West African Resources dives on Burkina Faso Junta mining permit cancellation threat
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Ructions in West Africa
Political instability and brewing conflict in West Africa’s Burkina Faso has hit gold miner West African Resources (ASX:WAF) right in the wallet as its share price plummeted today on the back of news from military Junta leader Ibrahim Traore that the government would cancel mining permits from (unnamed) foreign companies.
“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 on national radio.
“In fact, we are going to withdraw mining permits.”
The news sent WAF shares down over 25% on open just to recover, yet still down over 19% to trade at $1.34 per share at time of writing.
“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 WAF’s position in Burkina Faso as demonstrated by recent positive interactions [with] the government last month.”
The miner was awarded the Best Mining Company award at SAMAO (west African Mining Week) for the second consecutive year and has engaged with government around the new mining code announced earlier this year.
The $1.53bn gold miner owns and operates the Sanbrado gold mine, set to produce 190-210,000ozpa gold this year, while it constructs its Kiaka gold project with a long term aim to produce ~4Moz gold over the next decade.
Meanwhile, Ghanaians are protesting illegal artisanal mining practices in Africa’s number one gold-producing nation.
The mining practices often pollute rivers and surrounding land that cannot be properly utilised for agriculture.
Big mining kahunas such as Newmont and Gold Fields are required to adhere to strict environmental guidelines, yet the burgeoning small-scale prospector scene has no regulatory oversight.
Pressure is also coming from in-house trade and labour unions to address the situation and, if resolved, could be a boon for established mining companies with projects in the region.
WAF Price at posting:
$1.34 Sentiment: Buy Disclosure: Not Held
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