Barrick Mining Corp. ABX-T has resolved a long-standing dispute with the government of Mali that had idled one of its biggest operations, as uncertainty swirls over the longer-term future of the big Canadian gold miner.
Toronto-based Barrick on Monday said in a release that it had resolved its differences with Mali, and that control of the Loulo-Gounkoto mining complex will be handed back to Barrick.
Canada’s second-biggest gold miner in turn is withdrawing its arbitration claims against Mali with the International Centre for Settlement of Investment Disputes (ICSID).
Barrick last December launched arbitration proceedings and in January was forced to shut down the mine. The company lost control of the asset entirely in June when a Malian court handed administration of the mine over to the government.
Loulo-Gounkoto used to account for around 15 per cent of Barrick’s production. An eventual restart and ramp up of the mine could take six to 12 months, Jefferies analyst Fahad Tariq said in a note to clients on Monday.
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Barrick shares jumped by 8.5 per cent on the Toronto Stock Exchange on Monday following news of the pact with Mali, to close at $55.93 apiece.
No economic terms of the agreement were released on Monday, but Mali is expected to gain a bigger stake in Loulo-Gounkoto. It currently owns 20 per cent, with Barrick owning 80 per cent. The West African country in 2023 brought in a new mining code that decreed it was entitled to a 35-per-cent stake in mining projects.
In addition, Barrick could end up having to repay the government for alleged non-payment of back taxes, Mr. Tariq said in his note. Mali previously demanded more than US$400-million from Barrick for allegedly not paying its fair share of taxes, a claim the company refuted.
Barrick has been in flux since the early fall when it shocked the market by abruptly cutting ties with chief executive officer Mark Bristow. Mismanagement of the dispute with Mali was one factor in his ouster, alongside years of tension with Barrick chairman John Thornton, The Globe and Mail has previously reported.
Activist investor Elliott Investment Management LP recently amassed a $1-billion stake in Barrick and is pushing for big changes, including a split of the company that would separate its North American mines from the other parts of its business perceived as much riskier, such as its African gold mines, its giant new Pakistani project, and its copper mines in the Middle East and Africa.
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But John Ing, a veteran gold analyst with Maison Placements in Toronto, said in an interview that there isn’t much evidence that Barrick’s chairman actually wants to proceed with a breakup of the company along those lines.
“I know what he wants. He thinks Barrick has excellent assets,” Mr. Ing said of Mr. Thornton.
He also questioned the logic behind breaking up Barrick and potentially selling some of its biggest assets at a discount when the gold price is near a record-high.
“I know the investment banks would like that because that means a lot of work but to me, gold mining is producing ounces at a profit, even in the geographically-risky areas,” Mr. Ing said.
He pointed to the roughly 30 million ounces of gold the Reko Diq project in Pakistan could bring to Barrick over the course of its mine life, as well as the Lumwana operation in Zambia, which he calls a “cash machine.”
“These are long-life mines, and to carve them out in a bull market at the whims of Wall Street or Bay Street just doesn’t make sense,” Mr. Ing said.
The Loulo-Gounkoto mining complex in Mali was brought into the Barrick portfolio after the purchase of Randgold Resources Ltd. in 2019. Randgold was founded by Mr. Bristow in 1995.
Relations between Barrick and the military leadership in Mali deteriorated rapidly in 2024, when the Canadian miner under Mr. Bristow resisted the country’s push to grab a bigger share of the profits of the mine.
During negotiations with the government, Mr. Bristow occasionally made insulting comments toward the Mali delegation, accusing its representees of being unsophisticated. His pugnacious approach appeared to have backfired when Mali imprisoned four Barrick employees late last year and issued an arrest warrant for Mr. Bristow himself.
On Monday, Barrick said that all charges against the company and its employees will be dropped and “legal steps for the release of the four detained Barrick employees will be undertaken.”