S&P/ASX 200 Index (ASX: XJO) gold stock West African Resources Ltd (ASX: WAF) enjoyed another day of strong outperformance on Wednesday.
Shares ended the day up 4.83% trading for $3.04 apiece, racing ahead of the 0.28% gains delivered by the ASX 200.
That kind of outperformance has been par for the course for West African shares, which have now surged 106.8% over 12 months.
Investors can thank the fast-rising gold price for some of those gains. With gold trading for US$3,382 per ounce on Wednesday, the yellow metal is up more than 35% in a year.
Atop those welcome tailwinds, West African Resources has also been scoring its own mining successes.
And with an eye on the year ahead, Macquarie Group Ltd (ASX: MQG) just reiterated its outperform rating on the ASX 200 gold stock.
Here's why.
ASX 200 gold stock tipped to keep shining bright
West African Resources released its first-half trading update (H1 2025) on Wednesday.
Commenting on those results, West African CEO Richard Hyde said:
WAF has delivered another outstanding half year result with a profit after tax of $215 million from revenue of $477 million and operating cash flow of $159 million.
Our unhedged resources now stand at 12.2 million ounces of gold and ore reserves at 6.5 million ounces of gold.
Over the six months, the ASX 200 gold stock produced 95,644 ounces of gold at an all-in sustaining cost (AISC) of US$1,374 per ounce.
Gold sales came in at 98,178 ounces at an average realised price of US$3,049 per ounce.
As at 30 June, the miner had a $279 million cash balance and $49 million of unsold gold bullion.
Macquarie labelled those first-half results "strong".
The broker noted that West African's underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) for the six months were 12% above consensus expectations.
And the ASX 200 gold stock's after tax profits really surprised to the upside, coming in 51% above consensus analyst expectations and 34% above Macquarie's own estimates.
Macquarie wasn't thrilled with the fact that West African will now align all of its gold projects (Sanbrado, Kiaka, and Toega) to the new Burkina Faso mining code, which involves an increase in the government free carried interest from 10% to 15%.
However, the broker added, "While not a positive, we do think it removes some uncertainty in the near term around government policy at a time when WAF is set to near-double production and boost FCF [free cash flow]."
Connecting the dots, Macquarie maintained its outperform rating on the ASX 200 gold stock, citing "a compelling deleveraging/FCF story from WAF's ramp-up of Kiaka over 2HCY25. From CY26-28 we forecast FCF yields of ~15%".
Macquarie has a 12-month price target of $3.40 on West African shares. That represents a potential upside of nearly 12% from Wednesday's closing price.
