First payment of $US80m moves Resolute Mining step closer to release of CEO Terry Holohan in Mali

Resolute Mining says a payment of $US80 million ($124m) has moved it closer to securing the release of its boss and two executives from the controlling junta in Mali. It will be forced to cough up another $US80m in coming months — but it still has no time frame of when the trio will be freed and allowed to leave the West African country. Chief executive Terry Holohan and two staffers were detained just over a week ago, which has left the Perth-based gold miner scrambling to extricate them from an impoverished nation attempting to squeeze more money from foreign miners by pressuring them to renegotiate agreements at the risk of losing their operating licences. It was reported last week that Mali’s government was pressing Resolute — which operates the Syama gold mine — to pay $247m to settle a dispute mainly concerning alleged back taxes after a sector-wide audit. In an update released to the Australian Securities Exchange on Monday, Resolute said it was still in talks with the government but had agreed to “a memorandum of understanding expressed as a protocol” that including two tranches of $US80m each. The first has been paid through existing cash reserves. The second will be paid in “coming months from existing liquidity sources”. The company noted in its September quarter update released at the end of last month that it held net cash of $145.6m. “The signing of the protocol sets the framework for further detailed discussions with the government regarding the long-term future of the operations in Mali, including migration of the company’s assets in Mali to the 2023 Mining Code and maintaining the safety of the company’s employees,” Resolute said. Resolute said the protocol allowed for the settlement of all outstanding claims by the government against the company — including those related to tax, customs levies, maintenance and management of offshore accounts. It said Mr Holohan, a British national, and the two executives were still detained but “remain safe and well”. “Resolute further confirms that it is working with the government on the remaining procedural steps for the release of the three employees, including the company’s CEO, Terence Holohan, who were recently detained in connection with these matters. “They remain safe and well and continue to receive support on the ground from the UK and international embassies and consulates.” Monday’s update marks the first new from the company since November 11 — three days after the trio was detained while visiting the capital Bamako for talks with mining and tax authorities. Shares in dual-listed Resolute were suspended from trade on Thursday after the stock tanked 35 per cent earlier in the week. They returned after the update and fell a further 7.5 per cent to 37.2¢ — almost half their value before the saga began. The company’s value now stands at $792m, down from just over $1.4 billion. Resolute is not the first company to be targeted as the military rulers of Africa’s third-largest gold producer ratchet up pressure on mining companies to renegotiate economic terms, which coincides with a 25 per cent jump in the price of bullion this year. The company had previously negotiated a so-called convention for Syama that runs until 2029. Resolute holds an 80 per cent stake in the mine in southwest Mali, with the government owning the rest. The authorities have also threatened to reclaim Barrick Gold’s Loulo mine permit when it expires in 2026. CEO Mark Bristow has said his company is discussing a “mutually acceptable outcome” with Mali’s leaders. Allied Gold and B2Gold have also recently announced agreements that will govern the future operations of their Sadiola and Fekola projects in the country. They will pay about $US116 million and $US204 million, respectively, to the state under the deals.