The gold sector is booming on Thursday with strong gains largely across the board.
For example, Evolution Mining Ltd (ASX: EVN) and Newmont Corporation (ASX: NEM) shares are both up over 3% at the time of writing. This has helped drive the S&P/ASX All Ordinaries Gold index 2% higher during morning trade.
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Why are these ASX gold share racing higher?
Investors have been buying gold miners today after the spot gold price raced higher overnight.
According to CNBC, the gold price rose 1.3% to US$2,364.2 an ounce in response to softer than expected economic data out of the United States.
This has boosted hopes of interest rate cuts in the United States in the near future, which would increase the appeal of gold with investors.
Not all gold stocks are rising
One ASX gold share that is crashing today despite this good news is West African Resources Ltd (ASX: WAF). Its shares are down 13% to $1.38 at the time of writing.
This is because this morning, the Africa-focused gold miner announced that it has received firm commitments from institutional and sophisticated investors for a placement.
West African Resources is raising approximately $150 million through the issue of 109.5 million new shares at a discount of $1.37 per new share.
Management notes that there was strong support from both domestic and offshore institutions for the placement, which will support development activities at the Kiaka Gold Project.
The Kiaka Gold Project is expected to be a long-life, low-cost project averaging 234,000 ounces per annum for 20 years with an all-in sustaining cost of US$1,196 per ounce.
With an estimated pre-production capital cost of US$447 million, combined with existing cash at bank and unsold bullion, West African Resources believes that it now has sufficient financial flexibility to fund project construction and ramp-up, supporting the pathway to commencement of gold production. This is expected in third quarter of 2025.
The ASX gold share's executive chairman and CEO, Richard Hyde, commented:
West African continues to make significant progress towards development of the Kiaka Gold Project with development 50% complete and 75% of capital costs fixed. Proceeds from the placement are expected to provide West African with proforma cash at bank and unsold bullion proceeds of A$604m, 5 positioning West African to continue to rapidly progress the development of the Kiaka Gold Project. West African is currently on schedule to be a +420,000 ozpa gold producer from 2025.
