10:15 AM EST, 12/16/2024 (MT Newswires) -- (Adding share price update in first paragraph and National Bank commentary in seventh.)

Barrick Gold ( GOLD ) was down 1.5% on the TSX last last look Monday after saying that it will be "compelled" to suspend the Loulo-Gounkoto operation in Mali if shipments remain suspended amid a dispute with the government.

The miner said it has been unsuccessful in reaching a final resolution with the government "despite numerous good-faith attempts to negotiate and a willingness to compromise beyond its legal rights." Mali's government owns a 20% stake in the mine.

"Barrick's proposals toward a Memorandum of Agreement, which included significant concessions, have not been meaningfully considered and have been rejected by the Government of Mali," Barrick said. "Even though the 2023 Mining Code has no application to existing operations such as Loulo-Gounkoto, the government insists on forcing Loulo-Gounkoto under the framework of that Code."

Barrick noted that it has invested over $10 billion in Mali for 29 years, with its mines contributing 5% to 10% of the country's GDP annually.

Since November 25, several senior members of Barrick's Malian management team have been imprisoned amid the dispute.

"Recent developments further erode investor confidence in Mali's mining sector and will deter future investment," Barrick CEO Mark Bristol said. "Nonetheless, in view of our long-standing commitment to the people of Mali, we remain open to constructive engagement with the government to resolve these issues while protecting the viability of this key economic driver for Mali."

Meanwhile, Barrick has kept its Sector Perform rating and C$27 price target at National Bank of Canada following the news.

The bank said its Sector Perform rating is based on recent operational weakness, combined with heightened geopolitical risks vs. senior peers.

The price target was based from a 100% weighted 4.25x NTM EV/EBITDA target multiple, which implies a P/NAV multiple of 0.95x. As of Friday's close, Barrick was trading at 5.0x and 3.7x our 2024 and 2025 estimates on an EV/EBITDA basis and 0.84x NAV (Sr Producer peer average at 0.81x) on a cash-adjusted basis.

"Given the continued operating risk in Mali and potential for a shutdown on one of Barrick's most consistent producing Tier 1 mines, we would expect Barrick's shares to underperform peers in today's trading," National Bank said, before adding: "A December shutdown at this major mine could also put 2024 gold production guidance at risk. We currently estimate Barrick producing 3.90Moz of gold in 2024 vs. the guidance range of 3.9-4.3M."

Price: 23.67, Change: -0.23, Percent Change: -0.96