Loulo-Gounkoto gold mining complex. Credit: Barrick
Barrick Mining (NYSE: B; TSX: ABX) says it has reached an agreement with Mali’s government to end their dispute, removing uncertainty surrounding the operation of its Loulo-Gounkoto complex in the African nation. Its stock surged.
In a press release Monday, the Toronto-based gold miner confirmed that the Malian state has dropped all charges against the company and its affiliates and will return operational control of Loulo-Gounkoto to Barrick. The Mali government will also arrange for the release of four Barrick employees that have been detained for a year.
In exchange, Barrick said it will withdraw its arbitration case against Mali, which it brought to the World Bank dispute tribunal in December after Mali’s junta-led government blocked gold shipments from the Loulo-Gounkoto site.
The announcement follows an earlier report by Reuters that the two sides had reached a verbal agreement to resolve their issues.
The agreement officially ends a protracted two-year fight over one of Africa’s largest mining assets. Last year, Loulo-Gounkoto produced 723,000 oz. of gold, ranking it amongst the top 10 producers globally. Ownership of the mine complex is held 80% by Barrick, with Mali retaining 20%.
Analysts at Jefferies said the mine restart and ramp-up could take around six to 12 months.
Shares of Barrick soared to a new 52-week high of $39.02 in New York after announcing the dispute resolution. By noon ET, it traded at $38.76 apiece with a market capitalization of nearly $62 billion. Year to date, the stock has gained over 143%, outperforming that of rivals Newmont (NYSE: NEM; TSX: TGT) and Agnico Eagle Mines (NYSE, TSX: AEM).
The dispute dates back to 2023 when Mali imposed a new mining code and demanded millions from Barrick in economic benefits and taxes. The situation escalated earlier this year when the Malian state seized Barrick’s gold, forcing it to suspend operations, and later placed it under provisional administration.
Amid the Malian dispute, Barrick had to write off $1 billion in revenue from the Malian operation and experience a significant leadership change with the departure of former CEO Mark Bristow, who played an instrumental role in the development of Loulo-Gounkoto.