Barrenjoey has had a look at a couple of the ASX-listed, Africa-focused gold miners and has identified two companies its analyst team believes are deeply undervalued at current prices.
Let's have a look at who they like.
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West African Resources Ltd (ASX: WAF)
The Barrenjoey team has published a research note on this company with the title "Cash harvest in 2026", which gives some indication of how positive they are on the stock.
They note that after a "challenging" 2025, the company enters 2026 in a net cash position, "with its two key assets humming and on track to produce 475,000 ounces at an all in sustaining cost of US$1,991 per ounce on our estimates''.
The Barrenjoey team went on to say:
The shares have traded down 30% since January and are now imputing an almost unbelievable 43% free cash flow yield in 2026 with the potential to deliver a dividend yield exceeding 10%. Uncertainty around the government's request to purchase a stake in Kiaka remains unresolved, but the shares are now pricing in a scenario materially worse than the recently reported additional 25%. We expect the business will deliver $1.1bn in free cash flow this year, and will be in a strong position to make material capital returns to shareholders.
Barrenjoey says their price target is based on a "worst case scenario" regarding what stake in the Kiaka mine the Burkina Faso Government opts to take.
Barrenjoey has a $4.80 price target for West African Resources shares, compared with $2.89 currently.
If achieved, that would represent a return of 66.1%. West African Resources is valued at $3.46 billion.
Perseus Mining Ltd (ASX: PRU)
This company announced just this week that it had sold its 70% stake in the Meyas Sand Project in Sudan to a Chinese company for US$260 million, which Barrenjoey said was about 50% more than Perseus paid for it.
Barrenjoey said the transaction was a net positive, as it had the asset on the books as worth $118 million, "given the ongoing civil war in Sudan and uncertainty around Perseus's ability to develop it''.
The Barrenjoey analysts point out that Perseus shares are down 20% from their January peak, ''since which time management has announced the doubling of Reserves at Nyanzaga, realised value at Meyas Sand and positioned the company for improved capital returns in 2026''.
The Barrenjoey analysts added:
We view Perseus as the highest-quality ASX-listed African gold exposure, with its history of operational excellence and geographic diversification typically driving a healthy premium over its ASX listed African gold peers.
They said that the company should be in a position to "meaningfully" lift its full-year dividend following the Sudan sale.
Barrenjoey has increased its price target for Perseus from $6.50 to $6.80, compared with $4.80 currently.
