B2Gold and Mali Govt Reach Agreement on Fekola Mine Operations
B2Gold (TSX: BTO, NYSE AMERICAN: BTG, NSX: B2G) has finalized an agreement with the government of Mali to address all issues related to the Fekola mine complex amidst the implementation of a new mining code. The Malian government, now under a new administration, holds a 20% interest in the Fekola mine.
In a press release dated September 11, B2Gold confirmed that the Fekola mine complex, which includes the Fekola and Cardinal open pits and the proposed underground project, will continue to operate under the 2012 mining code.
This agreement ensures that B2Gold will maintain stability in ownership, income tax, customs regimes, and dispute resolution rights under the Fekola Mining Convention, which extends through 2040.
Additionally, the Malian government will expedite the exploitation permits for the Fekola regional projects, including the Bantako, Menankoto, Bakolobi permits in the Anaconda area, and the Dandoko permit. The approval process for the Fekola underground project’s exploitation phase will also be accelerated.
The Malian junta had previously announced a delay in granting new mining permits to B2Gold as it conducted an audit of the mining sector and applied a new mining code issued in 2023.
This new code will affect the Fekola regional projects, which B2Gold estimates could yield an additional 80,000 to 100,000 ounces of gold annually starting in early 2025. Initial gold production from the Fekola underground project is expected to begin shortly thereafter.
The agreement follows extensive discussions over the past year since the introduction of the 2023 mining code. It establishes a framework for resolving outstanding issues from Mali’s mining audit, income tax, and customs audits, as well as clarifying the application of the new mining code to the Fekola complex.
Key terms include converting all retained earnings attributable to Mali’s 10% ordinary share interest into a 10% preferred share interest with priority dividends moving forward. B2Gold’s 80% interest will remain as ordinary share interest.
The agreement also resolves all income tax disputes dating back to 2016, along with outstanding customs and value-added tax disputes.
Furthermore, B2Gold has agreed to pay taxes on mine fuel imports previously exempted under the Fekola Mining Convention. To compensate for these taxes, the State of Mali will grant a 2% reduction on revenue-based taxes and royalties applicable to the entire Fekola complex, including both the Fekola mine and the regional projects.
The agreement gives the Fekola complex a fresh start under a new economic partnership with the State of Mali. Following the announcement, B2Gold’s shares surged by 12.9% by 2:40 p.m. ET, boosting the Vancouver-based miner’s market capitalization to C$5.5 billion ($4.1 billion).
