Resolute shares bounce back as second payment made to Mali government to secure workers’ release

Australian gold miner Resolute Mining Ltd (ASX:RSG) has seen its shares jump by more than 4% on news it had made a second payment of US$50 million to Mali’s militia government, which has detained several workers, including chief executive Terry Holohan, since November 8.

On Friday, the company told investors it had made the second payment – taken from cash reserves – with a remaining US$30 million to be paid by the end of the year.

Resolute signed a Memorandum of Understanding with the Mali government on November 18 which laid out a framework for a total payment of US$160 million.

The MOU – expressed as a protocol – also indicated further detailed discussions with the government would proceed, with a focus on the company’s long-term future in Mali. As part of this, several of Resolute’s assets would be migrated to the 2023 Mining Code, and there would also be discussion on the safety of employees in the country.

All outstanding claims by the government against Resolute (including those connected to tax, customs levies, maintenance and management of offshore accounts) will also be settled according to the protocol.

It was also highlighted that Resolute’s operations at the large-scale Syama gold mine were continuing and had been unaffected by other factors.

Following Resolute’s initial report of its employees being detained – on November 11 – the company’s shares plunged 33% to 45 cents, wiping $500 million off its market value, and dropping further after this.

But investors appeared glad to hear about the second payment, reported today, and by 13:06 AEDT, shares were trading at 43.2 cents – a rise of 4.22% since the market opened.

Join the discussion: See what HotCopper users are saying about Resolute and be part of the conversations that move the markets.

The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.