Burkina Faso Clarifies Govt’s Stake in Kiaka Gold Mine as Optional Under New Mining Code

Burkina Faso Assures Investors: State’s Stake in WAF’s Kiaka Gold Mine Optional, Not Mandatory

Burkina Faso’s director-general of the mining registry, Mamadou Sagnon, has sought to reassure investors that the government’s request for a larger stake in West African Resources’ (WAF) new Kiaka gold mine is not an obligation but an option under the country’s updated mining legislation.

Speaking at the Africa Down Under conference in Perth, Sagnon explained that the July 2024 Mining Code increased the State’s free-carried interest in mining projects from 10% to 15%, while also allowing the government or domestic investors to acquire additional equity on commercial terms.

“In the case of West African Resources, the government addressed a letter to solicit the opening of participation up to 35%. For the moment, it is a solicitation – it is not forcing,” Sagnon clarified.

Sagnon emphasized that the measure was designed to strengthen investor confidence rather than deter foreign capital.

“We believe that if the State participates in the company, there will be more confidence to stay in the country and make more investment,” he said.

His comments come amid growing concerns about resource nationalism in West Africa, where several governments have amended mining codes to secure greater national benefit.

Mirey Lopez, general manager of sustainability at WAF, directed all inquiries about the government’s request to the company’s official announcements, noting that discussions with authorities are ongoing.

“We are in dialogue with the government and we are looking forward to a resolution,” she said.

WAF’s shares remain suspended on the ASX as the issue is addressed.

The Kiaka project, which recently began production, is among Burkina Faso’s largest new gold developments, with an expected average output of 234,000 ounces per year for 20 years starting in 2025.

Last week, WAF confirmed that it had aligned the equity structure of its three projects—Sanbrado, Kiaka, and Toega—with the revised Mining Code. This raised the government’s free-carried interest in each operation to 15%, reducing WAF’s stake to 85%.

The company also revealed that the government has enforced a non-discretionary dividend rule.

In August, Somisa, WAF’s subsidiary that owns Sanbrado, declared a $98.35 million priority dividend to the government, equal to 15% of its retained earnings to end-2024 under OHADA accounting standards.

“In communications with the State on the above priority dividend for 2024, it became apparent that payment of an annual priority dividend to the State in compliance with the Mining Code has become non-discretionary,” WAF stated.

Going forward, Somisa, Kiaka SA, and Toega SA are expected to make annual 15% profit distributions to the State, with WAF entitled to repatriate its remaining share.