DAKAR - New York-based Flagship Gold Corp has signed a partnership agreement with Mali's state-owned miner to restart production at the Morila gold mine, the first US investment under the military-led nation's new mining code, Mali's government said.

The agreement, signed Wednesday in Bamako, allows Flagship to acquire equity in Morila SA, which holds estimated reserves of 2.5-million ounces, Mali's mines ministry said in a statement. Details of the partnership were not announced.

The mine, located in the southern city of Sanso in Mali's Sikasso region, was taken over by the state in June after Australia's Firefinch abandoned operations in 2022 over declining output and rising costs.

Flagship, incorporated in June 2024, enters Mali amid a wave of resource nationalism across the Sahel, where military-led governments in neighboring Burkina Faso, Niger and Guinea have tightened control over gold, uranium and bauxite assets.

Mali adopted a new mining code in August 2023, boosting state control by allowing up to 30% ownership in new projects and scrapping key tax exemptions.

The overhaul has unnerved foreign investors, though Russian and Chinese firms have deepened their presence through state-backed deals.

"This is a win-win partnership," Mines Minister Amadou Keita said.

David Alan Miller of Graubard Miller, legal counsel for Flagship, said in response to questions about Morila's financing plans that the company is currently unable to disclose any information beyond what is publicly available.

Morila, once operated by Barrick and AngloGold Ashanti, is being revived as gold prices surge past $4 000 an ounce, spurring global competition for high-grade deposits.

Mali's Economy Minister Alousséni Sanou said the deal "raises hope" for the country's mining future.

Mali, one of Africa's top gold producers, has seen investment dip as regulatory crackdowns and insecurity bite. Industrial gold output fell 32% year-on-year to 26.2 metric tonnes by end-August, according to government data.