Mali chatter You've Got Mali.
Soldiers in Mali have overthrown the government of President Amadou Toumani Toure and seized control of
the country, one of the most significant gold producers in Africa. Renegade soldiers took control of the state-run television
station and announced that the country is currently under control of the military’s National Committee for the Reestablishment
of Democracy and the Restoration of the State (CNRDR) and that they were suspending Mali’s constitution and dissolving its
institutions. The mutiny is being attributed to dissatisfaction within the military towards the government’s handling of the
Tuareg insurgency in Northern Mali. The uprising has apparently turned increasing violent when fighters that supported
Muammar Gadhafi returned from Libya heavily armed and several government soldiers have apparently been killed. Malian
soldiers that were sent to fight the uprising have alleged that they were not provided with sufficient supplies including arms or
food. An official visit by the Defense Minister General Sadio Gassama to a military camp in the capital of Bamako reportedly
failed to address their grievances. The spokesperson for the CNRDR also indicated that the group’s objective was not to
"confiscate power" and pledged to “return power to a democratically-elected president as soon as national unity and territorial
integrity are established." The reported coup comes just before elections next month (April 2012) when Toure was due to step
down after two five-year terms. While there is some longer-term uncertainty regarding a change in regime, Canaccord Genuity
Analyst Steven Butler views the likelihood of unfavourable changes to mining regulation as relatively low given his belief that
any reasonable government will realize the importance of foreign investment in the mining sector. Companies impacted: i)
Randgold - Has an estimated 65% of production from Mali based on Canaccord Genuity estimates, said its operations are
running normally; ii) Avion - Has a producing asset in the Tabakoto project (100% of its current production) and
exploration/development stage in the Kofi project. AVR shares are down 15% YTD vs. the S&P/TSX Gold Index down 7%, the
underperformance is likely driven by market concern regarding operational risk associated with the Tabakoto mill expansion
and underground ramp-up in 2012. The company is expected to report Q4/11 financial results next week and may provide
further colour on the status of the ramp-up and/or updated cost guidance for 2012 (production guidance of 140-150koz for 2012
has been pre-released but cash cost guidance has not been provided); iii) Others in country -
IAMGOLD (IMG), Cluff Gold
(CFG)
, AngloGold Ashanti (AU) and Gold Fields (GFI).
China