Canadian miner Allied Gold is contemplating alternative options for a power supply deal at its Sadiola mine in Mali, CEO Peter Marrone stated in an interview with Reuters.
This move follows a surge in gold prices and the emergence of new opportunities.
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Allied Gold signed an agreement in February with United Arab Emirates-based Ambrosia Investment, granting Ambrosia a 50% stake in the mine in exchange for installing a new power supply system aimed at reducing operational costs.
The agreement, which includes a provision for Allied Gold to receive $500m (C$684.92m), with approximately $250m in upfront cash consideration from Ambrosia, has yet to close.
Marrone indicated that while the deal may close in June, the company is open to exploring other options if they become available.
“Our position in the country has changed dramatically along with gold prices. The world has changed since we put the deal together,” Marrone said.
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By GlobalDataGold prices have surged nearly 30% this year to date, reaching a record $3,500.05/oz on 22 April.
Ambrosia Investment did not immediately respond to a request for comment regarding the deal.
Marrone noted that the landscape of power solutions for Allied Gold shifted significantly after the company signed a new mining convention with the Mali Government last year.
Mali is Africa’s third-largest gold producer and the military-led government is keen to increase revenue from the mining sector.
The government has expressed concerns that current arrangements are unfair and has stated that foreign multinationals must comply with its demands to continue operations.
The country is currently in dispute with another Canadian miner, Barrick Mining, the only gold miner that has not signed Mali’s new mining code.
Barrick is seeking World Bank arbitration over a possible government takeover of its Loulo-Gounkoto gold complex in the country.
Allied Gold has adopted a pragmatic approach to settling with the government.
“We looked at how best we can deliver returns to our investors, and came to the conclusion that let’s take an action based on cooperation and support,” Marrone said.
