Barrick Mining Corp.’s shares dropped after the Canadian gold producer reported a $1.04 billion charge linked to Mali’s military junta taking control of its massive Loulo-Gounkoto gold complex.
The company said in its second-quarter earnings report on Monday that the loss reflects the “deconsolidation” of the operation due to the change in control.
The impact on earnings was partly cushioned by a $745 million gain from selling its 50% interest in Alaska’s Donlin Gold project, according to Bloomberg.
Barrick has been locked in a dispute with Malian authorities since last year, with officials alleging the miner owes large unpaid taxes and benefited from unfair contracts made under past governments.
Tensions escalated in December when a Malian court issued an arrest warrant for CEO Mark Bristow, prompting the company to propose a $370 million settlement.
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The ongoing conflict has already seen four employees detained, gold exports suspended, and the Loulo-Gounkoto mine shut down in January.
In July, the company said Malian military helicopters unexpectedly landed at the mine and seized over a metric ton of gold.
The situation has prevented Barrick from fully benefiting from record-high bullion prices.
Despite the setback, Bristow said discussions with Malian authorities are continuing and stressed that the $1.04 billion charge was an accounting measure, not a reduction in the mine’s actual value.
Barrick shares are still up about 50% this year, helped by gold prices hitting a record $3,500 an ounce in April.
“There’s a prospect of finding resolutions,” Bristow said. “All the time we’re engaged, there’s a prospect of finding resolutions,” adding that arbitration and potential damages would only be pursued if negotiations fail.
On whether the mine is still producing and selling gold, he noted: “It’s a bit murky at the moment on whether gold is being produced and sold.”
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Image Credit: MSN
