Shares of firm, a CPPIB holding, drop after news
Institutional investors will be keeping a keen eye of Barrick Mining Corp. after a Malian court ruled that its Loulo-Gounkoto gold mining complex should be placed under provisional administration for six months, handing control of one of the Canadian company’s biggest operations to state-appointed management.
The decision on Monday comes after Mali closed Barrick’s offices in the capital Bamako and warned it would take control of the mine, which has been shuttered owing to a months-long dispute over mine dividends, unless it was reopened and tax payments made.
The mine will be managed by Soumana Makadji, an accountant and former health minister, said Issa Aguibou Diallo, a judge at the Tribunal de Commerce.
Shares of Barrick, which represented a relatively small 0.15% of CPPIB's portfolio as of March 31, 2025, fell 0.8% as of 1:03 p.m. in New York.
Mali’s junta has argued that the transfer is necessary to ensure the continuity of operations and protect its national interests. Barrick has condemned the request, calling it unlawful and a violation of its contractual rights.
“While the company has made a number of good faith concessions in the spirit of partnership, it cannot accept terms that would compromise the legal integrity or long-term viability of the operations,” it said in a Monday statement.
The company last month turned to the World Bank’s arbitration tribunal in its efforts to prevent Mali from putting the mine under provisional administration.
A legal representative for Mali’s government didn’t respond to calls and a text seeking comment.
“We view this scenario as the worst-case outcome for Barrick,” Royal Bank of Canada analyst Josh Wolfson said in a note. “In our view, it is most appropriate to assume zero go-forward production for Barrick, while some partial value recovery could be possible through a protracted arbitration process on a longer-dated basis.”
Barrick suspended operations at the site in January after authorities blocked its exports amid disagreements over taxes and royalties.
The cash-strapped military junta running the West African nation has demanded payments for alleged back taxes from Barrick subsidiaries. It also wants the Canadian firm to adhere to new legislation that would give the state a larger stake in the mine and higher royalties.
Exports from Loulo-Gounkoto – which produced 723,000 ounces of gold last year – have been blocked since November. Barrick said that, although it signed an agreement to resolve disputes and reopen the mine in February, the authorities haven’t executed it.
In October, the company paid Mali $85 million as negotiations were ongoing. Mali has since seized 3 tons of gold from the mine and detained four Barrick employees.
This isn't the first time Barrick has been in hot water as over a decade ago, Barrick and Canadian pension fund Canada Pension Plan Investment Board (CPPIB) butt heads over executive compensation. In 2014, CPPIB held 217,364 Barrick shares at the end of December, according to FactSet data. On May 15, CPPIB filed a 13F-HR form disclosing ownership of 8,171,118 shares of Barrick Mining Corporation (US:GOLD) valued at $158,846,534 USD as of March 31, 2025.
