ASX:WAF
West African Resources Ltd
Investment Summary
The fund managers believe that West African Resources Ltd (WAF) is positioned for significant growth due to favorable market conditions. They note that the company’s 2024 results showed revenue of $730 million and profit after tax of $246 million with an average gold price of USD 2,391 per ounce. Given the current gold price of USD 3,111 per ounce, which is 30% higher than the 2024 average, WAF is expected to see a profit increase well above this percentage. Furthermore, the upcoming Kiaka mine, set to begin production in Q3 2025, is anticipated to double WAF's gold production by 2026. At the projected growth rates, WAF's PE ratio of 4 for 2026 indicates it remains undervalued compared to market averages for gold producers, presenting a compelling investment opportunity.
Commentary From The Managers
Cadence Capital
31 Mar 2025
$2.32
- Cadence Capital provides an update on their investment thesis regarding West African Resources Ltd (WAF).
- In March, WAF reported 2024 results with revenues of $730m, driven by an average gold price of USD 2,391 per ounce.
- Profit after tax for WAF stood at $246m.
- As of now, the gold price is USD 3,111 per ounce, reflecting a 30% increase over the 2024 price.
- Given the leveraged nature of gold companies, WAF is expected to see a profit increase exceeding 30% in 2025.
- This projection excludes potential profits from the new Kiaka mine, which is expected to commence production in Q3 2025.
- The new mine is anticipated to double WAF's gold production by 2026.
- At current gold prices, WAF is estimated to have a PE ratio of 4 for 2026, significantly lower than market averages.
- This low PE ratio is especially noteworthy for a gold producer, indicating potential value.
- Cadence Capital continues to hold a positive outlook on WAF based on these developments.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.