Very interesting article on St*ckhead about the perils of...

Very interesting article on St*ckhead about the perils of investing in West Africa. Not only the governments in the various countries and their potential associated corruption but also the weather, religious zealots, amongst other hurdles that need to be overcome in order to be successful. Not to mention the current issue surrounding spod pricing. I haven’t included the full article. I’ll leave that to you.

———————————————-
West Africa is a big region. Sixteen countries crammed into more than 5 million km2. That’s a lot of prospective exploration ground to cover – in theory, of course.

It is no surprise that several intrepid Australians were among the first modern-day explorers to test the region’s mineral potential in the early 2000s as large parts of West Africa began to open up for business following the end of many long-running civil wars in countries such as Liberia, Sierra Leone and Côte d’Ivoire.

Ampella Mining and Orbis Gold both made multimillion ounce discoveries in Burkina Faso before being acquired by larger companies, as did Gryphon Minerals where Steve Parsons ofBellevue Gold (ASX:BGL)and nowFirefly Metals (ASX:FFM)fame originally made a name for himself.

Perseus Mining (ASXRU)went one better and developed its Edikan discovery in Ghana into a profitable mining operation and is now stands as one of the region’s most formidable gold producing companies.

Other gold explorers to have successfully transitioned into production in recent years includeWest African Resources (ASX:WAF)andTietto Minerals (ASX:TIE), while the likes ofLeo Lithium (ASX:LLL)andAtlantic Lithium (ASX:A11)are looking to emulate those feats in West Africa’s emerging lithium space in the coming years.

Unfortunately for many of those currently exploring or operating in the region, geopolitical issues continue to be the biggest hurdle when it comes to landing and maintaining long-term investment.

Investors received an untimely reminder of how quickly things can turn in West Africa only a fortnight ago whenSierra Rutile Holdings (ASX:SRX)announced it had no choice but to suspend production from its longstanding Area 1 operations in Sierra Leone after receiving notice from its host country government that the current fiscal arrangements would revert back to the original terms signed in 2001, rendering the mine “uneconomic”.

Last year the Government of Mali ordered Leo Lithium to cease initial DSO operations from its Goulamina project. Shares in the company have been suspended since September last year while it works towards what managing director Simon Hay recently described as “a constructive resolution” with government officials to build West Africa’s first major spodumene mine.

There are also extreme security concerns hanging over Mali and neighbouring Burkina Faso. Since 2012, Islamist insurgents have progressively taken control of the former and in recent years the violent attacks have spilled over into the latter where WAF is now essentially the only active ASX-listed company.