aaron Joey. Please go ahead, Richard.

Hi, James. Thanks for the call. Just harping on the $175 million again, just wondering if you have any insight as to how the government came up with that number, and in your opinion, is that in the bounds of the new mining code in Burkina? And I suppose where I'm going with this is, you know, Where do you see the risk then that this pops up again for Sanbrado down the line?

Thanks, Richard. So, look, the valuation mechanism used in the 2024 mining code, isn't it? It's not an MPV-based calculation. The government bases that off costs required to sustain operations, so effectively a sustaining capital estimate for the life of mines. So it's unusual but that's within the 2024 mining code. It still results in a substantial number, it's not zero. Now in our discussions with Sotheby's, which is the government representative, we've addressed our other operations and they're not being, for our understanding, they're not being targeted to have the same treatment and we'll also be addressing that or we'll be looking to address that in our documentation process regarding the 25% equity interest for the government. So we'd like to see no further changes to our other operations and ensure that other fiscal financial terms for our other operations are On a driven, yeah. Is there a way you can get surety around that? Yeah, we're attempting to do that. We'll address that in our documentation process.

Okay. Okay, fine. And then in that same announcement, I think you mentioned in your comment that you're still looking or you held discussions around further collaboration on EMI development assets, is that something that we could potentially see more detail on this year?

Yeah, I think so. It'll take a little while because we need to get our people involved and we need to do some technical reviews of what the projects that have been discussed. But there's I think there's a good chance that we'll advance that this year and there's some assets that need a lot of drilling. I think you see that with a lot of older projects that are under-drilled and there's definitely good potential on some of them and they're in reasonable locations in Burkina. So that's a process that we'll have to go through technically now and assess them and then form a view on what we think we can move forward with.

Okay. Brilliant. Thanks very much.

Thank you. Your next question comes from Mike Millican at Euros Hartleys. Please go ahead, Mike.

Yeah, thanks for that, guys. Excellent cash generation for the quarter, Richard. Congrats. I'll just make a very quick one on the pay consideration. Should we expect the date to be the date of the decree or when you receive the money? How should we think about that?

No, under the law, the benefits aren't received until the shares are paid up. So we expect that that will be later this year or when we receive payment. Yeah, gotcha.

So the effective change of ownership only once the funds are received. Correct. Yeah. Obviously, a very quick question on the diesel in-country. Obviously, it's regulated. How's your supplies, stockpiles? Any comments around that?

Look, I was just in country, so we've typically got across both sites something like 70 or 80 trucks in circulation, either heading to site or heading from site to port. So fuel comes from Benin and Togo, which is in the southeast of Burkina. We typically keep at least two weeks of storage in tanks on site and then When I was there, there were another week or so of trucks sitting at the mine gate. And then we've also got trucks in circulation. So it's something that we've been aware of for a while. We were addressing this before the current crisis in the Middle East. We've definitely seen a drop-off in availability, but I think it's something that we've planned for and that we're dealing with.

Yeah, cool. And also your stockpile is pretty high at both operations, roughly 72,000 ounces at each, which is pretty impressive. Dividend policy, Richard, have you guys thought of one? I mean, obviously there's a lot of cash generation, specialty becoming. Is there a bit of a thought on a bit of a policy to publish?

Look, as far as policy goes at this stage, you know, we're obviously still... Kiaf is still a new mine, so it's generating a lot of cash, but... We've got a fairly big few months in finalising the 2025 tax payments and dividends to the government and then we'll be looking to bring as much cash up after that. We haven't set a policy at this point. We'll pay, I think what we've said is a substantial dividend. So I think it's got to be a meaningful amount. Patrick, would you like to elaborate further?

Yeah, I mean, we need to say meaningful amount. We're talking the hundreds of millions of dollars already. We just haven't decided on the amount yet. We'll do our cash projections, and we need to forward project all of the government dividends and taxes and then working capital needs for expansions, et cetera. We still have the two-week stripping program going on, et cetera. So we will... It's a bit early for us to have a dividend policy based on its percentage of cash flow or profit at this stage.

Yeah, gotcha. And maybe, you know, buyback versus pay dividends. Is it, again, given that you're just contemplating either, you know, both or either either? Yep. Gotcha.

Yeah, correct. So I think we'd like to have the option to buy back our shares if we see weakness. And we'd like to be a strong dividend-paying company as well. But having all those different tools in the shed would be pretty handy.

And just finally for me, Richard, you mentioned something. You're talking another update for Sam Bright in regards to resource growth. Is that what I heard?

Well, there will be, yeah. We've got a lot of infield drilling going on at M1 South, so... Well, it might not move the needle on ounces overall and certainly improve the category. It's not as meaningful, I think, as our last update, which was during Q1.

Yeah. So mostly focused, obviously, M5 South underground, some of those extensions there, gotcha? Yeah. Excellent. That's all I've got. Thanks very much.

Thanks, Mike.

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

Thanks, Nathan. And thanks to the WAF team for another sensational quarter of production. I think, you know, it's quite impressive. I could probably say we're just ordinary people achieving extraordinary things, and I'm very proud of the team. And we look forward to another strong quarter for Q2. We've had a great start to Q2 production already. and then delivering on our plans for the rest of the year. So thank you very much for dialling in and we look forward to keeping the market updated with our progress.