West African Resources (ASX:WAF) reported a strong December 2025 quarter, highlighting higher gold output driven by the ramp-up at its Kiaka operation and continued steady production at Sanbrado in Burkina Faso. Management said the quarter’s operating performance positions the company well for calendar year 2026, supported by record gold prices and the company’s decision to remain fully unhedged.
Quarterly production led by Kiaka ramp-up
Management reported that the company produced “just over” 112,000 ounces of gold across the Sanbrado and Kiaka operations during the December quarter. For full-year 2025, total production was “a touch over” 300,000 ounces, which management said was within guidance, with Kiaka stepping up in the fourth quarter.
At Sanbrado, the company produced just under 50,000 ounces in Q4, bringing full-year production to 205,228 ounces. Management said this achieved the upper end of the mine’s 190,000 to 210,000 ounce guidance range. Sanbrado open pit operations recommenced during the quarter under a new owner-mining operating model, with mill feed sourced from the M5 North pit and previously mined ore stockpiles.
Underground mined ounces from M1 South were 37,955 ounces in the quarter, which management said was 16% below the prior quarter due to a 14% decline in mined grade and slightly lower mined tonnes.
The company also emphasized it delivered the year’s production without “significant health, safety, or social incidents,” which management said reflects its commitment to operating safely and responsibly.
Record pricing and cash generation while unhedged
West African Resources said it sold 105,995 ounces of gold in the quarter at an average realized price of $4,058 per ounce, noting it remains fully unhedged. Management said the unhedged position enabled the company to benefit from record gold prices.
All-in sustaining costs averaged $1,561 per ounce across the two operations during the quarter, helping generate AUD 389 million of cash flow in Q4 after income tax payments of AUD 48 million, according to management.
The company ended 2025 with an AUD 584 million cash balance as of 31 December, and also held AUD 177 million worth of unsold gold bullion due to shipment timing.
Chief Financial Officer Padraig (surname not provided in the transcript excerpt) said gold sales revenue totaled AUD 662 million in Q4. For the full year 2025, management said the company generated more than AUD 1.5 billion in revenue.
Capital investing activities used AUD 113 million of cash in the quarter, including AUD 89 million for Kiaka and AUD 23 million for Toega. Financing activities used AUD 23 million of cash in Q4, with loan interest, principal, and financing expenses offsetting cash received from equipment finance drawdowns.
Exploration results and Toega development progress
On exploration, management said diamond drilling beneath the M5 open pit ore reserve at Sanbrado confirmed the potential to extend open pit mining. The company reported gold mineralization more than 300 meters below the current ore reserve, and said mineralization remains open at depth. Management noted this is the first substantial drilling at M5 North since about 2017 and said an updated ore reserve could consider a cutback of the northern portion of the M5 open pit.
Management cited drilling results including 16 meters at 11.2 grams per tonne gold and broader intersections such as 45 meters at 1.9 grams per tonne gold. The company said diamond drilling at M5 North will continue through 2026.
At Toega, which is being developed as a satellite operation for Sanbrado, management said a 13,500-meter infill drilling program is underway to infill the underground resource, with results expected over coming quarters. Grade control drilling began during the quarter, with 6,600 meters completed; management expects that program to finish in early Q1 2026.
Operationally at Toega, management said earthworks for the mine services area were completed and construction has commenced on a mobile maintenance workshop, office, and related infrastructure. Haul road construction was described as well advanced and on schedule to enable ore delivery to the Sanbrado process plant in early Q3 2026.
Toega open pit mining will be owner-operated, similar to Sanbrado, management said. Mining equipment continued arriving and commissioning is underway, with all equipment expected to be fully operational by the end of the current quarter. Pre-stripping commenced, with 250,000 bank cubic meters moved to date, and material movement is expected to ramp up to steady state by the end of Q1 2026.
Power reliability at Kiaka and government discussions
Management said Kiaka’s unit costs are improving as production increases, and expects further cost reductions as reliance on diesel generator power declines over coming quarters. During the Q&A, management said stable power remains “the last piece of the puzzle” for Kiaka. The company reported it had two to three weeks of stable grid power in December, which helped it ramp production and consistently reach 30,000 to 35,000 tonnes per day.
Management said the grid had been unstable more recently, while work is being undertaken by SONABEL, the government’s energy provider. The company said it expects to return to the grid in coming days and is also adding equipment to help stabilize power on its side. Management also said additional diesel generation capacity is being brought onsite, including five generator sets that arrived “overnight,” taking diesel capacity to about 30 megawatts.
Longer term, the company said it is considering installing a full heavy fuel oil (HFO) power station as a cheaper-to-run backup compared with diesel. Management added that with full power, Kiaka is capable of processing more than 10 million tonnes per annum without “material infrastructure changes.”
On discussions with the Burkina Faso government regarding Kiaka, management reiterated that engagement is constructive but said there were no material updates. In a later Q&A exchange, management said it had responded to SOPAMIB late last year with information including construction costs and economic models, and characterized discussions as cordial. Management said the government has indicated it believes in paying market price for an additional share in Kiaka, and that the company is awaiting a response to its most recent correspondence.
Management also referenced the level of government take at current gold prices, stating that the company paid “$90 million” in direct taxes and royalties in one quarter and suggesting the government’s share of cash flow from mining operations in Burkina Faso is approaching 60% at current prices, alongside an escalating royalty.
Capital management priorities and upcoming updates
When asked about debt service, management said accelerating debt reduction will be a focus through the year to bring debt down to a manageable level. Management also said the board is actively discussing capital management beyond 2026, including potential share buybacks or dividends, after debt reduction.
Looking ahead, management said it expects to release 2026 annual production guidance and outline its capital management strategy later in Q1 2026. The company is also working on a resource and reserve update and said a new ten-year plan is expected in late March, incorporating drilling at M5 North and M5 South and extensions at M1 South underground. Management said it expects a positive increase versus the prior plan and reiterated its target of roughly 500,000 ounces per annum over about 10 years, as previously communicated.
About West African Resources (ASX:WAF)
West African Resources Limited engages in the mining, mineral processing, acquisition, exploration, and project development of gold projects in West Africa. The company has 90% interests in the Sanbrado Gold Project located in Burkina Faso; and Kiaka gold project located in Burkina Faso. It also holds 100% owned exploration license in the Toega Gold Project located in Burkina Faso. West African Resources Limited was incorporated in 2006 and is based in Subiaco, Australia.
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