Key Points
- Barrick proposes 55% economic share for Mali.
- Loulo-Gounkoto forecast gold output to hit 560,000 ounces.
- Nevada output drops, costs rise in third quarter.
Barrick Gold’s CEO, Mark Bristow, is optimistic about finalizing a new mining code agreement with Mali’s interim government by the end of the year.
Negotiations between Barrick and Mali’s authorities have been ongoing for several months regarding regulatory changes at the Loulo-Gounkoto mining complex, one of Mali’s largest and most productive gold mines.
Barrick offers Mali 55% mine revenue share
According to sources cited by Reuters, Mali is seeking approximately $500 million in back taxes from Barrick as the country looks to boost revenue from its mining sector.
In a statement on Thursday, Bristow shared that Barrick had proposed a deal in which Mali would receive 55% of the economic benefits from Loulo-Gounkoto, mirroring an arrangement made with Tanzania several years ago.
However, Bristow declined to provide specific comments on Mali’s financial demands related to unpaid taxes and potential fines. “We’re ready to allocate a larger share of the economic benefits,” Bristow said in an interview. “The critical objective is to safeguard the long-term value of the mine.
Any increase in basic costs could affect the longevity of the project, which ultimately has ramifications for the country as well.”
Barrick ups Mali stake, bears capital risk
While Barrick has offered Mali a larger stake in the economic benefits, the company emphasized that it will continue to bear the capital risk associated with the mining project. Discussions on finalizing the agreement are still underway.
On Thursday, Barrick reported that full-year production at Loulo-Gounkoto is expected to hit the upper end of its forecast, reaching 560,000 ounces. Currently, the mine complex holds gold reserves of approximately 6.7 million ounces, with a measured and indicated resource base of 9.1 million ounces.
Loulo-Gounkoto produced 683,000 ounces of gold in 2023. In early October, Barrick made an $85 million payment to the Malian government as part of ongoing negotiations.
Since then, the company has actively engaged with officials, underscoring its commitment to Mali as a long-standing partner. While Barrick denies any wrongdoing, it is proceeding in good faith to resolve outstanding issues through a memorandum of agreement.
Barrick President and CEO Mark Bristow highlighted the company’s 30-year partnership with successive Malian governments, noting that past disagreements have always been resolved amicably. Barrick remains dedicated to reaching a solution that benefits all stakeholders.
Challenges in Nevada operations
While progress in Mali was encouraging, Barrick faced challenges at its Nevada Gold Mines, where Q3 gold output fell to 385,000 ounces from 401,000 ounces in the previous quarter.
Rising costs also impacted profitability, with all-in sustaining costs (AISC) for gold increasing to $1,507 per ounce in Q3, up from $1,255 per ounce a year prior. Copper AISC similarly saw a 10.5% rise year-over-year, though it declined slightly from Q2 levels.
Barrick forecasts a stronger performance in Q4 and anticipates achieving its 2024 production target of 3.9 to 4.3 million ounces of gold. “Meeting the lower end of guidance is feasible, but Q4 will require focused efforts,” noted TD Cowen analysts in a recent report. Barrick’s stock dipped by 1.2% as of Thursday afternoon, with the company’s market cap standing at $32.1 billion.
