Burkina Faso’s Increased Equity Stake Tests WAF’s Profit Margins
West African Resources aligns with Burkina Faso's 2024 Mining Code, increasing the government's equity stake in its projects while maintaining its 2025 gold production targets.
- Burkina Faso Government's free-carried equity rises from 10% to 15%
- Change affects Sanbrado, Kiaka, and Toega mining projects
- 2025 gold production guidance remains at 190,000–210,000 ounces
- All-in sustaining costs (AISC) expected below US$1,350 per ounce
- Kiaka project construction on schedule and budget, first gold expected early Q3 2025
Government Equity Increase
West African Resources Limited (WAF) has announced a strategic alignment with the Government of Burkina Faso’s updated mining regulations, increasing the State’s free-carried equity interest in its key gold mining projects from 10% to 15%. This adjustment, mandated by the 2024 Burkina Faso Mining Code, affects the Sanbrado, Kiaka, and Toega operations, reinforcing the government’s stake in the country’s mineral wealth.
Maintaining Production and Cost Guidance
Despite the increased government ownership, WAF has confirmed that its 2025 gold production guidance remains unchanged, targeting between 190,000 and 210,000 ounces. The company also expects to keep its all-in sustaining costs (AISC) below US$1,350 per ounce, a figure that underscores operational efficiency amid evolving regulatory landscapes.
Progress on the Kiaka Project
Construction at the Kiaka project continues to progress on schedule and within budget, with first gold production anticipated in early Q3 2025. This milestone will elevate WAF’s annual gold output to over 420,000 ounces, marking a significant step in the company’s growth trajectory and its contribution to Burkina Faso’s mining sector.
Industry Collaboration and Regulatory Compliance
WAF’s decision follows extensive consultations with the Ministry of Mines, the Burkina Faso Chamber of Mines, and other key stakeholders, reflecting a collaborative approach to regulatory compliance. By embracing the 2024 Mining Code’s provisions, WAF positions itself as a responsible operator aligned with national interests, potentially smoothing future interactions with government bodies.
Looking Ahead
While the immediate operational outlook remains stable, the increased government equity stake introduces new dynamics in profit sharing and project governance. Investors will be watching closely for further disclosures on how this change impacts financial returns and long-term project economics.
Bottom Line?
WAF’s alignment with Burkina Faso’s mining code signals regulatory harmony but raises questions on future financial impacts.
Questions in the middle?
- How will the increased government equity affect WAF’s profit distribution and cash flow?
- Are there any anticipated operational or governance changes linked to the higher state ownership?
- What implications does the 2024 Mining Code have for other mining companies operating in Burkina Faso?
