US company Flagship Gold signs a deal to bring Mali’s Morila mine back to life
The first U.S. investment under the military-led country’s new mining code has been made by New York-based Flagship Gold Corp, which has partnered with Mali’s state-owned miner to resume production at the Morila gold mine, according to the country’s government.
The deal, which was completed in Bamako on Wednesday, permits Flagship to purchase stock in Morila SA, which is thought to have deposits of 2.5 million ounces, according to a statement from Mali’s mines ministry. No information about the relationship was disclosed.
The mine, which is in the Sikasso area of Mali and is situated in the southern city of Sanso, was taken over by the state in June after Firefinch (N9F.MU), an Australian company, closed its operations in 2022 due to dwindling output and increased expenses.
The June 2024-incorporated Flagship arrives in Mali as resource nationalism surges throughout the Sahel, where military-led regimes in neighboring Burkina Faso, Niger, and Guinea have tightened control over resources like gold, uranium, and bauxite.
By eliminating important tax advantages and permitting up to 30% ownership in new enterprises, Mali’s new mining code, which was implemented in August 2023, increased state control.
Although state-backed transactions have allowed Chinese and Russian companies to expand their footprint, the reform has scared global investors.
“This is a win-win partnership,” stated Amadou Keita, the director of mines.
When asked about Morila’s financing plans, Flagship’s legal counsel, David Alan Miller of Graubard Miller, stated that the company is now unable to reveal any information beyond what is publicly available.
The resurgence of Morila, which was previously run by Barrick (ABX.TO), opens a new tab, and AngloGold Ashanti (AU.N), opens a new tab, is a result of the global race for high-grade resources as gold prices soar above $4,000 an ounce.
The agreement “raises hope” for the future of mining in Mali, according to Alousséni Sanou, the country’s minister of economy.
As a result of insecurity and regulatory crackdowns, investment has declined in Mali, one of Africa’s leading producers of gold. By the end of August, industrial gold production had dropped 32% year-over-year to 26.2 metric tons, according to government figures.
