African miner Randgold Resources on Thursday said full-year profit and output was on track despite a third-quarter dip, but its shares slid to a three-month low after its CEO did not rule out seeking arbitration over a tax dispute in Mali.

Berenberg analysts said Randgold had delivered “a negative set of results”, although other analysts said the figures gave some encouragement as full-year goals were still in sight.

African risk has dented investment in a range of mining stocks as the industry has disputed South Africa’s proposed new mining code and gold miner Acacia’s has battled with the Tanzanian government over tax claims.

Randgold has said it has confidence in jurisdictions where it operates – Cote d’Ivoire, Democratic Republic of Congo, Senegal and Mali – although it has yet to resolve a tax dispute with the Malian government.

CEO Mark Bristow said arbitration was a possibility in Mali, but said there were other avenues to explore before that.

He told Reuters in an interview that arbitration “is a possibility. A final competent authority to judge on anything like this.”

But he said the Mali situation was distinct from Tanzania.

“The difference is we can show the tax we have paid, we have investment conventions which we have respected and met,” he said. “I don’t think any one can accuse us of not paying enough.”

He also said Mali was highly dependent on Randgold. “We still represent 7 percent of Mali GDP. We are a big player,” he added.

In the aftermath of a sharp commodity price crash that ended in early 2016, Randgold stood out as it carried on investing and managed to keep debt levels close to zero, meaning its shares have outperformed the gold price.

But it is not immune to issues such as declining grade quality and a slowdown due to work to upgrade operations in Cote d’Ivoire, which meant it had already warned its third quarter production would be lower.

Gold production fell to 310,618 ounces, down 9 percent quarter on quarter, while profit fell 41 percent to $60.2 million.

But the company said it was on track to meet 2017 production guidance of 1.25-1.3 million ounces of gold.

Randgold’s shares were down nearly 5 percent by 1130 GMT, their lowest since early August. The wider sector was almost flat.

(By Zandi Shabalala. Additional reporting by Barbara Lewis in London and Sanjeeban Sarkar in Bengaluru; Editing by Jason Neely and Edmund Blair)

Posted by