TORONTO - Barrick Gold Corporation (NYSE:GOLD)(TSX:ABX), a mining giant with a market capitalization of $29.36 billion and an overall GREAT financial health score according to InvestingPro, today reported ongoing disputes with the Government of Mali regarding the Loulo-Gounkoto mining complex, despite efforts to reach a resolution. Barrick has made numerous attempts over the past year to negotiate a Memorandum of Agreement, offering significant concessions, but the proposals have been rejected by the government.
The Government of Mali, which owns a 20% stake in Loulo-Gounkoto, has been receiving the majority of the economic benefits from the mine. Despite this, the government is applying the 2023 Mining Code to the complex, which Barrick says should not apply to existing operations. Local operating conditions have worsened, with unwarranted imprisonment of Barrick employees and blocked gold shipments. If these blockades continue, Barrick may have to suspend operations, threatening the economic contribution the mine provides to Mali.
Over its 29-year presence in Mali, Barrick has invested over $10 billion, with the mines contributing between 5% to 10% of the country's GDP annually. In 2023 alone, Barrick's contribution exceeded $1 billion. The company maintains strong operational efficiency with revenue of $12.34 billion in the last twelve months and operates with moderate debt levels. InvestingPro analysis reveals the company has maintained dividend payments for 38 consecutive years, demonstrating long-term financial stability. The Loulo-Gounkoto complex is one of Mali's largest taxpayers and employers, with a workforce of 8,000, 97% of whom are Malian nationals. The Malian state has garnered more than 70% of the economic benefits from the complex to date.
Recent actions against Barrick's Malian management team, including imprisonment on unfounded charges and the reported issuance of an arrest warrant against Barrick's President and CEO, have raised serious concerns about the misuse of the criminal justice system in Mali.
Mark Bristow, Barrick's President and CEO, emphasized the company's commitment to Mali and its openness to constructive engagement with the government. However, he also noted that recent developments have eroded investor confidence and could deter future investment in Mali's mining sector. Despite these challenges, InvestingPro's Fair Value analysis suggests the stock is currently undervalued, with analysts maintaining positive profit forecasts for the year. Get access to detailed valuation metrics and 6 additional ProTips with an InvestingPro subscription. Bristow stressed the importance of mutual and respectful negotiations that preserve the long-term sustainability of the mining sector.
The information in this article is based on a press release statement from Barrick Gold Corporation.
In other recent news, Barrick Gold has been making headlines due to a variety of developments. The company has been actively engaging with the Malian government to resolve legal disputes involving the detention of four of its employees at the Loulo-Gounkoto mining complex. Despite the ongoing discussions, a resolution has yet to be reached.
Barrick Gold also reported a strong Q3 performance in 2024, with a 33% increase in adjusted net earnings per share and a 24% increase in free cash flow, reaching $444 million. The company's gold production remained stable, while copper production increased by 12%. A share repurchase of $95 million was executed and its quarterly dividend remained consistent at $0.10.
The company also managed to reduce its net debt by 27% to $500 million due to reduced costs. Furthermore, Barrick Gold's strategic initiatives are expected to stimulate a 30% growth in gold equivalent production from existing assets. However, the company anticipates increased capital expenditures in Q4 2024 and has adjusted mine plans to align with a $1,400 gold price assumption due to inflationary pressures.
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