Resolute Mining CEO Detained In Mali, Shares Crater
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Resolute Mining (OTC:RMGGY) CEO Terry Holohan, along with two other company executives have been detained by the military-led government in Mali.
What Happened: The executives traveled to Bamako, Mali's capital, for meetings with local mining and tax authorities to address concerns over the company's in-country practices.
Resolute asserts that these claims are unfounded and that all official processes have been followed, yet Holohan and the other executives were "unexpectedly detained" on November 8. The company confirmed the detention, stating that the executives are receiving support from U.K. and international consulates.
Why it Matters: The Malian military junta has been escalating its efforts to tighten control over foreign mining operations, as mining is a critical part of the economy.
The junta, which seized power in a 2020 coup, has been renegotiating existing contracts under a mining code introduced in 2023 that allows for an increase in state ownership in mining projects from 20% to 35%.
The government's approach has already led to similar incidents, such as the detention of four Barrick Gold (NYSE:GOLD) employees in September. The detention was tied to allegations of financial misconduct amid discussions over environmental and regulatory commitments at Barrick's Loulo-Gounkoto mines. The junta has warned it might let the Loulo mine concession expire in 2026.
Resolute's Syama gold mine in Mali is one of the company's two primary assets, contributing nearly 60% of its total gold output in 2023.
The mine, in which the government holds a 20% stake, is a long-term project vital to Resolute's operations, with a second phase scheduled for 2025.
Despite adhering to all regulatory procedures, Resolute's commitment to maintaining favorable contract terms for Syama appears to have clashed with Mali's new policies.
"Resolute's utmost priority remains the safety and well-being of its employees," the company said, affirming its intention to continue discussions with authorities.
Resolute's situation points at escalating risks of operating in Mali. Other companies such as B2Gold, Allied Gold, and AngloGold Ashanti will now be on high alert.
Market Watch: Resolute's shares dropped 32.84% following the news, closing the day on the Australian Securities Exchange at A$0.45.
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