West African Resources Confident of Resolution in Burkina Faso
Stock remains suspended in Australia pending update
West African Resources (ASX: WAF) executive chairman Richard Hyde is hoping to reach an amicable deal with the Burkina Faso government over the new Kiaka operation.
In late August, West African received a letter from the Burkinabe government, which contained a request to acquire an additional 35% of the Kiaka mine.
Kiaka is already subject to a 15% government free carry interest.
“We expect to have meetings with them this week, but at this stage, we really have nothing to update the market with,” Hyde told the Mining Forum Americas in Colorado Springs.
“In the absence of any new information, the ASX suspended our stock.
“We were doing really well. We were ramping up. The stock was re-rating.
“But we've been in Burkina for a long time, and we’ll try and get an amicable deal done with the government, so something that honours the investment from West African and our shareholders and something that can be a good outcome for Burkina Faso as well.”
The US$447 million Kiaka mine poured first gold in late June, under budget and ahead of schedule.
The 8.4 million tonne per annum mine is expected to produce an average of 234,000 ounces of gold per annum over 20 years.
“Currently we're operating at about 50-60% capacity,” Hyde said.
“We're waiting to connect to grid power, which should happen by the end of this quarter. That should have us running at full run-rate in Q4 this year.”
Kiaka is West African’s second operating mine in Burkina Faso after Sanbrado, which was built and commissioned during the COVID-19 pandemic.
Production at Sanbrado is set to increase by 15% to an average 243,000ozpa from 2025 to 2034, peaking at 319,000oz in 2030.
Group gold production is set to peak at 569,000oz in 2029.
The company posted a half-year net profit after tax of A$215 million last month with the benefits of Kiaka to start flowing through in the current half.
Hyde said West African was having a strong September quarter.
“Very strong cashflow from selling unhedged gold – probably close to a record quarter for WAF given we've got Kiaka on board,” he said.
“We're drilling like hell at the moment, so we've still got dozens of rigs going at the moment, with 200,000 metres planned for this year and next year, and we’re on track to be a sustainable half a million ounce producer by 2029.”