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Highlights
- Resolute Mining makes a second payment of US$50 million to the Mali government, boosting investor confidence.
- Remaining US$30 million to be paid by the end of the year as part of a US$160 million agreement.
- Shares climb 4.22%, recovering some losses after the detention of workers, including CEO Terry Holohan.
Resolute Mining Ltd (ASX:RSG) saw its shares climb by more than 4% on Friday after announcing it had made a second payment of US$50 million to the government of Mali. The payment is part of a broader US$160 million agreement outlined in a Memorandum of Understanding (MOU) signed between the company and Mali’s militia government on November 18. The payment was taken from the company’s cash reserves, and the remaining US$30 million is expected to be paid by the end of the year.
Payment and Negotiations with the Mali Government
The MOU, which has been expressed as a protocol, serves as a framework for the total payment and signals the beginning of more detailed discussions between Resolute and the government. These talks are expected to focus on Resolute’s long-term future in Mali, including the migration of several assets to the 2023 Mining Code and the safety of employees in the country. Additionally, the protocol stipulates the settlement of outstanding claims by the government, which include taxes, customs levies, and the management of offshore accounts.
Continued Operations Despite Tensions
Despite the challenges, Resolute emphasized that its Syama gold mine, one of the company’s largest assets in Mali, has continued operations unaffected by the detention of several employees, including CEO Terry Holohan. Holohan and other workers were detained by the Malian government on November 8, causing significant concerns among investors.
Following the initial report of the detentions on November 11, Resolute’s shares had fallen sharply by 33% to 45 cents, erasing about $500 million from the company’s market value. However, the news of the second payment seems to have reassured investors, as the stock rose to 43.2 cents by 13:06 AEDT, reflecting a 4.22% increase since the market opened.
