Barrick considers Mali care and maintenance

Barrick Gold (NYSE:GOLD; TSX:ABX) is considering care and maintenance for its suspended Loulo-Gounkoto mine in Mali where the junta seized its gold stockpiles and still holds four employees, according to CEO Mark Bristow. 

“We are actively engaged with the administration to secure their release on a sustainable solution moving forward so that we can restart the mine,” Bristow told an earnings conference call on Wednesday. “This situation has led us to file for exit arbitration to assert our rights, but at the same time, as usual, we remain engaged and are hoping to continue to make progress, albeit slowly.” 

Bristow said a “difficult” decision would come within a month on whether to put the operation on care and maintenance, likely at a cost of around $10 million (C$14.3 million) per month, if talks collapse.  

The Toronto-based miner is alone among gold producers in the West African country, such as Resolute Mining (ASX, LSE: RSG), B2Gold (TSX: BTO; NYSE-A: BTG) and Allied Gold (TSX: AAUC), for not having made an agreement with Mail after it imposed a new mining code in 2023 with higher taxes and state stakes. Barrick has paid $84 million, but the regime has $245 million of the company’s gold and wants a further $200-million payment, according to Reuters.   

Mine life  

The CEO said meeting the government’s demands would shorten the mine’s life. The mine is excluded for the time being from company guidance, returning in forecasts from 2027, he said.  

“It would not be a good thing to lose Loulo, not for anyone’s sake, and particularly not for Mali’s,” the CEO said.  

“But equally for us, we are longstanding partners in Mali. Every one of our operations are independently viable, and Barrick’s balance sheet is very solid and so with or without, Loulo will not change our long-term plan, our five-year plan.”  

Shares in Barrick Gold shot up 6.4% on Wednesday in Toronto to close at $25.97 apiece after the company beat fourth-quarter estimates and said it would double its share buy-back program to $1 billion. The company’s market capitalization is $44.9 billion.  

Beats estimates 

Barrick reported a strong performance in the fourth quarter with gold production rising 15% and copper production increasing 33% over the previous three months, allowing the company to meet its annual production guidance. 

The miner stated that its North America and Africa & Middle East operations met their production targets for the year. However, in the Latin America and Asia Pacific region, a slower-than-expected ramp-up at Pueblo Viejo resulted in output falling below guidance. 

“We are targeting 30% growth on a gold-equivalent oz. basis towards the end of the decade, built on our current reserves,” Bristow said. “We will continue to replace and add to those reserves and resources for further supporting our growth. What’s more, we have the balance sheet strength to fund our growth.” 

For 2025, attributable gold production is expected to range between 3.15 million and 3.5 million oz., excluding output from Loulo-Gounkoto while operations remain suspended. Attributable copper production for 2025 is projected to increase from 195,000 tonnes in 2024 to between 200,000 and 230,000 tonnes, driven by higher output at Lumwana in Zambia. 

On an adjusted basis, the gold miner reported a profit of 46¢ per share for the quarter ending Dec. 31, surpassing the 41¢ per share estimate compiled by London Stock Exchange Group. 

The company announced plans for a new $1-billion share repurchase program over the next 12 months. Under its 2024 program, Barrick repurchased $498 million worth of common shares. 

Turnarounds 

On Mali, Barrick applied to the International Centre for Settlement of Investment Disputes in December for arbitration. The miner halted operations at Loulo-Gounkoto in January after authorities raided its gold stockpile. 

Bristow mentioned how he’s transformed several operations, including the $7-billion Reko Diq copper development in Pakistan that now allocates half of its earnings to federal and local governments. He resolved a dispute over the Porgera gold mine in Papua New Guinea and advanced the company’s holdings in Tanzania which were under lawsuits when Barrick acquired them. 

The CEO said Mali is being advised by former Barrick employees and he suggested a stance to increase royalties indiscriminately would be detrimental. Third-party independent experts would be welcomed to the negotiating table for a clear presentation of the business, he said.   

“We are absolutely clear that if we get down to have an honest, open conversation with people that are giving sound advice and are not conflicted or motivated by the things than just getting what’s good for Mali, we’ll find a solution and that engagement is ongoing.” 

With files from Mining.com