Barrick CEO expects deal with Mali on new mining code by year-end

Barrick Gold (NYSE: GOLD) CEO Mark Bristow is confident about concluding negotiations with Mali’s junta-led government on a new mining code before the end of the year.

Discussions between Barrick and Malian authorities on implementing new regulations at the Loulo-Gounkoto mining complex — one of the African nation’s largest gold mines — have been ongoing for months.

Sources cited by Reuters previously reported that Mali is seeking around $500 million in unpaid taxes from Barrick as the government aims to increase revenue from the mining sector.

On Thursday, Bristow told Reuters that Barrick has offered Mali 55% of the economic benefits from Loulo-Gounkoto, a deal he likened to an agreement reached with Tanzania about five years ago.

The CEO declined to comment on Mali’s cash demands or claims of unpaid taxes and fines.

“We are prepared to give them more of the economic benefits,” Bristow said in the Reuters interview. “The key is to preserve the asset’s long-term value. Any increase in basic costs affects project longevity, which ultimately impacts the country.”

While Barrick has proposed a larger share of “economic benefits” for Mali, the company will continue to “carry the capital risk, as we have always done,” Bristow noted, adding that discussions remain ongoing.

The gold miner reported on Thursday that full-year production at Loulo-Gounkoto is expected to reach the upper end of its forecast at 560,000 oz.

Loulo-Gounkoto currently holds gold reserves estimated at 6.7 million oz., included within a measured and indicated resource totalling 9.1 million oz. The mine complex produced 683,000 oz. of gold in 2023.

Lower Nevada production

However, Barrick missed Wall Street’s third-quarter profit estimates on Thursday, as the company cited higher costs and reduced production at its Nevada operations.

Gold output at Nevada Gold Mines dropped to 385,000 oz. in Q3, down from 401,000 oz. in the prior quarter.

All-in sustaining costs (AISC) for gold rose to $1,507/oz. in Q3 from $1,255/oz. a year earlier. While copper AISC increased 10.5% year-over-year, it represents a decline over the previous quarter.

Barrick said it expects improved performance in the fourth quarter and anticipates meeting its 2024 gold production target of 3.9-4.3 million oz.

“Reaching the lower end of guidance is achievable, though Q4 will require significant efforts,” TD Cowen analysts noted in a report.

Barrick shares fell 1.2% by 12:10 p.m. EDT Thursday. The Toronto-headquartered gold miner has a market capitalization of $32.1 billion.

(With files from Reuters)