The Canadian company will regain operational control over the Loulo-Gounkoto complex and withdraw its arbitration claims against the West African country. — Bloomberg
TORONTO: Barrick Mining Corp struck a deal with Mali’s government to end a two-year dispute that shuttered one of the company’s most important gold mining operations. Its stock jumped to a 13-year high.
The Canadian company will regain operational control over the Loulo-Gounkoto complex and withdraw its arbitration claims against the West African country, Barrick said in a statement.
Mali, in turn, will drop its charges against Barrick and take legal steps to release four employees jailed during the dispute with the government.
Barrick will also accept Mali’s 2023 mining code, which it had previously resisted, and pay a settlement, according to people familiar with the matter.
The permit for the Loulo gold mine, which was set to expire in February, will be renewed for another decade, said the people, who asked not to be named citing private discussions.
The company declined to comment further on the agreement, or whether it included a settlement.
Mali expects to receive about US$159mil in dividends annually, plus royalties and stakes as per the 2023 code under the new agreement with Barrick, Finance Minister Alousseni Sanou said in a late Monday interview with Mali’s public broadcaster ORTM.
Shares of Barrick rose 8.2% to US$39.54 on Monday as of the market close in New York, the highest since October 2012.
The agreement marked the end of a protracted fight that weighed on Barrick for about two years.
It started when the company refused to adopt a revised mining code that Mali introduced in 2023 to increase royalties and raise the state’s ownership stake in gold mines.
In retaliation, Mali demanded alleged back taxes, detained Barrick employees and issued an arrest warrant for then-chief executive officer Mark Bristow.
The government also seized several tonnes of gold and, ultimately, took over operations of Barrick’s mines.
Loulo-Gounkoto, one of Barrick’s most important assets, produced 20,500kg gold last year, about 18% of the company’s annual output of the precious metal.
The dispute hurt Barrick’s stock, keeping the firm from fully capitalising on bullion’s record-breaking rally this year.
The complex “could restart operations by the end of the year”, Barrick’s West Africa director, Mamadou Samake, told the Malian public broadcaster on Monday.
The agreement “could strengthen portfolio quality perceptions and investor confidence, key to narrowing Barrick’s valuation gap with peers”, Bloomberg Intelligence analyst Grant Sporre said in a note on Monday.
The agreement followed a Bloomberg News report last Friday that a deal between the company and country was imminent.
A spokesman for Mali’s Mining Ministry said he didn’t yet have details of the agreement, but described it as a deal that “puts the crisis behind us” following the release of the detained Barrick employees.
Barrick has sought to refocus its business on its North American operations following the Mali dispute and Bristow’s abrupt departure in September.
Under Bristow, Barrick positioned itself as an international miner that could operate gold and copper assets just about anywhere, but the firm struggled to meet expectations.
Interim chief executive officer Mark Hill said earlier this month he wanted to focus his efforts on Barrick’s Nevada gold mines and the giant Pueblo Viejo operation in the Dominican Republic.
The company studied the possibility of breaking up the company, including establishing it into two firms that would separate the North American operations from the rest of its global assets. — Bloomberg
