Barrick shares drop after $1.04bn hit from Mali mine seizure

WEB DESK: Barrick Mining Corp.’s shares slipped on Monday after the Toronto-based gold producer booked a net charge of $1.04 billion linked to the seizure of its Loulo-Gounkoto gold complex in Mali by the country’s military junta.

In its second-quarter earnings report, the company said the loss stemmed from “the deconsolidation of Loulo-Gounkoto following the change of control.” That blow was partially cushioned by a $745 million gain from selling its 50 percent stake in the Donlin Gold project in Alaska.

The situation in Mali has been worsening for Barrick since June, when a local court handed control of one of its largest mines to a state-appointed accountant and former health minister for six months. The dispute over mining revenues has already led to the detention of four Barrick employees and a halt to gold exports from the mine, which has been shut since January.

The standoff has kept the world’s second-largest gold miner from fully benefiting from the recent record-breaking surge in bullion prices. Despite this, chief executive Mark Bristow said the company remains in talks with Mali’s authorities and that the charge reflects an accounting adjustment rather than a loss of value.

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“It’s got nothing to do with our belief of whether it’s worth more or less,” Bristow told reporters. “Our job is to find a way forward so we can get that project running again.”

Mali mine dispute risks overshadowing Barrick’s strong year, analysts warn

Bloomberg Intelligence analysts Grant Sporre and Emmanuel Munjeri noted that the write-down highlights the difficulty Barrick faces in regaining control of the mine. They warned it could overshadow the miner’s progress at other operations, strong cash flow, and the announcement of a 5-cent performance dividend.

By mid-morning trading in New York, Barrick shares were down 3.2 percent at $22.67. Even so, the stock remains up about 50 percent this year, riding the wave of a gold price rally that pushed the metal to a record $3,500 an ounce in April. The VanEck Gold Miners ETF has surged roughly 70 percent over the same period.

Bristow said the company still sees a path to resolving the dispute in Mali. “As long as we’re talking, there’s a chance for an agreement,” he said. Arbitration over potential damages would only be pursued if negotiations fail, he added.