"Burkina Faso Seeks to Ease Worries Around Mining Stake Plans"

" Burkina Faso Seeks to Ease Worries Around Mining Stake Plans \r\n\r\nBurkina Faso has moved to reassure investors that its request to acquire an additional 35% stake in West African Resources\u2019 (ASX: WAF) Kiaka gold mine is an option, not a demand, under the country\u2019s new mining framework.\r\n\r\nSpeaking at a mining conference in Australia, Mamadou Sagnon, director-general of the mining registry, explained that the\u00a0 Mining Code introduced in July last year allows the state to secure a minimum 30% paid interest in mining projects, in addition to its 15% free-carried stake. The paid portion is linked to exploration and feasibility costs rather than the mine\u2019s market valuation.\r\n\r\nThe Code also gives the government and local investors the right to acquire further equity on commercial terms.\r\n\r\n\u201cIn the case of West African\u00a0Resources, the government addressed a letter to solicit the opening of participation up to 35%,\u201d Sagnon said. \u201cFor the moment, it is a solicitation \u2013 it is not forcing.\u201d\r\n\r\nSagnon stressed that the measure was intended to strengthen confidence in the sector, rather than deter foreign capital.\r\n\r\nHe argued that state participation would boost confidence rather than drive capital away. \u201cWe believe that if the State is in the participation of the company, there will be more confidence to stay in the country and make more investment,\u201d he said.\r\n\r\nShares in West African Resources have been halted since last Thursday. The company had previously announced trading would resume Monday.\r\n Regional changes \r\nInvestor unease reflects broader concerns about resource nationalism in West Africa, where governments are revising mining codes to capture more local benefit. Burkina Faso\u2019s neighbours, including Mali, have already shaken investor sentiment with new rules and political instability.\r\n\r\nWAF\u2019s general manager of sustainability, Mirey Lopez, declined to comment beyond referring stakeholders to the company\u2019s announcements. \u201cWe are in dialogue with the government and we are looking forward to a resolution,\u201d she said during\u00a0 her presentation \u00a0at the\u00a0mining\u00a0conference.\r\n\r\nBurkina Faso, Africa\u2019s fourth-largest gold producer, has already moved major assets into its new state-owned mining company, Soci\u00e9t\u00e9 de Participation Mini\u00e8re du Burkina (SOPAMIB).\r\n\r\nIn June,\u00a0 five gold mines and exploration permits , previously held by Endeavour Mining and Lilium, were transferred to SOPAMIB. The push followed the nationalisation of the Boungou and Wahgnion mines in August 2024 for about $80 million, far below their estimated $300 million value.\r\n Newly producing \r\nWest African Resources\u00a0 poured first gold at Kiaka in June . The mine is now in production and is expected to average 234,000 ounces annually for 20 years starting in 2025, generating roughly $795.6 million per year at current prices.\r\n\r\nLast week, WAF confirmed that it had aligned the equity structure of its Sanbrado, Kiaka and Toega projects with the new Code, raising the government\u2019s free-carried stake in each to 15%.\r\n\r\nThe company also revealed that Burkina Faso had enforced a mandatory dividend rule. In August, WAF\u2019s subsidiary Somisa, owner of Sanbrado, declared a $98.35 million priority dividend to the government, representing 15% of retained earnings through 2024. WAF expects Somisa, Kiaka SA and Toega SA will all be required to distribute 15% of profits annually, with WAF entitled to repatriate the remainder.\r\n\r\nWAF also revealed last week that the Burkina Faso government had enforced a non-discretionary dividend rule.\r\n Strong leader at the helm \r\nThe mining reforms reflect the growing influence of Ibrahim Traor\u00e9, the 37-year-old military leader who seized power in 2022 and declared himself president. Traor\u00e9 has pushed for greater state control of resources while casting his rule as part of a Pan-African, anti-Western revival.\r\n\r\nHis supporters hail him as a defender of sovereignty. In April, thousands rallied in Ouagadougou after an alleged counter-coup attempt failed. Demonstrations spread to London, Kingston and Montego Bay, where diaspora groups praised him as a \u201cBlack liberator.\u201d\r\n\r\nMeanwhile, Orezone Gold (ASX, TSX: ORE), which operates the Bombor\u00e9 mine,\u00a0 also halted trading \u00a0after the news of the government\u2019s request at Kiaka. Following weekend talks, Orezone\u00a0 confirmed Tuesday \u00a0that authorities have no plans to purchase an interest in Bombor\u00e9, calling the Kiaka situation \u201cspecific and not a reflection of any broader intent.\u201d"

"Burkina Faso Seeks to Ease Worries Around Mining Stake Plans"

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