Since 2025, gold prices have delivered an impressive performance, surging 25% since January and currently trading near an all-time high of $3,280 per ounce. This rally has also fueled strong gains in gold stocks listed on the Australian Securities Exchange (ASX). For instance, shares of Newmont Corporation (ASX: NEM), the world’s largest gold miner, have skyrocketed 63% year-to-date, while Evolution Mining Ltd (ASX: EVN) has climbed 51%. In contrast, the All Ordinaries Index (ASX: XAO) has risen only about 6.5% over the same period.
Among the many mining stocks, West African Resources Ltd (ASX: WAF) may be an underappreciated gold stock with significant upside potential. The company focuses on gold mining operations in Burkina Faso, West Africa, and owns two low-cost, long-life gold projects. According to its latest quarterly report, its flagship Sanbrado mine produced over 95,000 ounces of gold in the first half of 2025, with full-year output expected to reach 210,000 ounces. Additionally, the company recently achieved first gold production from its newly developed Kiaka mine, which is projected to deliver an average annual output of 230,000 ounces over a 20-year mine life. Combined with the Toega gold project, also in Burkina Faso, West African Resources aims to achieve annual production of 500,000 ounces by 2026.
Despite its recent strong performance, Macquarie Group Ltd (ASX: MQG) believes the stock still has further upside. Following West African Resources’ quarterly update, Macquarie maintained its “Outperform” rating and set a 12-month price target of A$3.30 per share. Based on the current price of A$2.36, this implies a 40% potential upside. However, Macquarie noted that Sanbrado’s quarterly production was 6% below market expectations, and all-in sustaining costs (AISC) rose to $1,492 per ounce, 23% higher than Macquarie’s forecast. Additionally, due to increased capital expenditures for Kiaka’s ramp-up, the company’s net debt level has also risen.
Nevertheless, Macquarie remains optimistic about West African Resources’ outlook, citing attractive 2025 production guidance and current valuation. If gold prices remain elevated and the company successfully executes its expansion plans, West African Resources could emerge as a dark horse among ASX mining stocks, delivering substantial returns for investors.
