Shares in gold miner West African Resources (ASX:WAF) jumped more than 10 per cent at one stage on Tuesday after it said its Burkina Faso mine would not be hit by a change in mining laws that emerged over the weekend.
At the same time, the company said in a separate statement that it is on track to hit the upper end of its full-year guidance despite reporting a drop in September quarter production.
The production update emerged at 8:19am Tuesday. The second statement on the future of mining in Bukina Faso emerged at 9:40am.
Shares fell nearly 20 per cent on Monday thanks to reports about doubts over the future of the Sanbrado and Kiaka gold projects in the country. Burkina Faso's military junta had said over the weekend that it is planning to withdraw mining permits from some foreign companies.
In that second statement, WAF told the market it has been reassured by government officials that its mining permits in Burkina Faso were in "good standing”.
"Companies operating in compliance with the laws of Burkina Faso, which includes WAF and many other mining companies, will not have their mining permits withdrawn or revoked," the company said in a statement to the ASX.
"Officials from the Ministry of Mines and Quarries confirmed that none of WAF’s mining permits are under review and all of them remain in good standing,” Executive chair and CEO, Richard Hyde said in the second statement to the ASX.
Earlier, WAF had reported third quarter production of 47,799 ounces from its Sanbrado mine in Burkina Faso. While the company said that was down nearly 6 per cent from the prior quarter, it was also down a more substantial 14 per cent from the 55,768 ounces produced in the same quarter of 2023.
Quarterly sales also fell 5.4 per cent (from the June quarter) to 49,643 ounces, but these were at a higher average price of US$2,493 per ounce. Gold sales in the year ago September quarter totalled 50,738 ounces at US$1,932 an ounce, so a nice gain there.
Production for the 9 months to September was 155,443 ounces, down nearly 8 per cent from 168,726 a year ago.
The company said it is tracking towards the upper end of its 2024 gold production guidance of 190,000 to 210,000 ounces. Output in the 2023 year was 226,823 ounces. but a much higher gold price will more than offset 2024’s production shortfall.
WAF blamed the lower production on a lower head grade and recovery in the quarter. Underground mined ounces fell 14 per cent from the prior quarter, mainly related to a lower average underground production grade.
