According to a report from Bloomberg, it appears Resolute Mining (ASX:RSG) CEO Terry Holohan – recently detained by Mali’s junta government – is effectively being held ransom for US$160M.
According to reports run by Bloomberg, since being detained over the weekend just passed, Mali’s junta government – which originally arrested Holohan over allegations of tax evasion – has now come out with a sum it wants to see in its coffers.
US$160M – with reports suggesting Mali has left the door open to ‘negotiation.’ The government owns 20% of Resolute’s flagship Syama gold project.
This isn’t an isolated incident. Just in September, Mali’s government detained members of Canadian-based Barrick Gold Corp, who were ultimately forced to reach a deal.
Shares were down a further -5.8% in lunchtime trades on Thursday to 40.5cps. The company has lost over $500M to its market cap since Holohan was first snatched up, reportedly at the country’s capital.
Whether or not Resolute Mining does genuinely owe Mali’s government taxes it hasn’t paid remains unclear, but given the region’s reputation – and a government in power ever since launching a coup in 2020 – it’s not hard to see why some could treat that claim with suspicion.
But some users in the HotCopper announcement thread saw upsides – at least now they know how much Mali expects.
“At least the market now has some feel for the magnitude of the amount,” user Chrisc162 wrote.
Other users – like user Snugge – were less convinced. “Not sure why anyone would be holding this now,” they wrote.
But one user – aptly named Contrarian4me – had a different view.
“Pardon my ignorance, but how is this different to Australian state governments demanding mining royalties from mines operating in Australia?,” they wrote.
For those playing at home, US$160M is around A$250M. The company’s market cap is around $880M at lunchtime on Thursday; in its latest quarterly the company reported having A$145.6M to end the September quarter.
According to reports, Mali has been undertaking a mining sector ‘tax audit’ and now wants 100 billion CFA francs in local currency.
Supposedly, agreements are underway to pay half of that now, and half of it later.
Given that the company only has $145M in cash, it’s not clear what the company’s next quarterly could look like.
RSG last traded at 40.5cps.
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