West African Resources (ASX:WAF): 200,000oz gold production in 2024! And 2025 could prove even better!

15 years since West African Resources (ASX:WAF) first listed, it is a 200koz gold miner from one project in Burkina Faso. 2025 will be another year of solid production at its first project, the Sanbrado project, and it will also be the year it brings a second project into production. And also, 2025 looks to be another good year to be in gold. What’s not to like about it? Not much it seems…although investors shouldn’t be 100% confident on its jurisdiction.

West African Resources is a classic rag to riches story

West African Resources was just another small cap explorer 15 years ago, hoping to make it but with the odds stacked against it. Particularly choosing Burkina Faso as a jurisdiction. Even though it had a reputation as a gold mining country, with several producing mines there and now, many Australians would never have heard of it.

Drilling went very well for the first few years, but it hit bad times from 2013-15 when gold prices tanked and many gave up. The company survived and persisted, and never looked back from early 2016 when gold began to recover and it had great results at a brand news prospect at Sanbrado.

By 2020, the company had commenced production at Sanbrado and it has grown to a 200koz/pa-producing mine as had been anticipated. Specifically, in 2024, the company produced 206,622oz and sold 199,550oz at an average price of US$2,391/oz. The company has not given guidance for CY25, but there’s little reason to suspect it’ll derive from the past few years. It is anticipated to have a 15-year mine life and has Resources of 82Mt @ 1.83g/t for 4.9Moz gold. Reserves and Inventory equate to another 27.3Mt @ 3.1g/t for 2.7Moz. The project is 10% owned by the government but WAF owns the rest.

Source: Company

But Sanbrado is not the only reason why there’s cause for optimism.

Bringing a new project into production

West African Resources is hoping to bring its Kaika project, also in Burkina Faso, into production. It hopes that this mine can be a 200koz+ mine too. It may not quite get there in 2025, but plans to in 2026. For 8 years thereafter, the company aspires to produce over 480koz from the two mines, both from existing resources and through new deposits discovered.

The company has a proven track record of growing resources at projects and bringing exploration deposits into operating mines. The company remains led by Richard Hyde who has led the company from Day 1.

Source: Company

Is Burkina Faso a safe jurisdiction?

This may sound like a silly question to ask, given its track record in the country. Even so, it needs to be addressed. Because it can take one new regime or one new law change for investor confidence to be destroyed, and even that of the company. Now, the company has had success to date. The government has a 10% stake in the project and receives significant tax revenues from the project (US$325m since the project began according to the company). WAF has contributed a further US$18.7m to a local mining development fund and US$6.2m in community projects and donations. It has built 3 schools, plus electrified and furnished 5 around Sanbrado, runs a University Scholarship program and has build health centres in the area – just to name a few ESG activities.

The project employs 844 people directly, 90% of whom are Burkinabe (from Burkina Faso) and 50% are from local areas surrounding the project. 20% of the workforce is female. The total workforce, including contractors, is over 2,000.

Yes, yes…you’ve heard all of that. But what about the government? It has been just over two years since the last coup and the junta’s leader Ibrahim Traore announced in October that it would withdraw mining permits from some foreign companies. WAF, and other companies with activities in Burkina Faso, fell on the day it was announced – although it didn’t stop WAF closing 2024 over 60% higher than where it had begun. Moreover, do you know why the junta was able to gain power? Frustrations over the long-term security of gold. The junta has turned away from relationships with the West and is looking to Russia, signing an MoU for a nuclear power plant with a Russian-owned firm.

3 months since those threats, nothing has come of these threats. But who knows what the future holds.

Conclusion

West African Resources looks to have a good 2025 ahead of it, assuming it can bring Kaika into operations. We know the company has the track record and gold is set for another year. Nonetheless, no one can be certain about the situation in Burkina Faso.

What are the Best ASX Stocks to invest in right now?

Check our buy/sell tips