West African Resources Ltd

West African Resources reported Q1 gold production of 107,728 ounces at an all-in sustaining cost of USD 1,921 per ounce. Group gold sales revenue was AUD 742 million, based on an average gold price of USD 4,945 per ounce, and operating cash flow was AUD 440 million. Cash ended the quarter at a record AUD 847 million, with AUD 213 million in unsold gold bullion and USD 450 million of notional net cash. Sanbrado produced 42,024 ounces at site sustaining cost of USD 2,034/oz, while Kiaka produced 97,906 ounces from open pit mining and 65,704 ounces from processing, at a site sustaining cost of USD 1,779/oz. The company reaffirmed 2026 guidance of 430,000 to 490,000 ounces of gold and AISC below USD 1,900/oz. It also said subsidiary minority distributions are expected to total around AUD 68 million in Q2, and about AUD 120 million will be paid for 2025 taxes.

Richard Hyde emphasized operational momentum across Sanbrado and Kiaka, calling the quarter productive and saying the company is on track for its annual goals. He framed the updated resource and 10-year plan as evidence of a larger, more sustainable business, with average production of 533,000 ounces per year and peak production just under 600,000 ounces in 2030. On the government transaction, he said the company expects cash payment for the Kiaka equity sale and aims to finalize terms by year-end, while also leaving the door open to future collaboration on nearby assets.

Padraig O'Donoghue highlighted the financial strength of the quarter, pointing to AUD 742 million of gold sales revenue, AUD 440 million of operating cash flow, and a record AUD 847 million cash balance. He said notional net cash more than doubled to USD 450 million and broke down investing cash outflows of USD 90 million, including USD 38 million at Sanbrado, USD 23 million at Toega, and USD 29 million at Kiaka. He also noted financing cash use of USD 45 million, mainly from USD 28 million of loan repayments and USD 11 million of interest payments, and said the company has a large debt bullet of about USD 100 million due in 2028.

Analysts focused on how the Burkina Faso government would pay for the additional 25% stake in Kiaka, whether the valuation was consistent with the new mining code, and whether similar changes could later affect Sanbrado. Management said it expects cash payment, described the valuation method as unusual but permitted under the 2024 Mining Code, and said it does not believe the other operations are currently targeted. Questions also covered debt repayment timing, tax payments, dividend policy, and fuel supply; management said tax and minority distributions will be large in Q2, dividends will likely be meaningful but no formal policy is set yet, and it is managing fuel through existing logistics and stockpiles.