Barrick Nears Malian Resolution, Completes Feasibility Studies For Two World-Class Projects

Barrick Gold GOLD is getting closer to resolving a prolonged dispute with Mali's military junta over the country's mining code reforms. Seeking to maximize state revenue, the junta demanded higher royalties and a greater share of profits from foreign operators.

The situation gradually worsened since 2023, leading to a standoff with Barrick, which operates the Loulo-Gounkoto complex, one of Mali's largest gold mines.

Junta sought hundreds of millions in additional payments, detaining Barrick employees and issuing an arrest warrant for CEO Mark Bristow. However, when they seized gold shipments last month, Barrick halted operations at the complex, causing the management to lower the firm's production guidance to between 3.2 million and 3.5 million ounces.

The suspension of operations hurt Barrick's bottom line and cost Mali millions in lost revenue. Per the latest data, the country's gold output fell as much as 23% in 2024.

Still, according to Reuters, Barrick has found common ground and signed a new agreement. The deal reportedly includes a payment of $438 million in exchange for the release of detained employees, the return of seized gold, and the resumption of operations at Loulo-Gounkoto.

Despite progress, the situation remains uncertain until Malian authorities sign the agreement. Despite the challenges in Mali and growing uncertainty in emerging markets, Barrick continues to make substantial investments, completing feasibility studies for two large-scale projects.

The Lumwana Expansion project in Zambia is set to transform the mine into a top-tier copper producer. The mine's proven and probable reserves have increased by 180% since 2023, with total reserves now at 1.6 billion tons grading 0.52% copper.

The expansion will extend Lumwana's operational life by 17 years to 2057 and double the processing capacity to 54 million tons annually. Copper production is expected to reach 240,000 tons annually, placing it among the top 25 copper mines globally.

Meanwhile, the feasibility study for Pakistan's copper-gold Reko Diq project shows 3.9 billion tons grading 0.43% copper and around 29 million contained ounces of gold.

The initial production phase targets 45 million tons of ore annually by 2028, with plans to expand capacity to 90 million tons annually by 2034. The initial investment is $5.6 billion, with an additional $3.3 billion allocated for expansion.

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