West African Resources closely monitoring new mining code in Burkina Faso

Australian junior West African Resources (ASX: WAF) is among several mining companies closely watching the Burkina Faso government’s release of a new mining code.

West African executive chair and chief executive officer Richard Hyde said key changes under the new mining code include increasing the government’s free-carried equity interest in mining projects from 10% to 15%.

Based on the company’s interpretation of the text, however, the new code will only apply at the granting of the initial mining licence to new projects.

Large investor

Mr Hyde noted that the company is one of Burkina Faso’s largest investors and, through its 90%-owned Burkina Faso subsidiaries, holds three mining licences granted under the nation’s current 2015 mining code.

“We will continue to engage constructively with the Burkina Faso government in relation to the adoption of the new mining and local content laws,” he said.

He also confirmed that construction at the Kiaka project remains on track, with first gold to be poured in Q3 2025.

New code terms

According to West African, the new code includes the reduction of the maximum tenure of initial mining permits from 20 years to ten years and the maximum term of an initial mining convention to five years.

The term of existing mining permits issued under the 2015 mining code may be reduced to five years.

Mining permits and mining conventions will continue to be renewable for periods of five years, consistent with the 2015 code.

West African does not have any pending mining licence applications.

Guidance unchanged

The company said its assessment of other potential impacts of the new code on its mining projects is ongoing.

However, its 2024 gold production guidance of 190,000 to 210,000 ounces of gold at an all-in sustaining cost of around $1,991/oz remains unchanged.

Burkina Faso was the world’s 15th-largest producer of gold in 2023, before a decline in production saw the government appoint a new Mining Minister last December.

The World Bank says the military-led nation’s security situation has impacted its economy in recent years but, provided the situation does not deteriorate further, growth could slowly pick up and average 4% over 2024-26, driven by recovering mining growth.