Resolute extraction (ASX:RSG) today announced the completion of a second settlement payment of approximately $50 million to the government of Mali, marking significant progress in resolving outstanding disputes with the West African nation. This payment, part of a larger settlement totaling $160 million, was made using existing cash reserves, with a final installment of approximately $30 million expected by the end of 2024.
These payments follow a Memorandum of Understanding (Protocol) signed on November 18, 2024, at which time an initial payment of approximately $80 million was made.
The agreement aims to resolve the Malian government’s long-standing grievances, including taxes, customs levies and management of offshore accounts, while providing a framework for future collaboration. The protocol also facilitates Resolute’s migration to the Mali Mining Code 2023 and ensures the safety of its employees during the process.
Executive detentions
The announcement comes just days after the safe release of Resolute CEO Terence Holohan and two other executives, who were arrested by Malian authorities on November 8, 2024. The executives were held at the Bamako Economic and Financial Center. On 21 November it was confirmed that the detainees had been released and have since left Mali.
The government, under the 2023 Mining Code, sought to renegotiate contracts to increase state revenue, increasing its stake in mining projects from 20% to 35%. Resolute’s Syama gold mine, the cornerstone of the company’s operations, operates under agreements valid until 2029.
The detentions followed a similar incident involving Barrick Gold Corp, a Canadian mining company, whose four senior Malian employees were arrested in September 2024 on financial crime charges. This occurred during lengthy negotiations regarding Barrick’s Loulo and Gounkoto mines. Malian authorities accused Barrick of failing to meet commitments relating to environmental standards, corporate social responsibility and foreign exchange regulations.
Resolute’s share price fell sharply by 32.84% on November 11, following news of the detentions, closing at 45 cents – the steepest daily drop since 2008.
Operations at Syama remain stable
Despite these challenges, Resolute reported that operations at its Syama gold mine remain unaffected.
Andrew Wray, non-executive chairman of Resolute, said: “Resolute remains focused on securing the long-term future and creating certainty for the Syama gold mine and its expansion plans.”
Resolute’s next steps include finalizing the $30 million payment and continuing discussions to clarify elements of the Protocol. The company remains committed to the safety of its employees and maintaining collaborative relationships with stakeholders.
Shares of the company rose 5.42% to $43.75.