B2Gold Corp. (TSE: BTO) (NYSE AMERICAN: BTG) has opted to go ahead with its plans to invest USD$10 million into exploration at its Fekola gold complex in Mali, in spite of the ongoing tensions between the regime and foreign gold producers.
The Fekola gold complex includes a producing mine and active exploration efforts. The company introduced a new mining code in August 2023 which increases the state’s share of mining revenues and eliminates tax exemptions for mining companies. B2Gold negotiated a settlement with the Malian Government.
Clive Johnson, B2Gold’s CEO said on Thursday that the company had seen a reduction in risk since the signing the settlement agreement.
In September last year, the company resolved an income tax demand and agreed to align certain exploration activities with the new regulations.
Malian officials detained and arrested employees of companies that failed to comply with the new code.
The government issued arrest warrants for Mark Bristow, CEO of Barrick Gold Corp (TSE: ABX) (NYSE: GOLD), Mali’s largest investor. Mali seized approximately USD$245 million worth of gold from Barrick’s Loulo-Gounkoto mine, prompting Barrick to suspend operations.
Johnson does not see any attempts by the government to detain him or his managers in Mali.
“We have expatriate employees that move in and out of the country regularly, including some of the mine management, so there is no reason to think that any detention would ever be contemplated as it relates to B2Gold,” Johnson said.
Barrick isn’t the only company to run into troubles with the Malian government, either.
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Resolute Mining paid Malian junta $160M after detention of CEO
Malian authorities detained Resolute Mining Ltd (ASX: RSG) (OTCMKTS: RMGGF) CEO Terry Holohan and two colleagues for 10 days.
Following their release, the company agreed to pay the Malian junta USD$160 million to settle tax claims it had initially described as unsupported. Holohan had been negotiating with Malian officials in Bamako, the nation’s capital, prior to his detainment.
B2Gold negotiated an early settlement with the Malian government to resolve a tax demand and align its Fekola mine operations with the new mining code. Despite these efforts, the situation remains volatile for gold producers operating in Mali, a country where gold mining constitutes 10 to 15 per cent of GDP.
The Malian government, controlled by a military junta since 2021, is under pressure to maximize revenue from natural resources to fund its administration and reduce dependency on foreign aid. While it argues that the new laws ensure fairer returns for the country, critics claim the enforcement tactics—such as detentions, seizures, and legal actions—threaten the viability of foreign investment.
This escalating conflict highlights the risks of doing business in resource-rich but politically unstable regions and leaves Mali’s gold industry at a crossroads as companies grapple with regulatory compliance and operational uncertainty.
Hummingbird Resources (LON: HUM) (OTCMKTS: HUMRF) also agreed USD$16.4 million payoff to Mali’s military government this month, securing the right to operate the Yanfolila gold mine under the new mining code.
Hummingbird’s subsidiary, Société des Mines de Komana, signed the agreement with a government commission to address audit concerns.
The deal establishes a framework for the mine’s ongoing operations and future development.
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B2Gold intends to raise $350M
In other news, the company announced an offering of convertible senior unsecured notes due 2030, with a total principal amount of USD$350 million. The company has also provided an option for initial purchasers to buy up to an additional USD$52.5 million in notes within 15 days. Proceeds will be used to fund working capital requirements and general corporate purposes, starting with paying down the balance of its revolving credit facility.
The notes will bear semi-annual fixed interest and can be converted into common shares. B2Gold retains the right to redeem the notes under certain conditions, while holders can require repurchase upon specific events.
As part of the offering, B2Gold plans to enter a cash-settled total return swap for up to USD$50 million in shares, providing economic exposure to its stock during the swap term, expected to last about one month. Purchases of shares for hedging purposes could influence share prices, and unwinding the hedge may have a similar effect.
This information comes almost a week after the company released its financial statements.
In Q4, the company generated impressive gold revenue of USD$500 million by selling 187,793 ounces of gold at record prices of USD$2,661 per ounce.
In total, the company produced 186,001 ounces of gold during the quarter, including 19,644 ounces from its stake in Calibre Mining Corp. (TSE: CXB) (OTMRKTS: CXBMF). Looking ahead, the Goose project is on track to produce between 120,000 and 150,000 ounces of gold in 2025 and sustain an annual output of approximately 310,000 ounces from 2026 to 2031.
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joseph@mugglehead.com
