Stocktwits - Barrick Gold Corp. (NYSE:GOLD) shares declined more than 2% in morning trading on Monday after reports emerged that Mali's military junta has begun enforcing an interim order to seize gold stockpiles at the Loulo-Gounkoto mine operated by the company.
The escalation deepens a dispute over revenue distribution from the vast mining operation in the West African nation, leaving investor sentiment on Stocktwits divided.
The world’s second-largest gold producer has been at odds with the Malian government over how revenue from the Loulo-Gounkoto complex is shared.
A company memo obtained by Bloomberg revealed that while gold shipments from the mine have been blocked since November, the junta began enforcing its interim seizure order on January 11.
The directive, issued earlier this month, aims to claim gold stockpiled at the site.
Last week, in response to the directive, Barrick issued a one-week ultimatum to Mali’s government to lift the shipment restrictions, warning that operations at the mine could be suspended if the impasse continues.
Currently, the Canadian mining giant has not issued a public statement regarding the latest developments.
It did inform investors about an unsolicited mini-tender offer by TRC Capital Investment Corporation to purchase 5 million of Barrick’s common shares at C$21.35 per share—below the market price.
Barrick has advised shareholders to reject the offer, noting that the proposed price reflects a 4.5% discount to the stock’s last traded price on January 7.
On Stocktwits, retail sentiment improved to ‘neutral’ from ‘bearish’ a day ago. Message volumes also increased to ‘high’ from ‘low’ levels.
Some users expressed optimism about macroeconomic conditions favoring gold prices, anticipating a weaker dollar and declining yields.
One user anticipates that the dollar will remain strong, given the additional spending necessary to rebuild Los Angeles after the wildfires subside.
Another noted the divergence in price reactions between gold and Bitcoin, attributing it to differences in their investor bases as safe-haven assets.
Barrick has faced additional challenges, including disappointing earnings last quarter due to lower-than-expected gold production and rising costs, despite higher gold prices.
The company expects 2024 gold production to be at the lower end of its guidance range. However, it has growth initiatives in the pipeline, such as the Reko Diq copper project in Pakistan, which is expected to double its copper output by the end of the decade.
Despite the uncertainty in Mali and weaker-than-expected earnings, Barrick Gold’s stock has only fallen 1.5% in the last year.
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