Barrick Gold Corp. has reported a $1.04 billion net charge following the seizure of its Loulo-Gounkoto gold complex in Mali by the country’s military-led government, despite a strong rally in global gold prices.
The loss stems from the “deconsolidation” of the mine after a change in control, according to Barrick’s second-quarter earnings report. The write-down was partially offset by a $745 million gain from the sale of the company’s 50% stake in the Donlin Gold project in Alaska.
Tensions in Mali escalated in June when a court ordered that management of one of Barrick’s largest operations be handed over to a state-appointed accountant and former health minister for six months. The dispute over mining proceeds has also resulted in the detention of four Barrick employees and a government-imposed block on gold exports from the site. Barrick subsequently closed the mine in January.
Bloomberg Intelligence analysts Grant Sporre and Emmanuel Munjeri noted that the writedown highlights the company’s ongoing challenges in regaining control of the operation and could overshadow Barrick’s operational gains, robust cash flow, and a newly declared five-cent performance dividend.
Despite the Mali setback, Barrick’s shares remain up approximately 50% year-to-date, benefiting from gold’s surge to a record $3,500 per ounce in April. Over the same period, the VanEck Gold Miners ETF has gained about 70%.
CEO Mark Bristow said in the earnings report:
“While the market hasn’t fully recognized the value we are creating, our performance and growth remain strong.”
In early New York trading, Barrick’s stock dropped as much as 5.7% before trimming losses.