Endeavour Mining Plc and Lilium Mining have resolved their legal dispute over the sale of two gold mines in Africa, agreeing to transfer the assets to the Burkina Faso government.
The conflict arose after Lilium acquired the Wahgnion and Boungou projects in Burkina Faso last June, Bloomberg reported.
Endeavour had previously claimed that Lilium missed over $100 million in payments, while Lilium accused the London-listed gold producer of misrepresenting the "financial position and operating capabilities" of the mines.
As part of the settlement, Lilium will transfer ownership of the mines to the Burkina Faso government. In return, the government will pay Endeavour $60 million and a 3% royalty on up to 400,000 ounces of gold produced at the Wahgnion mine, according to a statement released on Tuesday.
Endeavour and Lilium “have agreed to cease the current legal proceedings against each other,” the statement said. The firms have been involved in an arbitration case in London since March.
Endeavour said “both parties would like to thank the Government of Burkina Faso for its mediation efforts”.
Lilium declined to comment on the matter. The company is a subsidiary of Lilium Capital, an investment firm founded by US-Burkinabe businessman Simon Tiemtore. Endeavour, meanwhile, continues to operate gold mines across Senegal, Ivory Coast, and Burkina Faso.
The nationalization of the mines by Ouagadougou marks a new chapter in a growing trend across Africa, where governments, particularly those under military regimes, are taking steps to assert greater control over their natural resources.
For instance, in June, Niger's military junta revoked the mining license of French state-owned company Orano at the Imouraren mine, which is one of the largest uranium mines in the world
At current rates the quoted 400,000 ounces of gold would be worth over a billion dollars, so it does seem like the country stands to profit on this.