As if tanking gold prices weren’t enough bad news for Canadian junior gold mining and exploration companies, now one of the more promising gold-mining nations in Africa is in a state of turmoil.
Overnight, Burkina Faso has gone from one of the more promising destinations for gold mining and exploration companies like Vancouver’s True Gold Mining Inc. (TSX-V:TGM) and B2Gold Corp. (TSX:BTO) to one big question mark, following the ouster of the former president, Blaise Compaore, in what has been described as a military coup staged to quell unrest.
Compaore was forced to step down Friday, October 31, following violent protests over his plans to extend his presidency to a fifth term. Burkina Faso’s military stepped in and appointed Lt.-Col. Isaac Zida as interim president, whose leadership is being challenged by opposition leader Saran Sérémé, according to various news reports.
rue Gold’s stock prices took a dip October 31, falling 37% from $0.24 per share to $0.15, but regained some of its value Monday, November 3. B2Gold’s prices also dropped from $1.98 October 30 to $1.70 October 31, regaining some of its value November 3.
Burkina Faso not only has rich, undeveloped gold reserves, it has also been viewed as a mining friendly nation that has welcomed several foreign companies to develop new gold mines.
In August, True Gold inked a US$100 million deal with two Canadian streaming companies – Sandstorm Gold Ltd. (SSL:TSX) and Toronto’s Franco-Nevada Corp. (FNV:TSX) – to finance a new $131-million open-pit gold mine in Burkina Faso.
Last year, B2Gold acquired Volta Resources for US$63 million, giving it an advanced gold project and two exploration projects in Burkina Faso.
On October 30, True Gold issued a brief statement saying the unrest in Burkina Faso’s capital had not had an impact on the company’s Karma Gold operations.
“(T)he company’s operations at the Karma Gold project, located approximately 185 kilometres from the capital of Ouagadougou, are uninterrupted, on-site work continues, and all of its employees are accounted for and safe,” the company stated.
The Karma project is True Gold’s only property. It has a stated target of pouring first gold by the end of 2015, ramping up to full production of 150,000 ounces of gold per year in 2016.
B2Gold is more diversified and has several projects outside of Burkina Faso.