West African Resources says its mining permits in Burkina Faso not at risk
West African Resources says the Burkina Faso government has confirmed its gold mining rights in the nation are not under threat.
West African Resources has reassured shareholders its gold mining rights in Burkina Faso are not under threat, after the country’s military leader flagged a crackdown on foreign mining companies over the weekend.
The Australian gold miner’s shares dipped as much as 25 per cent on Monday after Burkina Faso’s leader Ibrahim Traore, who seized power in a coup in 2022, told the country’s citizens in a radio address 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 told the ASX on Tuesday it had been in contact with government officials who had clarified the government’s stance.
“The company has been in contact with the government officials who have informed us that the president’s comments with respect to the potential withdrawal of mining permits were directed to those companies operating in violation of the laws of Burkina Faso,’’ West African Resources said.
“Companies operating in compliance with the laws of Burkina Faso, which includes West African Resources and many other mining companies, will not have their mining permits
withdrawn or revoked.
“Officials from the Ministry of Mines and Quarries confirmed that of none West African Resources’ mining permits are under review and all of them remain in good standing.’’
The company’s shares were up 10.6 per cent at midday on Tuesday at $1.48, recovering from Monday’s plunge but still well down on Friday’s close of $1.66.
West African Resources also released a quarterly production update on Tuesday, saying it was tracking towards the upper end of its 2024 guidance of 190,000 to 210,000 ounces of gold.
The company produced 47,799 ounces of gold in the third quarter and sold 49,643 at an average price of $US2493.
Gold production in the third quarter fell 6 per cent from the previous quarter, mainly related to a slightly lower head grade and recovery, 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.
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