West African Resources (ASX:WAF) Surges After Record Gold Output: Buy, Hold, or Wait?

West African Resources: A Strong Gold Producer to Watch

West African Resources (ASX: WAF) hit a high of A$3.32 last week after delivering something rare in the mining world: consistency. The company produced a record 300,383 ounces of gold in 2025, marking its fifth straight year of meeting guidance. That kind of reliability explains why the stock has rallied 115% over the past twelve months.

But what really caught the market’s attention was timing. West African Resources is completely unhedged, meaning it captures every dollar of gold’s record-breaking run. In Q4 alone, the company sold gold at an average of US$4,058 per ounce. The question investors are now asking is, “Is the good news already priced in, or is there more upside ahead?”

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Kiaka Ramp-Up Transforms WAF Into a Two-Mine Producer

The standout story of 2025 was the successful ramp-up of the Kiaka mine. In its first full year of production, Kiaka delivered 95,155 ounces. More importantly, Q4 production surged 208% quarter-on-quarter to 62,287 ounces as the mine hit its stride.

This improvement came from two factors working together. Throughput increased 25% while grades jumped 44%, a combination that demonstrates the operation is performing better than initial expectations. For investors, this validates West African Resources’ growth strategy and shows management can execute on integration.

The company now has genuine production diversification. Sanbrado contributed a steady 205,228 ounces alongside Kiaka’s growing output. Looking ahead, West African Resources is targeting peak production of around 570,000 ounces by 2029, representing significant growth from current levels. If Kiaka continues performing at Q4 rates, this target looks achievable.

Unhedged Strategy Captures Record Gold Prices

WAF’s decision to remain completely unhedged is paying off handsomely in the current gold environment. The company realised an average of US$3,525 per ounce for the full-year 2025, with Q4 prices spiking to US$4,058 per ounce as gold hit record highs. Full-year gold sales totalled 280,065 ounces.

This strategy means shareholders get full exposure to gold price movements, which is exactly what you want when prices are climbing. However, it cuts both ways. If gold prices retreat significantly, WAF’s margins would compress faster than those of hedged peers. For now, though, the approach is rewarding patient shareholders.

The company ended the period with approximately AUD $279 million in cash plus AUD $49 million in gold bullion, providing a solid buffer for growth investments and potential market volatility.

The Investor’s Takeaway

Analyst price targets average around A$3.90 to A$4.00, with the most bullish reaching A$5.25. Even at the lower end, this suggests 20-25% potential upside from current levels. The growth trajectory is clear, execution has been consistent, and gold prices remain supportive.

However, investors cannot ignore that 100% of production comes from Burkina Faso. Sovereign risk is real. The government has previously requested an increased stake in mining projects, and political stability in the Sahel region remains uncertain. This concentration risk deserves serious consideration when sizing positions.

In our view, West African Resources is a quality mid-tier producer with proven execution. Risk-tolerant investors already holding can stay the course, but new buyers may want patience after a 115% rally. The fundamentals are strong, but position sizing matters given the jurisdiction risk. This is not a set-and-forget holding for conservative portfolios.