Burkina court annuls Karma gold deal as legal battle widens

A commercial court in Burkina Faso has annulled a gold purchase agreement involving Franco-Nevada Corporation, registered in Barbados and Sandstorm Gold Limited of Canada, ordering the companies to pay Burkinabe company, Riverstone Karma SA CFA5.2 billion approximately $9.3 million in damages in a recent ruling, and dismissed all objections raised by the defendants. But Franco-Nevada says it rejects the court’s ruling. The June 10, 2026 judgment by the Commercial Court of Ouagadougou stems from a dispute over the Karma gold mine, now operated by Riverstone Karma, where the company argued that it had been unfairly bound by a long-term gold streaming agreement negotiated by the mine’s previous owners. The open-pit Karma mine, located about 195 kilometres from Ouagadougou in Burkina Faso’s Yaadga region, was previously owned by Endeavour Mining before being acquired in March 2022 by Néré Mining SA, a Burkinabe company majority-owned by local investors. Riverstone said it inherited a financing arrangement signed on August 11, 2014 by the mine’s former owners, True Gold and later Endeavour Mining. According to the company, the arrangement was linked to a $100 million loan used to develop the mine. Although the financing had been fully repaid by 2021, Riverstone said the associated gold purchase agreement remained in force under terms it considered heavily weighted in favour of Franco-Nevada and Sandstorm. The agreement, which the company says bore the hallmarks of a leonine contract, “imposed particularly one-sided obligations on the Karma mine for an indefinite period, comprising an initial minimum term of 40 years, automatically renewable in 15-year increments.” It said the mine was required to deliver a portion of its monthly gold production at an 80 per cent discount, which would later convert into a 5.2 per cent royalty on its production, with no fixed maturity date and no possibility of setting a predetermined interest rate. “Even more restrictive was the requirement that any financial commitment exceeding $10 million dollars had to be approved in advance by Franco-Nevada, thereby limiting Riverstone Karma’s ability to finance the site’s expansion, modernisation and industrial development, while consolidating Franco-Nevada’s control over the mine.” It noted further that the agreement had been negotiated and concluded between the international mining groups and True Gold, then Karma’s parent company. Despite this lack of a direct signature, Riverstone Karma SA found itself obliged to bear all the obligations under the agreement. Franco-Nevada, however, has denounced the ruling, saying the agreement is governed by Ontario law describing the judgment as invalid, adding that it is pursuing legal remedies in Canada and elsewhere to protect its rights. “Franco-Nevada is also pursuing its own legal remedies in Ontario and elsewhere in accordance with the dispute resolution provisions in the agreement against Riverstone Karma SA, its parent Néré Mining SA and other relevant affiliates to protect its legal rights,” the company said in a press statement. The post Burkina court annuls Karma gold deal as legal battle widens appeared first on Ghana Business News.

Burkina court annuls Karma gold deal as legal battle widens

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