When it comes to commodities, especially those that aren't grown, finding new sources of supply is paramount if your company wants to stay in business. To that end, a variety of natural resource firms have gone to the ends of the earth to find new supplies. In the gold mining industry, that means heading towards Western Africa. Featuring dense reserves and high-grade gold ore, the region is quickly becoming a hotbed of activity. While it isn't without its risks, fortune does favor the bold. For investors, the West African gold rush could be a great way to play gold's demand, as well as its rising price.

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Key Engine of Supply Growth
The gold belt of northern Burkina Faso and other regions of West Africa, including Mali and Ghana, are quickly emerging as new favorite haunts for a variety of gold miners. As output in traditional mining regions like South Africa continues to fall, miners on the continent are on the move. Mining production in South Africa fell by 13% over the last year. In order to counteract this dwindling output, miners have moved towards the west.

The key for the region lies within its geology and topography. Stretching from Sierra Leone to Ghana, Western Africa sits atop the Paleoproterozoic Birmian formation. This sedimentary rock features an abundance of high-grade gold veins. The Birmian greenstone has yielded the majority of gold in West Africa. The average grade for West African gold deposits is around two grams per ton, and some newer discoveries in Burkina Faso are closer to three grams per ton. Analysts estimate that average land holdings in the region could hold as much as two million ounces of gold per mine. While that's still not as high of a grade as South Africa, West Africa does offer other big advantages. Government relations tend to be better, with lower taxes and royalties. Both Ghana and Mali are now among the top producers on the continent and Burkina Faso has seen its production skyrocket by 32% in 2011.

However, West Africa isn't without risks. Most recently, soldiers in Mali recently staged a military coup and overthrew President Amadou Toure's government. Likewise, the Ivory Coast has seen similar disruptions within its government. Niger features the constant threat of an al-Qaida offshoot insurgency, and Senegal recently saw deadly protests leading up to elections this year. However, the need to attract foreign capital to the region has produced a "calming effect," and things are beginning to become more peaceful.

SEE: How Much Disaster Can Gold Hedge?

Betting on the Gold Rush
With analysts at the Royal Bank of Canada (NYSE:RY) proclaiming that "West Africa, is the key engine of potential supply growth for the gold-mining industry," investors should consider adding exposure to the region. Broad-based measures like the Market Vectors Gold Miners ETF (ARCA:GDX) could be used, but some of the best opportunities lie within individual firms.

SEE: 5 Best Performing Gold ETFs.

Making a big bet on Burkina Faso is Canada's IAMGOLD (NYSE:IAG). The miner plans to invest a further $600 million over the next three years to expand its mine and double its processing capacity in the country. Already, the firm is earning a 16% rate of return on its operations in the area and produced about 340,000 ounces of gold last year.

Receiving nearly two-thirds of its production from Mali, Randgold Resources (Nasdaq:GOLD) saw its shares dip about 20% on the coup news. However, since that time, shares have rebounded, as military leaders have transferred power back to elected government. Randgold produced 445,600 ounces of gold in Mali in 2011 and could see that number climb, as the political situation has stabilized. In addition, a joint venture with AngloGold (NYSE:AU) is set to begin production.

Finally, Ghana's 15 years of political stability and vast mineral wealth is attracting a variety of miners. Majors like Gold Fields (NYSE:GFI) and Kinross Gold (NYSE:KGC), as well as a steady influx of juniors have all taken a shine to the nation's rich gold deposits. The nation is now Africa's second-largest producer of gold.

The Bottom Line
With gold supplies in traditional African regions beginning to dwindle, the West African gold rush is now on. The region features some very promising geology and is home to vast reserves for those companies willing to take on the political risks. For investors following suit, the rewards can be equally as great. The previous firms, along with Newmont Mining (NYSE:NEM), make ideal picks to play the rush.

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At the time of writing, Aaron Levitt did not own shares in any of the companies mentioned in this article.