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Gap up, modest volume move of 12% today after update.

Taken a shot at a rough valuation.

Sanbrado Gold Operations (Sanbrado), Burkina Faso were updated for fy21 (WAF reports on the calendar year)

West African anticipates Sanbrado will produce between 250,000 and 280,000 ounces of gold in 2021 with adjusted operating costs of US$530 – 630/oz and all-in sustaining costs (AISC) of US$720 – 800/oz.

However average annual production envisaged as >200,000 ozs p.a over 10 years

• Taking just the average production at Sanbrado at minimum 200kozs 
• Using maximum AISC estimate of US$800/oz
• Which at conversion rate of 1:1.30 AUD = AISC of AUD1,140/oz
• Unhedged producer, so assume current approx AUD spot price of $2,200
• Gives AISC margin to spot = AUD$1,060/oz
• Tax + royalties: 34%: 1,060 x 0.66 = $700/oz profit after tax
• Multiply by avg production: 200koz x $700 = AUD$140,000,000 NPAT p.a
• Divide by diluted shares of 900,000,000 = $0.155 earning per share

Share price close Wednesday: $0.88, or rounded = $0.90

So WAF's average P/E on static assumptions:

Price/Earning (P/E) currently = .90 ÷ .15 = 6

Caveat: there's something in the preso about VAT (value added tax) of 18% which I don't know how to include. Surely it wouldn't be a simple addition to the ordinary tax and royalties? Would make it enormous: 34% + 18%. Why would anyone mine in Burkina Faso with those imposts?

Potentially a growth producer through acquisition and organically, has an exploration budget in 2021 of US$12.5M

Held