Mining

Burkina Faso: Boungou and Wahgnion Gold Mines Transferred to Government

Burkina Faso: Boungou and Wahgnion Gold Mines Transferred to Government
Tuesday, 27 August 2024 19:00

In Burkina Faso, Lilium Mining, a company indirectly owned by Simon Tiemtoré, acquired two gold mines from Endeavour Mining in 2023. This year, Endeavour transferred control of the mines to the Burkina Faso government after a dispute with Lilium.

Lilium Mining and Endeavour Mining reached a settlement agreement regarding their legal dispute over the Boungou and Wahgnion gold mines. Endeavour announced this on August 27, stating that ownership of the two mines would be handed over to the Burkinabe government.

Under the settlement agreement, the government will pay Endeavour $60 million in cash by the end of the year. The money will be paid in three parts. West Africa’s top gold producer has also secured a 3% royalty on production from the Wahgnion gold mine, up to a maximum of 400,000 ounces sold.

What about Lilium Mining?

So far, There are no details about Lilium Mining’s compensation under the deal. However, the ownership transfer contrasts with the firm’s ambitions in Burkina Faso.

Indeed, when Lilium Mining announced its acquisition of Boungou and Wahgnion in 2023, it indicated plans to become “an intermediate gold producer” in Africa, a market largely dominated by foreign companies. We have reached out to Lilium Capital for clarification but have received no feedback yet (at the moment of publication).

Lilium Mining is a subsidiary of Lilium Capital, a group owned by Burkinabe business mogul Simon Tiemtoré.

Conflict’s origin

The agreement between Lilium Mining and Endeavour Mining, facilitated by the Burkinabe government, ends the legal actions initiated by both companies. 

Last April, Endeavour announced it was taking legal action in the London Court of International Arbitration to recover $125 million owed by Lilium. Lilium countered with claims of “hiding information” during the sale of the mines.

While the settlement does not resolve the allegations from both sides, it may allow operations at Wahgnion and Boungou to resume. Although production has declined, these two mines produced 240,000 ounces (6.8 tonnes) of gold in 2022, accounting for about 12% of Burkina Faso's total gold production that year. 

Emiliano Tossou

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