Image source: OscarDominguez

Highlights

  • West African resources is an Australia-based gold mining company with operations focused in West Africa
  • In the latest quarter, the company reported gold production of 55,768oz at an AISC of USD 1,164/oz
  • In FY23, the company expects to deliver gold production of 210-230koz and by FY25, it expects to record production of over 400koz

West African Resources Limited (ASX: WAF) is an ASX-listed gold mining company which is focused on the exploration, acquisition and development of gold projects in West Africa. The mining operations segment of the company includes the Sanbrado Gold Project located in Burkina Faso.

Financial performance

In the first half of the financial year 2023 (1HFY23), the company registered a 4% drop in revenue to AUD 309.6 million and 23% YoY fall in profit after tax to AUD 82.4 million. Meanwhile, the operating cash flow increased by 11% YoY to AUD 109.8 million.

During the reported period, the gold production stood at 113,009oz at an AISC of USD 1,169/oz and unhedged gold sales stood at 108,173oz at an average price of USD 1,929/oz, down by 4% YoY.

The mineral resources and ore reserve during the half stood at 12.6 million ounces and 6.4 million ounces of gold, respectively.

Top 10 shareholders of WAF

The top 10 shareholders of WAF have around 40.31% shareholding in the company, while the top four have around 27.07% shareholding. The top two shareholders of the firm are Van Eck Associates Corporation and Fidelity International with a shareholding of ~10.23% and ~6.38%, respectively.

Recent business update

On 13 December 2023, the company released an update for its Sanbrado Gold Operations. The company reported a maiden underground mineral resource estimate of 2.4Mt at 3.8g/t Au for 289koz for theM5 Sout open-pit at its project. Moreover, the company informed that it has completed an underground scoping study, outlining the potential for an initial five year underground mine life at M5 South with annual gold production of 35koz.

On 24 October 2023, the company released the September quarter update. During the quarter, the company witnessed gold production of 55,768oz at an AISC of USD 1,164/oz and gold sales stood at 50,738oz at average price of USD1,932/oz. The company ended the quarter with a cash balance of AUD 153 million and unsold gold bullion of AUD 16 million.

Outlook

In FY23, the company expects to deliver gold production of 210-230koz at an AISC of not more than USD 1,175/oz. By 2025, the company targets gold production of over 400koz.

The company is committed to advance its Kiaka Gold project with its first gold production anticipated in the second half of 2025. This project is expected to register an average gold production of 219Koz annually at an AISC of USD 1,052/oz for 18.5 years.

Share performance of WAF

WAF shares closed 1.06% up at AUD 0.95 apiece on 19 December 2023. Including today’s gain, WAF’s share price has dropped by 17.40% in the past one year and has increased by 14.46% in the last one month.

The 52-week high of WAF is AUD 1.325, recorded on 20 January 2023 and the 52-week low is AUD 0.658, recorded on 6 October 2023.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 19 December 2023. The reference data in this report has been partly sourced from REFINITIV.