Report and accounts for the year ended 31 March 2013 and board changes

18 July 2013

West African Minerals Corporation (LSE: WAFM), the mining and exploration group with a portfolio of assets in West Africa, presents its final audited results for the year ended 31 March 2013 and announces the appointment of Brad Mills as President, following the resignation of Stephen Dattels as Executive Co-Chairman and CEO of the Company on 17 July 2013 to focus on outside business interests and to spend more time with his family. Mr Mellon remains as Non-Executive Chairman following Mr Dattels’ resignation. The Board would like to thank Mr Dattels for his valuable contribution to the success of the Company since its listing in 2007.

The 2013 Audited Annual Report and Accounts will be posted to shareholders shortly and will be available from the Company's website

Operational Highlights

  • Acquisition of remaining 5% minority interest in CMC Cameroon which was completed on 21 May 2012 now provides full ownership and operational control of the Company’s major asset in Cameroon
  • Phase II drilling uncovers hematite enrichment predominantly from surface at South Djadom
  • Infill grid drilling over a 3.6km x 1.2km area currently underway – assay results imminent
  • Maiden resource expected before the end of the calendar year
  • Potential for a second resource at Binga near Kribi port by year end
  • Total Assets increased by 12.5% to £29.7 million (2012: £26.4 million)
  • Following placements, cash still remains over £9.4 million (2012: £10.6 million)
  • Total equity increased by 14.7% to £29.6 million (2012: £25.8 million)
  • First analyst site visit produces initial research coverage
  • Operational expenses rigorously controlled at all levels
  • Basic and diluted loss per share fell by 61.6% to £0.018 (2012: £0.028)


West African Minerals Corporation

Anton Mauve

Managing Director


Donna Yoshimatsu

Investor Relations and Corporate Secretary


+44 (0) 1624 639396



+1 (647) 777-4432

Beaumont Cornish Limited (Nominated Adviser)

Roland Cornish

Michael Cornish


+44 (0)20 7628 3396

Investec Bank PLC (Broker)

Neil Elliot


+44 (0)20 7597 5970

GTH Communications

Toby Hall

Suzanne Johnson Walsh

+44 (0) 20 7822 7493/7492

Chairman’s statement

Dear Shareholders,

Significant strides were made during the year towards WAFM’s 2013 target to deliver the Company’s maiden iron ore resource estimate in autumn 2013. The 20,000 metre Phase 2 scout drilling programme that was launched last August commenced at the Binga permit in proximity to the Kribi multi-user deep seaport and advanced eastward along the prolific iron corridor to the major geophysical anomalies at Djadom. The success of this programme guided by a 5,000 line km fixed wing airborne gravity and Phase I 27,000 line km aeromagnetic survey has brought the Company to the threshold of discovery.

March 2013 year end results

During the financial period under review, the Company’s Shareholder Equity grew to £29.6 million (2012: £25.8 million). On 30 July 2012, the acquisition of the remaining 5% minority interest in Compagnie Minière du Cameroun SA (“CMC Cameroon”) was successfully completed, making CMC Cameroon an indirectly wholly-owned subsidiary of WAFM. The acquisition was settled by way of issue of 18.5 million new ordinary shares in the Company to the vendors with a market valuation of £10.1 million.

Cash stood at £9.4 million (2012: £10.6 million) with Expenses of £3.1 million (2012: 3.6 million).

Total number of shares in issue increased to 288.0 million (2012: 258.9 million) resulting in an increase in Share Premium to £59.6 million (2012: £43.8 million). Total shares issued during the year comprised of 10.2 million shares which raised £5.6 million in placing proceeds, 18.5 million shares issued on acquisition of CMC Cameroon minority interest and 0.33 million shares issued pursuant to an exercise of share options.

The Company issued share options and warrants totalling 6.6 million and 1.4 million respectively, to certain directors, consultants and employees of the Group.

Total costs capitalised to Deferred Mine Exploration costs increased to £7.0 million (2012: £2.5 million). These costs are directly attributable to exploratory activities in Cameroon and Sierra Leone and were capitalised in accordance with the Group’s policy and IFRS. An impairment review has been performed during the year and management considered that the recoverable amount of these assets exceeded the carrying value, therefore no impairment was recognized.

Total operating loss during the year was £3.1 million (2012: £3.6 million). The directors have instituted a cost control programme which will result in further future savings.

Phase II Drilling – identifying the potential

The focus of the company’s exploration activities over the last year has been the 20,000 metre Phase II scout drilling programme to test the major geophysical targets on the Binga licence in proximity to the deep water port of Kribi, and the large-scale targets on the Lélé and Djadom leases to the east. This bifurcated approach was designed to leverage the Company’s success on two levels: a) to capture the near term potential at the coastal concessions and identify a resource that can be brought into production in relatively short time; and b) advancing the large scale potential of Lélé and Djadom located adjacent to the other major DSO deposits in the region as the heavy rail infrastructure is developed.

Also as part of the Phase II programme, a gravity gradiometry survey was conducted in February 2013 over the Djadom South, Djadom North, and Lele concessions that successfully identified high-density anomalies co-incident with the previously delineated aeromagnetic anomalies. These magnetic anomalies were interpreted as regionally extensive Banded Iron Formation (BIF) displaying similar geophysical signatures and strong continuity with the adjacent Mbarga resource.

i)        Binga - evidence of near-surface enrichment

At the Binga licence over 5,500 metres of scout drilling in 114 reverse circulation (RC) holes defined three mineralized clusters of enrichment, located 40km to 100km east of the Kribi multi-user deep seaport now under construction.  Enriched BIF was recorded in the western sector of Binga on surface and in road-cuttings from Sinohydro’s roadwork connected with the Memve’ele hydroelectric power project being built on WAFM’s licenses between Binga and Minko. At least two separate enriched BIF structures within a larger package of meta-sedimentary country rock with strike extents of up to 45 kilometres were discovered.

Channel samples of high-grade float material have confirmed Binga as highly weathered with good potential for enriched hematite, particularly where road cuttings are perpendicular to strike, demonstrating the potential for channel-fill development. There is now clear evidence of hematite enrichment in near-surface pisolitic fill deposits and within areas of structural interference.

Given the extensive strike length of the geophysical anomalies, the enrichment encountered in the holes drilled to date, and the near proximity to planned deep water port facilities, these early indications considerably enhance the economic significance of these deposits.

From Binga, the Phase II drilling programme moved east to WAFM’s large-scale Djadom licence adjacent to the Mbarga deposit at Mbalam.

ii)       South Djadom - unlocking large-scale potential

Significant momentum has been gained from the advanced understanding of detailed geology through the correlation of magnetic and gravity anomalies with BIF over a 25km strike length at South Djadom.

In March 2013, the first set of results emerged from 42 vertical RC holes drilled to test the northern-most portion of a 6km by 4km area. The presence of BIF, enriched BIF and hematite was confirmed in 11 drill holes over an area spanning 3km by 2km in the test area. Of these, 8 holes intersected zones of enrichment predominantly from surface ranging from 8 to 23 metres in length, and 5 holes intersected near surface hematite mineralisation returning composite grades in excess of 50% over greater than 5 metres. Hematite mineralization and enriched BIF are now demonstrated to occur over widespread areas, correlating well to the magnetic and gravity modelling.

Converting the potential through infill drilling

The widespread nature of near surface hematite mineralisation and enriched BIF provided the basis for an extensive infill grid drilling program of approximately 300 holes starting at the northwest portion of the anomalous area spanning 3.6 km x 1.2 km, with the objective to establish continuity of the mineralisation towards a maiden resource. 27 vertical RC holes from the grid (Grid 1) have been reported on to date. 11 of these intersected mineralisation (BIF, enriched BIF or a hematite-rich oxide cap) with 6 containing significant mineralisation defined as >30% Fe over >5m thickness.

Reverse Circulation (RC) drilling has been completed on Grid 1 and the remaining assay results are imminent. RC drilling on a second grid (Grid 2) and Diamond Drilling (DD), for structural definition and RC drilling verification, is ongoing with two RC rigs and three DD rigs on site. The objective of the infill drilling is the delivery of a maiden inferred resource and the development of a thorough understanding of the geological controls on mineralisation in this district.

Future Developments

As WAFM prepares to deliver the first of its mineral resource estimates later this year, the south Cameroon iron corridor has the potential for significant transformation through a number of potential developments including the advancement in infrastructure planning and corporate strategic activities with the potential to attract funding on a global scale. A number of large Asian entities are represented in the ‘National Railway Master Plan Study in Cameroon’ with a view to developing the 516 km heavy duty rail line in Cameroon, while a consortium of Chinese banks and other parties are reportedly considering a role in the funding. Merger and acquisition activity is at its highest among WAFM’s peers and it is likely that the outcome will be positive to generating momentum and interest in the country.

Cameroon is endowed with natural deep water and calm conditions ideal for the construction of bulk iron ore port facilities. With few places on the continent suitable to accommodate bulk storage and strong government support for infrastructure development, Cameroon is ideally positioned to accommodate shipments to China and Europe. WAFM has largely completed its Phase II infrastructure study for future production from the near-port and hinterland leases, looking at iron-ore terminal and port design, heavy gauge rail and road haul, mining and processing, and ore handling for potential future production.


The Company expects to complete the Phase II RC drilling programme at South Djadom in August covering a significant portion of the 25km long co-incident gravity and magnetic anomaly. This will generate the first major resource on the main grid in September, which is expected to be supplemented by an additional resource on the second grid at South Djadom later in October.

The RC drill rigs are being mobilized to North Djadom with Phase II drilling to commence there in mid-July and, following verification of the magnetic targets, will move westward to the Lele concession situated between the Mbalam and the Nkout deposits.

An infill drilling programme at Binga is expected to commence in August with the objective of targeting a mineral resource estimate by the end of the calendar year. Following the success of a ground-based geophysical survey, over Grid 1, in delineating the BIF units, further such surveys have been planned over the Binga infill areas. In addition, access roads have been developed on Djadom North for the verification drilling of large-scale targets identified from the geophysics here.


Iron ore prices fell (for 62% fines CFR China) in February, reaching a low of US$110.40/t in late May and recovering to a current range of US$110-120/t. The stabilisation in prices, coupled with the recovery in freight rates (which remain at extremely depressed levels) has been interpreted as a positive sign by many market commentators.

Over the long term, the Company’s bullish outlook for iron ore prices is unchanged based on:-

-      the high average marginal cost of Chinese iron ore production (estimated at US$110-120 per tonne);

-      support from Chinese Government stimulus spending and structural factors such as the urbanization of China’s population;

-      supply growth continuing to fall significantly short of market expectations due to capital and operating cost inflation deferring new projects and mine expansions; and

-      strong demand growth anticipated from the United States and emerging markets including Brazil, India, Russia, CIS countries, southeast Asia and the Middle East in the mid to long term.

WAFM is transitioning into a significant iron ore developer and is in a favourable position to deliver a series of firsts in the months ahead starting with the establishment of a maiden mineral resource at the South Djadom permit. Considerable discovery potential exists which geophysics and modelling is now more accurately targeting.

Finally I, and the board as a whole, would like to sincerely thank Stephen Dattels for his invaluable contribution to the success of the Company since its listing in 2007 following his decision to stand down as Executive Co-Chairman and CEO of the Company on 17 July 2013 to focus on outside business interests and to spend more time with his family. Following his departure, I will now become sole Non-Executive Chairman joined by Brad Mills, who will now move from Executive Vice-Chairman to become President.

Jim Mellon

Non-Executive Chairman

18 July 2013


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