Key Highlights

• Kiaka's production rose 13 per cent on the June quarter, with mill throughput up 15 per cent.

• The average realised price was US$4,240 per ounce, with Sanbrado at US$4,214 and Kiaka at US$4,262.

• High gold prices, with realised prices above US$4,000 per ounce in the period, are an encouraging tailwind for producers, though they also attract regulatory attention in some jurisdictions.

• Group production for the three months to 30 September 2026 was 127,950 ounces, made up of 76,030 ounces from Kiaka and 51,920 ounces from Sanbrado.

What does a record gold quarter reveal when the operation behind it still has a Supply bottleneck? West African Resources' (ASX:WAF) September 2026 quarter production update, released on 8 October 2026, reported group gold production of 127,950 ounces, a record for the company, driven mainly by the Kiaka mine in Burkina Faso. At the same time, the company said explosives supply at Kiaka "remains an operational bottleneck" and that a key permit has not yet been approved. The update is a production summary, not a full financial report.

The central development: record output with a caveat

Group production for the three months to 30 September 2026 was 127,950 ounces, made up of 76,030 ounces from Kiaka and 51,920 ounces from Sanbrado. Year-to-date production was 360,857 ounces, comprising 209,305 ounces from Kiaka and 151,552 ounces from Sanbrado. Kiaka's production rose 13 per cent on the June quarter, with mill throughput up 15 per cent.

The company maintained 2026 production guidance of 430,000 to 490,000 ounces and said it is on track. Year-to-date output of 360,857 ounces is about 84 per cent of the lower end of guidance after three quarters.

The caveat is Kiaka's explosives. The company says supply improved after a second supplier was engaged, but its explosives Manufacturing and storage Facility permit has not yet been approved by the Burkina Faso government. Without that permit, the mine depends on outside suppliers, which constrains how fast it can mine and ramp up. Investors should treat the improved supply from a second supplier as a mitigation, not a resolution.

Business model and Revenue drivers

West African Resources is a gold producer with two operating mines in Burkina Faso. Revenue depends on ounces sold and the gold price realised, and the company describes itself as unhedged, meaning it has no forward sales contracts that fix a price. That gives full exposure to gold price moves, both up and down.

Sales in the September quarter were 135,245 ounces, higher than production, with Sanbrado selling 61,753 ounces and Kiaka 73,492 ounces. The average realised price was US$4,240 per ounce, with Sanbrado at US$4,214 and Kiaka at US$4,262. For the nine months, sales were 350,127 ounces at an average of US$4,550 per ounce. Revenue per ounce in the December quarter will depend on the gold market.

Sales exceeding production in the quarter means some previously produced gold was sold, which can reflect timing.

Costs, cash and debt: what is missing

These are material to assessing profitability and Balance Sheet strength, particularly for a company that has invested heavily in Kiaka. The company said the full quarterly activities report will follow "in the coming weeks", and that is where investors should look for financial details. Until then, no view on margins or Leverage can be formed from this source.

Sanbrado: M5 South underground

At Sanbrado, Mining has commenced at the M5 South underground deposit after the Burkina Faso government approved an update to the life-of-mine plan. Stoping, the extraction of ore from underground, is scheduled to start in early the second half of 2027, and the company expects minimal impact on 2027 production. The open pit at M5 North continues, with the update noting higher mined ounces on the previous quarter.

Sector and competitive position

Gold producers in West Africa operate in a region where permitting, security and government relationships can affect operations. The September update provides a concrete example, with the Kiaka explosives permit still awaiting approval.

High gold prices, with realised prices above US$4,000 per ounce in the period, are an encouraging tailwind for producers, though they also attract regulatory attention in some jurisdictions.

Risks and developments to monitor

Principal risks include gold price Volatility given no hedging, political and Regulatory Risk in Burkina Faso, the unresolved explosives permit at Kiaka, operational reliability as Kiaka ramps up, cost Inflation and the timing of underground development at Sanbrado. A permit decision, tax change or supply interruption could affect output quickly.

Items to watch are the full September quarterly activities report with costs, cash and debt, the Kiaka explosives facility permit, fourth-quarter production relative to guidance of 430,000 to 490,000 ounces, and progress on M5 South toward stoping in the second half of 2027.