Barrick to boost Mali exploration as regulations shift

Mali's mining code has recently undergone a significant review, resulting in a new set of rules in force since July 3rd.

Canada’s Barrick Gold (TSX: ABX)(NYSE: GOLD) is actively working to expand its exploration activities in Mali to ensure the long-term sustainability of its Loulo-Gounkoto operation, CEO Mark Bristow said while visiting the operation.

The gold giant has started discussions with Mali’s National Directorate of Geology and Mines as it seeks to grow its footprint in the country. Since 2021, Mali is run by a military junta that has been tightening its grip on the lucrative mining sector.

Media reports suggested earlier this year the regime was planning to seize Barrick’s massive Loulo-Gounkoto complex, one of the world’s largest gold-producing mines. 

Bristow noted the current economic and political climate in Mali has prompted many exploration companies to reduce or halt their operations in the country, but didn’t comment on media speculation. 

What Barrick’s boss did say is that the exodus of exploration companies could negatively affect the country’s gold production in the future.

Mali’s regulatory environment has recently undergone a significant review, resulting in the adoption of the Implementation Decree of the 2023 Mining Code last week. The improved set of rules is expected to provide a stable framework essential for investments in the mining sector.

This is the third time Bristow visits Mali since late January, emphasizing the contributions made by Barrick’s mines to nation’s economy. These include nearly $10 billion in taxes, royalties, salaries, and payments to local suppliers, constituting 5% to 10% of the country’s GDP, the company said.

The gold giant said that, in the past year alone, it has contributed more than a $1 billion to the Malian economy.

“We continue to work constructively towards a global resolution of our differences and finding common ground on the key issue of sharing the economic benefits of our operations,” Bristow said in the statement.

“It’s worth noting that Barrick developed a highly successful benefit-sharing partnership for our Tanzanian operations which has since also been used as a model for the reopened Porgera mine in Papua New Guinea,” Bristow added.

The Loulo-Gounkoto complex currently holds proven and probable gold reserves estimated at 6.7 million ounces, with measured and indicated gold resources totalling 9.1 million ounces. It produced 683,000 ounces of gold in 2023 and is on track to meet its production guidance for the current quarter and the year.