SMF Stock Drops Following Attack on Convoy in Burkina Faso

SMF stock

SMF stock is sinking on Thursday after dozens were killed in an attack on a convoy carrying employees of Canadian gold miner Semafo Inc (TSX:SMF) (OTCPK:SEMFF) in Burkina Faso.

Increasing Security Fears in Burkina Faso

37 people were killed and more than 60 injured when the five bus convoy, which was carrying employees to the Boungou gold mine operated by the Montreal-based mining firm, was attacked in the eastern region of the African nation. While there is no reports of any Canadian citizens being involved in the attack, it highlights a worrying trend of increasing violence in the country, which is facing issues with groups affiliated to al-Qaeda. SMF shares have dropped 20% following the attack.

The attack happened approximately 40 kilometers from the Boungo mine, one of two that the company operates in the country, when the military escort accompanying the convoy was struck by an explosive device. The rest of the convoy was then shot at by “unidentified armed individuals,” according to a statement signed by the governor of the eastern region, Col. Saidou Sanou.

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SMF Stock Sinks Following Third Attack

Semafo was quick to release a statement saying that the mine “remains safe and our operations have not been affected,” but the movement in SMF stock today clearly shows that investors are worried about the future of operations in Burkina Faso. The attack is the third such instance of violence against the company in the country after an employee and subcontractor were killed in another convoy attack back in August 2018, while five others died in another attack in December.

SMF shares dropped nearly 40% in the second half of 2018 following those attacks but had recovered to a peak of $4.32 in August. Those gains have since been slashed in the aftermath of Wednesday’s attack. The Boungou mine has since been suspended, with all employees being transported to Burkina Faso’s capital Ouagadougou via helicopter.

SMF stock is currently trading at $2.51.

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Featured Image: DepositPhotos © alistairjcotton

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