Well, the Malian government finally went and did it; they have killed the goose that laid the golden eggs. In this case, the goose in question is Canadian gold miner Barrick Gold (TSE:ABX), or at least, the Loulo-Gounkoto site in Mali. But investors are not displeased, and sent shares up fractionally in Tuesday morning’s trading.
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Yesterday, we found that the Malian government had decided to solve the Gordian knot of how much money it was getting out of Barrick Gold’s operation in country by cutting right through it, and going in and taking some gold for themselves. Naturally, this did not sit well with Barrick Gold, who had gone through all the time, trouble and resources to mine that gold, and they threatened a potential shutdown accordingly.
Now the threat is real. Reuters notes that Barrick will be suspending operations in Mali, after the government seized a whopping three metric tons that had been stored therein. The gold was apparently hustled on board several air force helicopters, and was subsequently transferred to Banque Malienne de Solidarite, a state-owned bank. Given that the last reports available said that there were around four metric tons on site, Barrick Gold might be able to get something home for its efforts.
But All Is Not Lost
While Mali is now pretty much lost to Barrick—who will go in and try to extract gold there ever again?—and there are signs that Burkina Faso and Niger both want to “renegotiate” terms, Barrick Gold is hardly out of places to dig. In fact, new reports from Mining.com note that Barrick may have some competition in Pakistan.
Reports note that Manara was looking to buy a stake in the Reko Diq mine, which is “one of the world’s largest underdeveloped copper-gold areas.” If Barrick is out of Mali for good—which it likely is after all that seizure—it may well turn its attention to Pakistan instead.
Is Barrick Gold a Buy or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on TSE:ABX stock based on eight Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 3.09% loss in its share price over the past year, the average TSE:ABX price target of C$33.77 per share implies 51.34% upside potential.
