Toronto-based Barrick Gold Corp. (TSX: ABX, NYSE: B) has reached a definitive agreement with Mali’s military government, ending a two-year dispute over operational control of its flagship Loulo-Gounkoto gold mining complex and sending its shares to record highs.
Under the settlement announced Monday, Barrick will withdraw its arbitration case filed with the World Bank’s dispute tribunal, while Mali has committed to dropping all charges against the company and its affiliates, releasing four detained employees, and restoring full operational control of the mining complex. According to people familiar with the terms, the agreement also includes a 10-year extension of Barrick’s mining permit and the company’s acceptance of Mali’s 2023 mining code.
The resolution concludes a bitter standoff that began when Mali implemented a new mining code seeking greater revenue share from gold producers amid record gold prices. The conflict escalated dramatically earlier this year when authorities seized several metric tons of gold from the mine site and appointed a provisional administrator, effectively pushing Barrick out of operations and forcing the company to write down approximately $1 billion in assets.
Investors welcomed the news enthusiastically, driving Barrick’s shares up 8.5% to a record C$55.93 in Toronto trading, while its New York-listed shares hit a 52-week high with market capitalization approaching $62 billion. The positive sentiment reflects Loulo-Gounkoto’s significance as one of Barrick’s most profitable assets, ranking among the world’s top 10 gold producers with output of 723,000 ounces last year. However, analysts at Jefferies cautioned that full production ramp-up could take six to twelve months.
The settlement arrives as Barrick navigates multiple internal challenges, including leadership turmoil that saw the abrupt departure of former CEO Mark Bristow and mounting pressure from activist investor Elliott Investment Management, which has built a stake worth at least $700 million. Interim CEO Mark Hill is implementing a comprehensive reorganization, merging operations and realigning management, sparking market speculation about potential portfolio separation or acquisition scenarios.
While the agreement removes immediate operational uncertainty, some analysts remain cautious about Barrick’s long-term prospects in Mali. Veritas Investment Research analyst Martin Pradier suggested that “the logical thing after this for Barrick would be to get out of Mali,” noting that the new mining code offers no improvement and the company cannot operate effectively under “flimsy regulations.”
