West African Resources shares plunge after junta leader targets miners

West African Resources says it is monitoring the situation after the leader of Burkina Faso’s military junta flagged a gold mining crackdown.

Burkina Faso's self-proclaimed leader captain Ibrahim Traore. (Photo by AFP)

Reports that Burkina Faso’s military junta intends to withdraw gold mining permits from unnamed foreign companies sent shares in West African Resources sharply lower on Monday, with the company monitoring the situation closely.

The African nation’s military leader Ibrahim Traore, who seized power in a coup in 2022, told the country’s citizens in a radio address over the weekend that the government would seek to exercise more control over the gold sector.

“We know how to mine our gold and I don’t understand why we’re going to let multinationals come and mine it,” Traore was reported as saying.

“In fact, we are going to withdraw mining permits.”

Traore did not specify which permits or companies might be targeted.

West African Resources shares plunged by 25 per cent on Monday before being placed in a trading halt.

They were returned to trade after the company released a statement which said it had a good relationship with the government.

“West African Resources is not aware of any plans by the government of Burkina Faso to withdraw any of its mining permits,’’ the company said.

“President Traore has spoken previously about taking action against miners who have not adhered to the mining code and also regulating the semi-mechanised and artisanal mining sectors.

“The government remains supportive of West African Resources’s position in Burkina Faso as demonstrated by recent positive interactions between (the company) and the government last month, with West African Resources being awarded the Best Mining Company Award at SAMAO (west African Mining Week) for the second consecutive year, and the constructive and open dialogue that West African Resources has been engaged in with government around the new mining code announced earlier this year.’’

The company said it was on track to achieve its annual guidance of 190,000-210,000 ounces of gold this year with production set to peak at 494,000 ounces in 2030.

The company said its operations at its Sanbrado mine and its Kiaka development project - both of which are 10 per cent owned by the government - “are progressing without interruption’’.

“West African Resources is continuing to monitor the situation in Burkina Faso and will provide more updates when appropriate,’’ the company said.

Burkina Faso nationalised two mines in August, and last year revised its mining code to increase the state’s free carried interest in new mining projects from 10 to 15 per cent.

The mines which were nationalised were reportedly sold last year by London-listed Endeavour Mining to Lilium Mining for $US300m, and were then acquired by the government for about $US80m.

Endeavour still owns projects in Burkina Faso including the Mana mine which produces more than two million ounces of gold per year.

Russia’s Nordgold and Canada’s Orezone Gold Corporation also operate in Burkina Faso.

West African Resources shares recovered to be trading 16.2 per cent lower at $1.39 at midday after being reinstated to trade.

Originally published as West African Resources shares plunge after junta leader targets miners