West African Resources (ASX: WAF) Plunges 16% on Burkina Faso Stake Talks: Buy the Dip or Exit Now?

West African Resources (ASX: WAF) plunged 16% on Wednesday, closing at A$2.56 after returning from a multi-month trading suspension on the ASX. The suspension stemmed from ongoing negotiations with the Burkina Faso government, which has requested an additional 35% stake in the company’s flagship Kiaka gold mine. If approved, this would lift the state’s ownership from 15% to 50%, fundamentally altering the project’s economics for shareholders.
For investors weighing whether to buy the dip or cut their losses, the situation highlights a critical tension: strong operational performance on one hand and rising sovereign risk on the other.

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

Check our buy/sell tips

The Good News: WAF Is Firing on All Cylinders

Here’s what makes this situation so frustrating: the company is actually delivering exceptional results. In the first half of 2025, revenue surged 39% to A$477.3 million, while profit after tax skyrocketed 133% to A$214.6 million. These aren’t the numbers of a struggling miner.
The Kiaka mine, located just 45 kilometres south of WAF’s established Sanbrado operation, poured its first gold in mid-2025, ahead of schedule and under budget. That’s rare in mining. With expected production of around 234,000 ounces annually over a 20-year mine life, Kiaka is central to WAF’s growth story. Group production guidance of 290,000 to 360,000 ounces for 2025 remains firmly on track. Looking ahead, WAF is targeting peak annual production of around 569,000 ounces by 2029 as Sanbrado, Kiaka, and Toega ramp up together. If achieved, that would position WAF among the larger ASX-listed African gold producers.
Even after today’s brutal selloff, the stock sits near the upper end of its 52-week range (A$1.415–A$3.09) and remains roughly 100% higher than this time last year. The fundamentals haven’t changed, but investor perception of risk certainly has.

Resource Nationalism Is Heating Up

Burkina Faso’s aggressive push for a larger Kiaka stake isn’t an isolated event. It’s part of a broader wave of resource nationalism sweeping across West Africa. Under Captain Ibrahim Traoré, who seized power in a 2022 coup, the government has made securing greater control over foreign-owned mining operations a top priority. Similar moves are playing out in neighbouring Mali, where foreign miners face mounting pressure to hand over larger stakes.

The country’s updated 2024 mining code gives the state significant leverage:

– Mandatory 15% free-carried government equity in all projects
– Provision for additional state acquisition of “at least 30%” in strategic mines
– Priority dividend payments flow directly to the government

WAF has responded with an alternative proposal aimed at boosting government revenue through developing new and previously closed mining projects, rather than simply diluting existing shareholders. CEO Richard Hyde is hosting an investor webinar today (November 26) to provide clarity on negotiations.

The Investor’s Takeaway

Consider buying if: You’re comfortable with frontier-market risk, have a long-term horizon, and believe gold prices will remain elevated. Some analysts see upside towards A$3–4 if WAF secures favourable terms. The unhedged gold exposure offers significant leverage to rising prices.

Consider selling if: You need capital security or can’t stomach another trading halt. With approximately A$426 million in debt and 100% exposure to a politically volatile jurisdiction, this isn’t a “sleep well at night” stock.

The bottom line: WAF is a high-conviction play for risk-tolerant investors. If negotiations succeed, expect a sharp re-rating. If Burkina Faso plays hardball, shareholders may end up with a much smaller slice of what was once a very attractive pie. Know your risk appetite before making a move.