Monday, April 18, 2011

Burkina Faso, Popular Gold Exploration Ground, Faces Revolt

There's some concern over an army revolt in the country of Burkina Faso, a country that has licensed exploration territories to several gold exploration companies and two producers with mines in the country. SEMAFO and IAMGOLD have one mine each there.
An army revolt is underway in Burkina Faso, the latest of multiple rounds of unrest in the West African country. As the army protests over unpaid housing allowances, others are complaining about high food prices. To try and quell the revolt, President Blaise Compaore replaced the army chief....

For now, these companies appear unaffected; SEMAFO said so itself on Monday. But Mr. Rollins noted that “many investors appear to be in no mood to tolerate political risk.”

Despite the risk differential, SEMAFO is actually up in the first hour of trading; it's IAMGOLD that sunk. Evidently, the former company's reassurance that they're having no trouble with their Mana mine was believed. More than a third of SEMAFO's value is tied up in the Mana.

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