True Gold Mining (TGM.V) has announced it has suspended all its activities at the Karma gold project in Burkina Faso, which is quite a painful thing to read, considering True Gold was one of the most promising gold project developers in Africa. The company had already issued a warning in December that it had to slow down its progress at the project as there have been some local political issues, created by a power vacuum after the president of Burkina Faso resigned earlier in 2014.
The situation seems to have escalated a bit as the protestors which were demonstrating near the planned mine have caused damage to the company’s equipment. We considered Burkina Faso to be one of the best and safest jurisdictions in West-Africa, but situations can change dramatically in a short period of time. The real issue at Karma is that due to the mandatory resignation of the local mayor, other people are grabbing the opportunity to put themselves in the picture and want to renegotiate the mining agreement. This is obviously an unlawful thing to do and True Gold is being supported by the federal government so we hope they will be able to offer assistance within the next few days and weeks to calm down the locals again.
> Click here to go to True Gold’s website
Disclosure: The author holds a long position in True Gold Mining. Please see our disclaimer for current positions.
