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Burkina Faso’s president has declared a state of emergency and dissolved the government in the country in the face of violent protests demanding his resignation. As the country is Africa’s fourth-largest gold producer, miners with gold projects in the region are no doubt watching the news unfold.
Update: Roxgold and True Gold Mining have released statements regarding the recent events in Burkina Faso. Read about what the companies had to say here and here.
Burkina Faso’s president has declared a state of emergency in the country in the face of violent protests demanding his resignation, according to the BBC.
President Blaise Compaore has been in power in the country for 27 years, but protesters have now taken to the streets to make their voices heard against proposed constitutional changes that would allow him to seek re-election. The groups set fire to parliament, city hall and the homes of several MPs in the capital, while similar protests broke out in other towns across the country. The military opened fire on protesters in Ouagadougou, and the BBC notes that at least one person has been killed.
According to The Guardian, protests in the West African nation could be linked to a wider trend of revolution and unrest, with some dubbing the movement Burkina Faso’s “revolution 2.0.”
Mining companies feel the pressure
Burkina Faso is Africa’s fourth-largest gold producer, and alongside Thursday’s civil unrest, companies with mining projects in the country saw a dip in share price — True Gold Mining (TSXV:TGM) fell just under 8 percent while Roxgold (TSXV:ROG) dropped 15 percent.
Although shares of True Gold and Roxgold declined in tandem with the protests, Roxgold is still up 30 percent year-to-date. It’s also worth noting that both companies’ properties are over 100 kilometers away from the epicenter of protests in the country’s capital.
Roxgold’s Yaramoko property is located 200 kilometers southwest of Ouagadougou, while True Gold’s Karma project is located 185 kilometers northwest of the capital city. Feasibility studies have been completed for both projects, and the Karma mine is currently under construction.
As Reuters notes, other mining companies, such as IAMGOLD (TSX:IMG) and Randgold Resources (NASDAQ:GOLD), also have projects in Burkina Faso. Randgold and IAMGOLD also saw their share prices dip by 5 percent and 12 percent respectively on Thursday.
While it isn’t necessarily pleasant, investors should take times like this to remember the importance of safe jurisdictions. Burkina Faso might have a mining code that has been in place for well over a decade, but the current unrest could potentially change the landscape in which mining companies are operating.
Certainly, investors in companies with assets in Burkina Faso will be watching closely to see how events unfold.
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.