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On Wednesday, Canaccord Genuity initiated coverage on West African Resources Ltd (WAF:AU) stock, an established gold producer, with a Buy rating and a price target of AUD3.15. The firm highlighted the company's operations at the Sanbrado Gold Mine in central Burkina Faso and the development of the Kiaka Gold Project, located 45km south of Sanbrado.
West African Resources is currently in the midst of constructing the Kiaka Gold Project, with expectations of the first gold production in the second half of 2025. Canaccord Genuity anticipates that within a year, the company could be producing over 400,000 ounces of gold annually at an all-in sustaining cost (AISC) of approximately US$1,250 per ounce, potentially generating over AUD400 million in free cash flow on an annualized basis.
The analyst's forecast for West African Resources extends to its peak production years from 2026 to 2031. During this period, the company is expected to produce around 500,000 ounces of gold per year, with free cash flow reaching AUD700 million. This performance is projected to place West African Resources on par with other significant players in the industry, such as Perseus Mining, in terms of production and financial metrics.
Once both the Sanbrado and Kiaka projects are fully operational, Canaccord Genuity believes that West African Resources' output from Burkina Faso could exceed the production of the country's two largest mines, Essakane and Hounde, which are currently operated by IAMGOLD (NYSE:IAG) and Endeavour Mining, respectively.
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