ASX-LISTED West African Resources (WAF) will have to pay a compulsory annual 15% dividend to the Burkina Faso government as part of accepting the new 2024 Burkina Faso mining code.
This was revealed in WAF’s interim report for the six months to end-June in which executive chairman Richard Hyde confirmed WAF had aligned equity ownership in its three mining projects – Sanbrado (Somisa), Kiaka and Toega with the new code during July and August.
That involved increasing the government’s free carried equity interest in each of the mines to 15% from 10% and dropping WAF’s equity stake to 85% from 90%.
According to Hyde, “this 5% equity transfer to the State for nil proceeds has been recorded in the consolidated statement of changes in equity as an A$33.4m decrease in retained profits and a matching increase in the non-controlling interest in the half year.”
Hyde said that, “post period end – in August 2025 – Somisa declared a priority dividend in favour of the State for an amount equivalent to $98,3m which represents 15% of Somisa’s retained earnings up to December 31, 2024 as measured by OHADA (organisation for the harmonisation of business law in Africa – a body that creates uniform business laws for its 17 member states in West and Central Africa) accounting principles.
“In communications with the State on the priority dividend for 2024 it became apparent that payment of an annual priority dividend to the State in compliance with the text of the mining code has become non-discretionary.
“The company expects that in future years each of Somisa, Kiaka SA and Toega Sa will pay the State a priority dividend on an annual basis calculated as 15% of their annual company profits and WAF’s 85% share of those profits will be paid and repatriated according to the remaining free cash flow.”
WAF sold 98,178oz of gold in the six months to end-June (previous comparable period – 101,954oz) and reported a taxed profit of $214.6m ($92.2m)
In June the company poured the first gold from the Kiaka mine ahead of schedule which Hyde described as “a major milestone” in WAF’sa ambition to produce more than 500,000oz annually by 2030.
