Resolute Mining share trading suspended amid talks on ‘$250 million demand’ from Mali

Share trading in Resolute Mining has been suspended as the company scrambled to respond to a report the gold miner is on the hook for $250 million in Mali after the detention of staff by the country’s military junta.

The already battered stock plunged 6 per cent on the report before Resolute halted trading late in the day ahead of an update that may not be coming until Monday.

While it declined to comment, it is understood the Australian Securities Exchange prompted the suspension.

Earlier, international news agency Bloomberg reported that Mali is demanding the Perth-founded, but London-managed Resolute pay nearly $250m to resolve a tax dispute that a week ago escalated to the detention of the company’s chief executive Terry Holohan and two colleagues in the capital of Bamako.

The detentions come as the impoverished nation seeks to squeeze more money from foreign miners by pressuring them to renegotiate mining agreements at the risk of losing their operating licences.

Quoting sources, Bloomberg said Mali’s Government was arguing that Resolute — which operates the Syama gold mine — should pay $247m to settle a dispute mainly concerning alleged back taxes after a sector-wide audit.

The parties had been discussing a potential agreement that would see the company pay half that sum now and half at a later date, Bloomberg said.

Resolute has not commented publicly since Monday when it told shareholders that unspecified the claims against the company were “unsubstantiated” and that it was talking with Mali on a resolution.

The group has argued that it is working to a mining deal that does not expire until 2029.

However, Mali is applying pressure against Resolute and other miners on two fronts - a revised mining code that provides for increased local ownership of mines and tax audits that inevitably find the companies have to make additional multimillion-dollar payments to the government.

The detentions are believed to part of leverage to bend Resolute to the Government’s will.

Two months ago, Mali also briefly jailed four Barrick Gold over alleged “financial crimes” amid protracted talks over a new mining deal. Mali has reportedly sought $US500m in unpaid taxes from the mining giant, which has conceded it is prepared to share more of the benefits from its mining in Mali.

Companies operating in Mali have suggested that Resolute initially baulked at the Government’s demands.

On Monday, the company said Mr Holohan and the other employees were in Bamako “to hold discussions with the mining and tax authorities regarding general activities related to Resolute’s in-country business practices, and to progress open claims made against Resolute, which the company maintains are unsubstantiated”.

“Resolute has followed all official processes with respect to its affairs and has provided the authorities with detailed responses to all the claims made,” it said.

Mali’s pressure tactics have coincided with record gold prices that have inflated revenues and profits at the companies. US-dollar prices for the metal have risen 30 per cent in 2024 as central banks cut interest rates and geopolitical tensions increase its attractiveness as a haven.

Resolute has lost nearly $570m since the detentions were confirmed on Monday, with the shares off 40 per cent for the week after closing at 40.25¢ on Thursday.