Picture this: A gold miner operating in one of the world’s most politically turbulent regions, cranking out profit margins that would make even Warren Buffett raise an eyebrow. Meet West African Resources (ASX: WAF), a gold mining company’s stock that’s equally thrilling and terrifying. But is this ASX-listed gold play a hidden gem or a value trap dressed up in glitter? Grab your hard hat, we’re going digging.
Recent news
West African Resources Limited reported strong gold production in Q1 2025, producing 50,033 ounces and selling 48,338 ounces at an average price of US$2,832 per ounce.
WAF in a Nutshell: Gold, Grit, and Growth
Let’s cut through the jargon. WAF isn’t mining Bitcoin or dabbling in quantum computing. This Perth-based outfit has one job: extract gold from the earth. Specifically, from Burkina Faso, a landlocked West African nation you’ve probably never Googled.
WAF’s Kiaka project, a mammoth deposit with 4.76 million ounces of gold, is slated to start production in 2025. If all goes to plan, Kiaka could pump out 219,000 ounces annually for nearly two decades.
The Red Flags: Burkina Faso Isn’t a Walk on Bondi Beach
Let’s not kid ourselves. Burkina Faso has had five coups since 2015. Terrorist attacks? Check. Kidnappings? Check. In 2023, an attack on a contractor’s drill rig near Sanbrado forced a temporary shutdown.
But here’s the twist: WAF’s team seems to thrive in chaos. They’ve hit production targets like clockwork, even as the country burns. Why? Burkina Faso’s government depends on gold for 73% of its export income. Translation: Everyone wants those gold trucks rolling, no matter who’s in charge.
Dividend Darling: That maiden dividend? It’s a signal. Management is shifting from “growth at all costs” to “shareholders matter.”
The Bear Case: Everything That Could Go Wrong
Geopolitical Roulette: Another coup or attack could halt operations overnight. Insurance covers bombs, not lost profits.
Gold’s Mood Swings: If central banks stop hoarding gold or inflation fizzles, WAF’s margins get squeezed. Remember 2013? Gold fell a lot.
Kiaka’s Tightrope Walk: The project needs US$430 million to build. Supply chain snarls, labour strikes, or inflation could blow the budget—and the share price.
The Million-Dollar Question: Should You Buy?
WAF isn’t for the faint-hearted. This is a stock that swings a lot and is volatile in the short term. But for investors with titanium nerves and a 5+ year horizon, the rewards could be legendary.
One Last Thing, investing in WAF is like surfing a beach. It's amazing, risky, and I think only you can decide if you want to. So get in on the right one and ride it straight to the bank. It's one of the best gold stock.
(Source - Minesactu, Eiti, bullionvault, MarketIndex)
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