Mali mine seizure deals $1 billion blow to world's second-largest gold producer
Barrick Mining Corp. reported a $1.04 billion charge related to the Malian military junta's seizure of the Loulo-Gounkoto gold complex.
Tensions with Malian authorities over alleged unpaid taxes have led to operational halts and employee detentions.
Despite challenges, Barrick shares rose 50% this year, driven by surging gold prices.
Barrick Mining Corp. shares fell after the Canadian miner booked a $1.04 billion charge tied to the seizure of its vast Loulo-Gounkoto gold complex by Mali's military junta.
The loss reflects the 'deconsolidation' of the operation following a change of control, the company said in its second-quarter earnings report Monday.
The hit to earnings was partly offset by a $745 million gain from the sale of its 50% stake in Alaska's Donlin Gold project, Bloomberg reported.
Barrick's Mali crisis
Since last year, Barrick Gold has been embroiled in a dispute with Malian authorities, who claim the company owes substantial unpaid taxes and profited from skewed contracts struck under previous governments.
Tensions spiked in December when a Malian court issued an arrest warrant for Chief Executive Officer Mark Bristow, prompting Barrick to propose a $370 million settlement.
The dispute has already led to the detention of four employees, a halt on gold exports, and the January shutdown of the Loulo-Gounkoto mine.
In July, Malian military helicopters made an unannounced landing at the site and seized more than a metric ton of gold, according to the company.
The standoff has kept the world's No. 2 gold producer from fully capitalising on bullion's record rally.
Optimism on Mali resolution
Still, Chief Executive Officer Mark Bristow said talks with Malian authorities are ongoing, and that the charge reflects an accounting adjustment rather than a drop in asset value.
Despite the Mali setback, Barrick shares remain up about 50% this year, fueled by a gold rally that pushed prices to a record $3,500 an ounce in April.
Bristow said the company still sees scope for a resolution in Mali. 'All the time we're engaged, there's a prospect of finding resolutions,' he said, adding that any arbitration and potential damages would only be pursued if talks fail. On current activity at the site, he said: 'It's a bit murky at the moment on whether gold is being produced and sold.'
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