West African Resources (ASX: WAF), an Australian gold miner that gets all its revenue from Burkina Faso, plunged the most in about seven years after soldiers ousted President Roch Marc Christian Kabore in a coup.
The shares fell 17%, the biggest drop since November 2014, in Sydney on Tuesday. The company produced 87,324 ounces of the metal in the three months through December, according to a company statement.
Investors are weighing the impact of the coup on production with gold near a two-month high. The soldiers who seized power said the takeover was necessary because Kabore was unable to address deteriorating security in Burkina Faso. The president had faced growing opposition to his government’s failure to tackle a mushrooming Islamist insurgency in the country.
West African Resources’ Sanbrado gold operations in Burkina Faso are continuing to operate as usual, it said in a statement. “The company is continuing to monitor the current political situation in the country and will provide more updates when appropriate.”
The coup in Burkina Faso is the sixth in Africa over the past 18 months — four of which were in the west of the continent. Military takeovers in Burkina Faso, and two in Mali, have come as the Islamist insurgency destabilizes West Africa.
Burkina Faso is Africa’s fourth-largest gold producer. Toronto-listed Endeavour Mining Plc gets nearly three-quarters of its sales from the landlocked African nation, according to data compiled by Bloomberg. Among companies listed in the U.S. stock market, Sandstorm Gold Ltd. gets about 18% of its revenue from Burkina Faso.
(By Jackie Edwards and Abhishek Vishnoi)