Barrick Gold Stock Falls Amid Mali’s ‘Baseless’ Charges, Mine Shutdown Risk: Retail Cautiously Optimistic

Shares of Barrick Gold fell nearly 2% in early morning trade on Monday after the gold miner announced it may have to suspend operations at its Luolu-Gounkoto mine in Mali.

The Luolo-Gounkoto complex, Mali’s biggest gold mine,  accounted for nearly 14% of the Toronto-based company’s annual production and almost 12% of total revenue last year.

“Local operating conditions have deteriorated significantly with employees imprisoned without cause and gold shipments blocked,” Barrick Gold said in a statement.

“If shipments remain suspended, Barrick will be compelled to suspend operations, further impacting the viability of this critical economic driver for Mali,” it added.

This comes after an arrest warrant was issued for the company’s CEO, Mark Bristow, in early December. Several senior members of the company’s team in Mali have been imprisoned by the government on tax and customs charges.

According to the company’s latest statement, these charges are “unfounded” and “baseless,” and the arrest warrant issued against Bristow was “illegitimate.”

“Recent developments further erode investor confidence in Mali’s mining sector and will deter future investment,” Bristow said in a statement, adding that the company is still open to “constructive” engagement with the Malian government.

Barrick Gold Sentiment and Message Volume on Dec 16 as of 9:35 a.m. ET | Source: Stocktwits

Retail sentiment around the stock improved to ‘bullish’ from ‘neutral’ a day ago, albeit amid ‘low’ message volume.

Since taking control in 2020, Mali's military government has strengthened ties with Russia and brought in Kremlin-linked mercenaries to fight an Islamist insurgency, prompting the withdrawal of European and UN peacekeepers.

Facing financial strain, Mali's authorities have pressured miners to settle claims from a sector-wide audit, which Barrick described as "legally and factually flawed."

The company cited that it has invested more than $10 billion in Mali over the past 29 years, with its mines contributing as much as 10% of the country’s GDP annually.

According to the company, the government has received most of its benefits as a 20% shareholder.

“Even though the 2023 Mining Code has no application to existing operations such as Loulo-Gounkoto, the government insists on forcing Loulo-Gounkoto under the framework of that Code,” it added.

Despite the rising value of gold this year, Barrick’s gold has fallen more an 6% year-to-date, as tensions between the government of Mali, one of Africa's top gold producers, and miners operating in the country have continued to escalate after the country revised its mining code.

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