Macquarie forecasts 40% upside for this ASX mining stock

Ready to rock.

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Gold prices have been rocketing so far in 2025, rising by about 25% since January to trade near record highs of around US$3,280 per ounce.

It has also been a glittering ride for investors in many ASX 200 gold stocks.

For instance, take the world's largest gold miner, Newmont Corporation CDI (ASX: NEM).

The mining powerhouse has seen its share price fly by 63% during this time to yesterday's closing price of $98.30 per share.

And Evolution Mining Ltd (ASX: EVN) shares have bolted by around 51% since the year commenced.

For context, the All Ordinaries Index (ASX: XAO) is up by about 6.5% over this period.

But there could be another less heralded ASX mining stock poised to rocket.

And its game is gold.

African gold miner

West African Resources Ltd (ASX: WAF) is somewhat unique in the gold mining space.

As the name suggests, the group is exclusively focused on mining in the West African nation of Burkina Faso, where it operates two long-life and low-cost gold mining centres.

Firstly, its flagship Sanbrado mine dished out more than 95,000 ounces of gold in the first half of 2025, as revealed in the company's quarterly update this week.

The mine remains on track to deliver up to 210,000 ounces of the precious metal for the full calendar year.

Secondly, West African Resources has just poured first gold from its newest mine, Kiaka.

Kiaka is forecast to produce around 230,000 ounces of gold each year over a two-decade mine life.

In addition, the company also owns the Toega gold development project in Burkina Faso.

Overall, West African Resources has set a hefty target of 500,000 ounces of annual gold output from its projects by the end of the decade.

And leading Aussie investment firm Macquarie Group Ltd (ASX: MQG) appears to see plenty of upside potential for the company's shares.

Poised to surge?

Macquarie has placed an overperform rating on West African Resources following the company's quarterly activates update released on Wednesday.

However, it noted that production from Sanbrado during the quarter was 6% below consensus estimates.

And the mine's production costs – known as AISC – of US$1,492 per ounce clocked in 23% above Macquarie's projections.

Net debt was also softer than expected due to a higher spend for bringing Kiaka to life.

The broker added that Kiaka's ramp-up remains dependent on achieving a grid power connection, which is expected to occur in the third quarter of 2025.

Nevertheless, Macquarie remains confident that the project is progressing in line with expectations.

It pointed to the company's overall production guidance for 2025 as a key driver of its positive outlook, combined with an attractive valuation.

Macquarie has now set a 12-month price target of $3.30 per share for West African Resources.

This implies an upside potential of 40% from $2.36 per share at the time of writing.

Motley Fool contributor Bart Bogacz has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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