Could West African Resources (ASX: WAF) Be the Dark Horse of 2025?

When investors think of gold miners, the focus often lands on the giants—those with deep pockets, sprawling operations, and decades of production history. Yet sometimes, the most interesting opportunities sit in the shadows, away from the crowded spotlight. West African Resources (ASX: WAF) has been steadily building momentum, and 2025 may finally be the year it graduates from being “just another mid-tier” to becoming a serious player in the gold sector.

At a time when larger competitors are struggling with rising costs, lower grades, and geopolitical headaches, WAF is quietly moving in the opposite direction—delivering stronger output, lower costs, and higher margins. Let’s break down why this company may just be the dark horse of 2025.

Production Momentum and Cashflow Strength

WAF’s flagship Sanbrado Gold Mine in Burkina Faso continues to be the foundation of its story. Now in its fifth year of production, Sanbrado has consistently hit or exceeded expectations—a rare feat in an industry often plagued by misses.

1. FY25 production guidance: 190,000–210,000 ounces, at site sustaining costs of under US$1,350/oz.
2. Q1 FY25 results: Already 50,033 ounces produced at US$1,262/oz, signaling they’re on track.
3. FY24 production: 206,622 ounces at US$1,240/oz, with 199,550 ounces sold unhedged at an average price of US$2,391/oz.

This unhedged strategy—selling gold directly at market prices—has proven highly lucrative. With spot prices above US$2,800/oz during parts of 2025, the company’s margins have expanded sharply.

The impact is showing up in the balance sheet:

• Operating cashflow in H1 2025: $136.58 million.
• Cash reserves: A strong $285.28 million by mid-year.

For a miner of its size, this kind of financial cushion gives WAF flexibility—whether that’s paying down debt, funding expansion, or returning value to shareholders.

The Game-Changer: Kiaka Gold Project

If Sanbrado laid the foundation, the Kiaka Gold Project may well be the crown jewel. First gold was poured in June 2025, and the mine is now ramping up toward commercial production expected in Q3 2025.

Here’s why Kiaka matters so much:

• Scale and longevity: Expected to produce 234,000 ounces per year for 20 years, making it one of the largest undeveloped gold projects in West Africa before construction.
• Production uplift: Once fully ramped, WAF’s annual output will more than double, exceeding 420,000 ounces from 2026 onward.
• Reserves strength: Together, Sanbrado and Kiaka boast over 6.5 million ounces of gold reserves, offering rare long-life visibility in an industry often criticized for depleting resources.

Simply put, Kiaka transforms WAF from a one-mine company into a diversified mid-tier powerhouse.

The Bullish Case: Pricing Power and Growth

So why are investors increasingly warming up to WAF in 2025?

1. Unhedged Leverage: Many miners lock in forward sales at fixed prices. WAF hasn’t. With gold prices hitting historic highs, every ounce goes straight to the bottom line.
2. Operating Leverage: Kiaka’s scale spreads fixed costs more efficiently, boosting per-ounce profitability.
3. Exploration Upside: WAF plans 115,000 meters of drilling in 2025, targeting both resource upgrades at its existing mines and new discoveries in surrounding exploration permits.

In short, WAF is not just riding the gold price rally—it is positioned to amplify it.

The Risks That Keep It a “Dark Horse”

Of course, calling WAF a “dark horse” isn’t just about hidden potential—it’s also about uncertainty.

1. Sovereign Risk: Operating in Burkina Faso comes with challenges. The government has signaled moves to increase its share of mining projects—from the current 15% ownership stake to potentially 50% at Kiaka. That’s a big shift that could dent profitability.
2. Policy Risk: A mandatory 15% profit distribution is already in place, with room for more government take. Changes here could affect dividends and cashflow available to shareholders.
3. Execution Risk: Building and ramping a major project like Kiaka is never smooth sailing. Delays, cost overruns, or integration challenges with Sanbrado could eat into the company’s margin profile.

These risks explain why, despite its achievements, WAF is still priced with caution compared to some peers.

Valuation and Outlook

Despite those concerns, the numbers are pointing in a bullish direction.

• Net income: FY25 is expected to double year-on-year, with H1 net profit already at $185.8 million.
• Share price: WAF stock hit an all-time high in August 2025, up 77% year-to-date, as the market began recognizing its growth story.
• Valuation: Analyst fair value estimates suggest another 30%+ upside if execution at Kiaka goes smoothly and gold prices stay elevated.

The combination of rising production, expanding margins, and unhedged gold exposure makes WAF’s outlook among the most compelling in the mid-tier gold space.

The Bottom Line

West African Resources has quietly built itself into one of the most interesting gold stories on the ASX. With Sanbrado’s steady output, Kiaka’s transformative scale, and an unhedged exposure to record gold prices, the company is now delivering what larger players are struggling to achieve—growth, profitability, and longevity.

Yes, the risks are real—Burkina Faso’s regulatory shifts and the challenges of scaling up operations can’t be ignored. But that’s exactly what makes WAF a “dark horse.” It’s not the obvious pick. It’s the one investors may overlook—until the performance makes it impossible to ignore.

If sovereign risks remain manageable and execution at Kiaka stays on track, 2025 could mark the year West African Resources steps out of the shadows to become a true leader among ASX gold stocks.

Disclaimer:

General Financial Product Advice and Regulatory Framework: Pristine Gaze Pty Ltd (ABN 66 680 815 678, ACN 680 815 678) operates as Corporate Authorised Representative (CAR No. 001312049) of Alpha Securities Pty Ltd (AFSL 330757), which is licensed and regulated by the Australian Securities and Investments Commission under the Corporations Act 2001 (Cth). This report contains general financial product advice only and has been prepared without consideration of your personal objectives, financial situation, specific needs, circumstances, or investment experience. The information is not tailored to individual circumstances and may not be suitable for your particular situation. Before acting on any information contained herein, you should carefully consider its appropriateness having regard to your personal objectives, financial situation, and needs, and consider seeking personal financial advice from a qualified financial adviser who can assess your individual circumstances and provide tailored recommendations.

Investment Risks and Market Warnings: All investments carry significant risk, and different investment strategies may carry varying levels of risk exposure including total loss of invested capital. The value of investments and income derived from them can fluctuate significantly due to market conditions, economic factors, company-specific events, regulatory changes, commodity price volatility, currency fluctuations, interest rate movements, and other factors beyond our control. Securities markets are subject to market risk from general economic conditions and investor sentiment, liquidity risk affecting the ability to buy or sell securities at desired prices, credit risk from issuer default or deterioration, operational risk from inadequate internal processes, sector-specific risks including industry regulatory changes, technology obsolescence, management changes, competitive pressures, supply chain disruptions, and mining-specific risks including resource estimation uncertainty, operational hazards, environmental compliance, permitting delays, commodity price cycles, geopolitical factors affecting mining operations, and exploration risks. Small-cap and speculative mining stocks carry additional risks including limited liquidity, higher volatility, dependence on key personnel, limited operating history, uncertain cash flows, and potential failure to achieve commercial production.

Information Accuracy and Limitations: While we endeavour to ensure information accuracy and reliability, we make no representations or warranties (express or implied) regarding the accuracy, reliability, completeness, timeliness, or suitability of information provided, except where liability cannot be excluded under applicable law. This report may include information from third-party sources including company announcements, regulatory filings, research reports, market data providers, financial news services, and publicly available information, which we do not independently verify and for which we assume no responsibility. Past performance, examples, historical data, or projections are not indicative of future results, and no guarantee of future returns is provided or implied. To the maximum extent permitted by law, Pristine Gaze Pty Ltd and Alpha Securities Pty Ltd, together with their respective directors, officers, employees, representatives, and related entities, exclude all liability for any errors, omissions, inaccuracies, loss or damage (including direct, indirect, consequential, or special damages) arising from reliance on information provided, investment decisions made based on this report, market losses, opportunity costs, and technical issues or system failures.