Burkina Faso court annuls Riverstone Karma contract with Franco-Nevada and Sandstorm

The original contract, signed in 2014 by previous owners True Gold and Endeavour Mining, imposed obligations on the Karma mine, including a minimum duration of 40 years, automatic 15-year renewals, and the sale of gold at discounted prices. This agreement, initially for a $100 million construction financing, continued to be effective despite the financing reportedly being fully repaid by 2021. Riverstone Karma SA stated it never directly signed the contract but was bound by its terms after the acquisition.

The company argued the contract was unbalanced, limiting its investment and development capabilities, and negatively impacted Burkina Faso's public finances by reducing the tax base and potential dividends for the state. The transit of financial operations through companies in tax-advantaged jurisdictions, such as Barbados, also raised concerns about compliance with regulations in Burkina Faso and the UEMOA space. The Ouagadougou Commercial Court's decision to annul the contract is seen as a significant precedent for the West African mining sector, affirming national courts' ability to rule on contracts involving international companies when national economic interests are at