Africa has turned out to be a happy hunting ground for ASX-listed gold producers in recent years, with some of the companies starting to build some real scale.
The team at Macquarie has had a look at the sector and singled out four companies they believe could deliver outsized share price gains.
They are also speculating that the conditions are right for elevated returns of capital and potentially M&A to extend the operating life of some of the assets.
Let's see which companies they like.
Perseus Mining Ltd (ASX: PRU)
The Macquarie team said they see earnings for Perseus "hockeysticking beyond FY27", while cash would build to about US$1 billion in FY26.
They added, "Perseus may become more active in developing/ acquiring ounces to sustain Sissingué beyond 2030'', given its large cash haul.
Macquarie is expecting Perseus' production to grow a compound 5% per year over the next three years, "driven by Nyanzaga entering production in 1QCY27 offsetting declining production at existing operations''.
They said the company has brownfield and greenfield expansion options, "which would seek to extend the mine-lives of Yaouré, Sissingue and Edikan, adding upside risk to our longer-term outlook''.
They added:
Additionally, given PRU's balance sheet strength, and recent appetite for M&A targeted growth, we would not rule out a hub-and-spoke style model within Cote d'Ivoire, which would aim to maintain throughput across its existing mill infrastructure.
Macquarie has a price target of $6 on Perseus shares compared to $4.90 currently.
Resolute Mining Ltd (ASX: RSG)
Macquarie said Resolute has some issues to contend with, including instability in Mali, which had already affected the delivery of equipment and consumables.
While the company lowered its second-quarter production outlook, it reiterated CY26 guidance of 195,000 to 210,000 ounces of gold for the calendar year.
Macquarie added:
With the development of Doropo (first production 2HCY28), RSG's reliance on Syama from an earnings perspective decreases, which should help to provide stability to production and earnings going forward.
Macquarie has a price target of $1.55 on Resolute shares compared to 95 cents currently.
West African Resources Ltd (ASX: WAF)
Macquarie said West African Resources shares were trading "materially below its 5-year historical multiple of 3.9x" EBITDA.
The analyst team added:
Despite production and costs that beat consensus expectations in the 1QCY26 result, we believe the market is hesitant given the recent developments in Burkina Faso. We anticipate this to dominate sentiment in the near-term. In 1QCY26, WAF released a 10-year production outlook, which highlighted a +500kozpa from ~CY27 onwards.
Macquarie has a $4 price target on West African shares compared to $2.69 currently.
Turaco Gold Ltd (ASX: TCG)
Turaco recently released a prefeasibility study for its Afema project in southeast Côte d'Ivoire, setting out the case for a mine producing more than 200,000 ounces of gold per year.
In terms of the mine's revenue generation, the company published figures for a range of gold prices, but at US$4,000 per ounce – close to the current spot price of US$3971.22 – the mine would generate gross revenue of US$8.095 billion over its life of 10.3 years.
The project would also have a payback period of 10 months, or 17 months if the gold price were US$3,000 per ounce.
Macquarie said the study detailed a larger throughput than they had modelled.
They added:
We anticipate as the business progresses through definitive feasibility study and additional permitting, ramp-up and steady-state production, its valuation will expand in line with peers like Perseus, which trades on a current multiple of A$802/oz.
Macquarie has a price target on Turaco shares of $1 per share compared to 45 cents currently.
The post 4 Africa-focused ASX gold stocks Macquarie says could outperform appeared first on The Motley Fool Australia.
Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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