West African Resources Ltd (ASX: WAF) shares are having a shocker on Tuesday.
In morning trade, the ASX 200 gold stock is down 15% to 79.5 cents.
Why is the ASX 200 gold stock crashing?
Investors have been selling West African shares today after it released its guidance for 2024.
As you might have guessed from the share price weakness, this guidance has disappointed the market.
According to the release, the company expects to produce 190,000 to 210,000 ounces of gold this year. This will be down from 226,823 ounces in 2023.
Management advised that this is due to reduced ounces from open pit mining partially offset by more ounces from underground.
Also heading in the wrong direction are the ASX 200 gold stock's costs. It is guiding to adjusted operating costs of under US$1,050 an ounce and an all-in sustaining cost of under US$1,300 an ounce.
As a comparison, it reported US$927 an ounce and US$1,126 an ounce, respectively, for FY 2023.
In respect to its all-in sustaining cost, management advised that this increase is primarily due to lower forecast gold production, higher Burkina Faso gold royalty rates, and higher forecast fuel prices.
Nevertheless, the ASX 200 gold stock's executive chairman and CEO, Richard Hyde, remains positive on the future. He commented:
Sanbrado is expected to continue performing in line with our long term mining plan in 2024 with unhedged production guidance of 190,000 to 210,000 ounces of gold at an AISC of less than US$1,300 per ounce. Site construction activity at Kiaka will see a major ramp up in 2024 with an expected growth capital investment of US$230 to US$270 million primarily allocated to Kiaka. The project remains on schedule and on budget with first gold expected in the second half of 2025. We look forward to releasing our updated Resources, Reserves and 10-year production plan in the coming weeks.
