ABIDJAN/ACCRA This year's drop in world gold prices has been deeply sobering for West African countries, from established producer Ghana to promising newcomer Ivory Coast, whose prospects of mineral wealth are being snatched away.
As miners' stock prices plummet and they have to consider suspending or halting new projects, many fear the dream that inspired West Africa's gold rush may be gone for good and regional economies may be in for an abrupt awakening.
Just a year ago, there was reason to believe in the golden future of a region that had long been handicapped by challenging terrain, underdeveloped infrastructure and political risk.
Economic uncertainty was fuelling demand for gold and traditional producers were struggling to keep up.
Until July, South Africa - Africa's largest gold producer and the world's number five exporter - had seen output decline for 27 consecutive months.
West Africa appeared destined take up some of the slack. From 6.7 million ounces - around 8 percent of the global supply - in 2012, output was expected to rise to 11 million ounces by 2015, mostly from production in the region's top exporter Ghana.
Investors pumped money into companies - many of them junior miners vulnerable even at high gold prices - that had a toehold in the region.
"The mining industry was in a state of over-exuberance before the correction," Randgold Resources (RRS.L) CEO Mark Bristow told Reuters. "In my mind, it wasn't sustainable ... There has been a lot of mining development that hasn't given value to shareholders or the host governments."
Though gold prices had steadily risen, so too had the industry-wide costs of mining lower and lower ore grades. In West Africa, added factors like high energy prices further inflated costs.
Gold prices rallied from around $250 an ounce in 2001 to a record $1,920.30 an ounce a decade later but are set to snap 12 years of gains in 2013 after falling by more than a fifth in the year to date.
When the bubble burst, miners large and small were hit hard.
Africa's biggest gold producer, AngloGold Ashanti ANG.J said in August its cost structure in Ghana was unsustainable and it would make cutbacks. It suspended excavation last month at the Yatela Mine in Mali, which it owns with Canadian mid-tier miner IAMGOLD (IMG.TO).
Canada's Kinross Gold Corp (K.TO) recorded a net loss in the fourth quarter of 2012 due to two mines in Mauritania and Ghana. It now plans to cut 300 jobs and has frozen expansion in Mauritania until at least 2015.
Endeavour Mining (EDV.TO), which has three gold mines producing more than 300,000 ounces per year in Mali, Ghana and Burkina Faso, has also planned cuts.
"There's no way around it but to suck it in and hold your breath," Neil Woodyer, the company's CEO, told Reuters.
While miners already in production may be able to survive by tightening their belts and praying prices don't fall further, the scores of juniors who bet on West Africa in the past few years won't get off so easily.
Nearly 12 percent of all new gold discoveries over the last two decades have been in West Africa, a fact that has helped small miners raise exploration funds in Toronto, Sydney and London's junior AIM market.
Nowhere was this more true than in Ivory Coast, which had long neglected mining in favor of agricultural commodities like cocoa and has only three producing mines. Its untapped gold potential fuelled a wave of interest after the end of a decade-long political crisis in 2011.
But with gold stocks losing on average 40-50 percent of their value since January, financing has dried up and work under Ivory Coast's 81 exploration permits has slowed to a trickle.
"There are very few that are now active. I don't know if it is even 10 percent," said Nouho Kone, president of the Professional Grouping of Ivory Coast Miners.
"Most projects are so little advanced that practically nothing is proven. They're so far from being able to estimate their reserves that the risks for investors are big."
Exploration is in a similar holding pattern across the region.
With the U.S. Federal Reserve expected to roll back its quantitative easing program, many analysts believe gold prices may fall further as investors switch to assets offering better returns.
For mining-dependent regional economies, the consequences could be dire.
Although Ghana's current economic boom is often chalked up to its new oil wealth, its gold exports were worth $5.6 billion last year, nearly as much as oil and cocoa combined.
Gold contributed 27 percent of the country's foreign exchange and furnished more than $700 million to government coffers, according to data from Ghana Chamber of Mines (GCM).
"We are not going to repeat that feat this year. Payment to the GRA (Ghana Revenue Authority) is going to shrink," said Toni Aubynn, GCM chief executive.
The impact on Africa's third biggest producer Mali, where gold accounts for 75 percent of export receipts and 25 percent of GDP, is potentially even worse. Just two mines, Sadiola and Morila, historically accounted for 80 percent of Mali's output.
Global interest in Africa's economic boom is rising but critics argue growth relies too heavily on natural resources, leaving it vulnerable to price fluctuations. Anyone looking at West Africa's gold industry might share those concerns.
(Editing by Anthony Barker)