West African Resources Ltd.

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CODE : WAF.AX
ISIN : AU000000WAF6
AUSTRALIA
AU$ 1.00
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Annual Report 2016

West African Resources Limited

(ABN 70 121 539 375)

Annual Financial Statements

for the year ended 30 June 2016

West African Resources Limited (ABN 70 121 539 375)

Directors

CORPORATE INFORMATION

Mark Connelly (Non-Executive Chairman) Richard Hyde (Managing Director)

Simon Storm (Non-Executive Director)

Company Secretary

Simon Storm

PRINCIPAL PLACE OF BUSINESS

14 Southbourne Street

Scarborough WA 6019

Ph: +61 (8) 9481 7344

Fax: +61 (8) 9481 7355

SOLICITORS

Allion Legal Level 2

50 Kings Park Road West Perth WA 6005 Ph: +61 (8) 9216 7100

REGISTERED OFFICE

14 Southbourne Street

Scarborough WA 6019

Ph: +61 (8) 9481 7344

Fax: +61 (8) 9481 7355

SECURITY EXCHANGE AUSTRALIA

Australian Securities Exchange Ltd Level 40, Central Park

152-158 St George's Terrace Perth WA 6000

WEBSITE

www.westafricanresources.com

STOCK EXCHANGE CANADA

TSX Venture Exchange The Exchange Tower 130 King Street West Toronto, ON

M5X 1J2

LOCAL OFFICE

Secteur 27,

Quartier Ouayalghin,

Parcelles 07/08, Lot 22, Section SL, Ouagadougou

Burkina Faso

Ph: +226 50 36 73 84

SHARE REGISTRY AUSTRALIA

Computershare Investor Services Pty Ltd Level 11, 172 St George's Terrace

Perth WA 6000

Ph: 1300 787 272

AUDITORS

HLB Mann Judd

Level 4, 130 Stirling Street

Perth WA 6000

Ph: +61 (8) 9227 7500

Fax: +61 (8) 9227 7533

SHARE REGISTRY CANADA

Computershare

510 Burrard Street, 3rd Floor Vancouver, British Columbia V6C 3B9 Ph: 604 661 9436

West African Resources Limited

Highlights of the year included:

  • Discovery of high-grade gold shoots at Tanlouka Gold Project's M1 South prospect

  • Definitive Feasibility Study commenced to investigate larger-scale processing options for development of the Tanlouka Gold Project

  • Maiden Resource estimates completed for M1 and M3 prospects and upgraded Resource estimate for the M5 deposit

  • More than $35 million capital raised ($21 million post year end) and put to work expanding the Tanlouka Gold Project and fully funding the DFS

  • Clearing the US$5m Macquarie loan post year end

  • Tanlouka Gold Project is now 100% owned and free of debt and third party royalties

Summary

During the year ended 30 June 2016, West African Resources completed 33,069m of auger, reverse circulation (RC) and diamond drilling across the Tanlouka Gold Project (TGP) in Burkina Faso.

The Company's focus shifted from developing the Mankarga 5 (M5) deposit as a heap leach starter project to a larger-scale carbon-in-leach (CIL) scenario following the successful discovery of very high-grade gold at the M1 South and North and M3 prospects.

Maiden resource estimates were completed for M1 and M3 and a resource update for M5, resulting in an Indicated resource of 9.8Mt tonnes at 2.1 g/t Au for 670,000 ounces of gold and an Inferred resource of 10.7Mt tonnes at 2.0 g/t Au for 695,000 ounces of gold for the TGP.

A Definitive Feasibility Study (DFS) for a CIL development scenario at Tanlouka is underway, with progress made on permitting, metallurgical test work and location of key infrastructure. The DFS is expected for completion by the end of 2016.

West African Resources Limited CHAIRMAN'S MESSAGE

Dear Shareholder,

It gives me great pleasure to present the 2016 Annual Report for West African Resources Limited.

The past year has been a very good one for West African - we are in a much stronger position than at the same time in 2015.

Our consistent, high-grade results from the Tanlouka Gold Project in Burkina Faso, most prominently those from M1 South since the discovery of high-grade gold in March, have included 18m at 82.3g/t Au from 98m including 1m at 1,107g/t Au; 12m at 53.11g/t Au, including 1m at 534.45g/t Au; and 4m at 86.96g/t Au from 93m, including 1m at 343.59g/t Au.

We have moved the scope of our plans at Tanlouka from a relatively small, high-margin heap leach starter project to a larger-scale carbon-in-leach project. A Definitive Feasibility Study is in progress and expected to be completed before the end of the 2016 calendar year.

Maiden resource estimates have been completed for the M1 and M3 prospects and we have also updated the resource estimate for M5, with project Indicated mineral resources now 9.8Mt tonnes at 2.1 g/t Au for contained 670,000 ounces of gold and Inferred resources of 10.7Mt tonnes at 2.0 g/t Au for contained 695,000 ounces of gold, and we anticipate further drilling success, particularly at M1 South, would see this expand further.

Our exceptional drilling results also helped garner institutional interest and support, most notably in the $21 million placement completed post year-end, in August 2016. We will use this funding to progress Tanlouka - complete the DFS and post year end have repaid our Macquarie Bank debt facility, ahead of its maturity date.

The raising will also provide funding for further resource and exploration drilling so that we can expand the potential of the Tanlouka Gold Project. Post completion of the placement, West African had $30M cash at bank. We are thankful to our investors, both new and existing, that supported these fundraising efforts.

Another milestone achieved post year-end was the approval received for our Environmental and Social Impact Assessment and Relocation Action Plan. These approvals are an important step and reflect key stakeholder support from community and government agencies in the future development of the project.

I take this opportunity to thank our Management and Staff for their tireless efforts for the Company, particularly Managing Director Richard Hyde, who has been at the helm of West African since the start and has put the Company into an enviable position, with one of the most exciting projects in Burkina Faso. I also thank our Shareholders for your support.

There is a lot of work ahead of West African, as we aim to have a completed DFS and granted mining permit for the project by the end of 2016. However, the next 12 months will be pivotal in our growth and we look forward to the challenges that lie ahead.

Mark Connelly

Non-Executive Chairman