West African Resources (ASX:WAF) is poised to become a sustainable, highly profitable producer, with the potential to exceed 500,000 ounces of gold per annum over a very long mine life, according to a Feb. 21 note by Euroz Hartley.
The company's Sanbrado gold mine at Burkina Faso is on track to produce 190,000 to 210,000 ounces of gold at an all-in sustaining cost of under $1,350 per ounce, with costs rising due to higher royalties, sustaining capex, and one-offs, Euroz said.
Despite these higher costs, WAF's growth projects, such as the Toega open pit, M5 South underground, and the connection to grid power, are expected to support a long-life, low-cost operation at Sanbrado, Euroz added.
Euroz maintained the company's buy rating but raised its price target to AU$3.35 from AU$3.10.
Shares of the company fell 3% at market close.
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