WAF - West African Resources

[farmerge]

This is my 'safe' pick for the 2024 comp, proudly sponsored by Sean K inc.

It has the same ounces as DEG but is more than half the MC. I know there's a discount for WAf miners compared to WA but this is not justified, especially when gold is going to $2700 next year. Plus, WAf will go through a period of relative stability with only five x coups, instead of the regular 10.

I would have preferred to pick the GDX and/or GDXJ, but that's a bit boring.

Of course, this means everyone should short the gold sector.

Only thing wrong with WAF is it is not is a safe country

 

[Sean K]

Only thing wrong with WAF is it is not is a safe country

It's in comparison to the other three picks which are far more dangerous. I would not recommend anyone invest in any of them.

 

[farmerge]

It's in comparison to the other three picks which are far more dangerous. I would not recommend anyone invest in any of them.

Though a few years ago I did quite well out of WAF, but it was a nervious investment left me wondering if I would be a winner or grinner, until I decided enough is enough.

 

[Sean K]

2023 guidance achieved but guidance for 2024 not out until the end of the quarter. Hopefully it's surprise to the upside. Production profile should improve with M5 UG additions.

Market doesn't like the area across $1.00 ish... I'm hoping gold continues higher this year and this can get back to ATHs around the end of the year for about a 50% gain.

 

[mullokintyre]

Quarterly out.
About what was expected, interesting to see the guidance for next year.
I suspect it won't get a kick along till either gold shoots to the moon or the Kiaka mine is up and running in 2025.
Mick

 

[debtfree]

WAF - Market Index had this in the wrap this morning and thought it was good enough for a update here.

 

[Sean K]

WAF - Market Index had this in the wrap this morning and thought it was good enough for a update here.

View attachment 170036

Might be breaking through. ATHs miles away still.

 

[Sean K]

Might be breaking through. ATHs miles away still.

View attachment 170037

It looked like a break, then it was the weekend, then gold took a slight pause and bam. This TA stuff is crap.

2024 Production Guidance out and it's less and more in the wrong directions. Not sure if that's factored in or expected but you never know in this wacky world of the stock market.

 

[Sean K]

LOL, down 20% in 2 days. It's not a good look on the AISC but an overreaction, IMO. Longer term opportunity. Famous last words, again.

 

[mullokintyre]

LOL, down 20% in 2 days. It's not a good look on the AISC but an overreaction, IMO. Longer term opportunity. Famous last words, again.

Yea, I was kinda shocked at that.
kept rereading the guidance over and over and could not see that it was worth that sort of fall.
It had already fallen after the quarterly where the lower output was flagged.
I hope it falls a lot further,would buy at these levels, but would be happier to buy at lower levels.
It is still going to make money, and will make more money when the kiaka expension comes on board.
There are risks of course, country risk in West Africa, risk of gold falling a long way, capex overruns, world war 3 etc etc.
but at these levels, its a risk i am willing to take.
Mick

 

[finicky]

I've given WAF what I believe is a conservative valuation of $1.30. This is purely for my own purposes and my assumptions and calculations would probably be laughble to someone with better analytical abilities.
I will give my scatchings in the sand some other time: suffice now to say it is made on an assumed 2024 ROE and 2023 book value based crudely on the production and AISC guidance just given for 2024. I have figured from that a plausible 2024 ROE of 17% (2022 ROE was 23%, 2023 should be similar imo) and used the 2022 book value of 0.68 as a proxy for 2023. Normally I would pay 3 X BV for that ROE but this is Burkina Faso with a govt Straight Outta Compton and the north seething with muslim insurgents. So 2 X book value for those silly enough to take on the risk of losing the lot: 2 X 0.68 = $1.30 rounded down.
Nothing for doubling of production from Kiaka in 2 years which seems unfair, and nothing for a higher gold price in 2 years for an unhedged producer.
Notwithstanding this I have no present intention of adding to the risk that I already have with WAF
See article which states that 5 mines in BF were shut down in 2022 due to militant activity.

https://www.mining.com/web/burkina-faso-targets-bigger-royalties-as-gold-production-drops/

Held and Holding

 

[Sean K]

I've given WAF what I believe is a conservative valuation of $1.30. This is purely for my own purposes and my assumptions and calculations would probably be laughble to someone with better analytical abilities.
I will give my scatchings in the sand some other time: suffice now to say it is made on an assumed 2024 ROE and 2023 book value based crudely on the production and AISC guidance just given for 2024. I have figured from that a plausible 2024 ROE of 17% (2022 ROE was 23%, 2023 should be similar imo) and used the 2022 book value of 0.68 as a proxy for 2023. Normally I would pay 3 X BV for that ROE but this is Burkina Faso with a govt Straight Outta Compton and the north seething with muslim insurgents. So 2 X book value for those silly enough to take on the risk of losing the lot: 2 X 0.68 = $1.30 rounded down.
Nothing for doubling of production from Kiaka in 2 years which seems unfair, and nothing for a higher gold price in 2 years for an unhedged producer.
Notwithstanding this I have no present intention of adding to the risk that I already have with WAF
See article which states that 5 mines in BF were shut down in 2022 due to militant activity.

https://www.mining.com/web/burkina-faso-targets-bigger-royalties-as-gold-production-drops/

Held and Holding

I caught the knife at 81c for a short term opportunity. A bit worried something else is going on as this sell-off looks unreasonable on the surface of it, so finger twitching on the sell button.

 

[Sean K]

I caught the knife at 81c for a short term opportunity. A bit worried something else is going on as this sell-off looks unreasonable on the surface of it, so finger twitching on the sell button.

Looks like I caught the knife by the handle. No blood lost. Yet.

 

[qldfrog]

Looks like I caught the knife by the handle. No blood lost. Yet.

View attachment 171147

Following with interest as I had a go at the dropping knife too

 

[Sean K]

I'm not sure if this is any surprise one way or the other. Webinar Investor Call starts in 2 mins.

 

[finicky]

Misleading announcement. Should be, "WAF to produce 10m ozs over 10 years if the Straight Outta Comptom larcenous goons in government and the savage Islamic terrorists (who have already closed down 5 mines in the north) allow us."

Held

 

[Sean K]

One of the few knife catches that's worked recently. Hopefully this old general level of resistance turns support. Should do if POG keeps running like a champion.

Broker's tips of $1.50 is about where I pop Moet.

 

[mullokintyre]

One of the few knife catches that's worked recently. Hopefully this old general level of resistance turns support. Should do if POG keeps running like a champion.

Broker's tips of $1.50 is about where I pop Moet.

View attachment 172263View attachment 172262

1.50 would suit me rather nicely thank you very much.
So who or what is going to send the SP to such lofty levels?
Mick

 

[finicky]

Anticipation of Kiaka and the gold price.
Junta and islamists allowing.

 

[Sean K]

1.50 would suit me rather nicely thank you very much.
So who or what is going to send the SP to such lofty levels?
Mick

Agree with @finicky but tweak the Kiaka bit to be successful execution of the mine build on time and budget.

Another change to the royalty/tax situation would be a dampener. I also suspect they are going to take over Orezone which could put a spanner in the works for a runway to $1.50.

POG's going to $2600 on a break out from the C&H so if that happens hold onto your hats.