16 June 2017

Tanzania: Acacia Sticks to 2017 Output Forecast

Photo: Daily News
Acacia Mining (file photo).

Acacia Mining's production of gold from Tanzania has been hit by an export ban of mineral concentrates but targets for the year remain unchanged at this stage, Chief Executive Brad Gordon said yesterday.

The government and Acacia's majority owner Barrick Gold agreed on Wednesday to begin talks over a ban in effect since March that has blocked the shipment of concentrates from two of Acacia's three gold mines.

The breakthrough came after Prof John Thornton, executive chairman of Canada's Barrick Gold, which owns 63.9 per cent of Acacia, flew in the country to meet President Dr John Magufuli.

"There has been an impact on productivity ... but we are guiding at this stage that we will be within the guidance that we announced at the start of the year and that hasn't changed," Gordon said on a conference call.

The government is pushing for a local smelter to be built and has accused Acacia of tax evasion, operating without a licence and under-declaring the contents of containers prepared for shipment.

Acacia Mining has been accused of operating illegally and cheating the country of tens of billions of dollars by understating by more than 10 times the gold and copper concentrate levels in its mineral exports.

Mr Thornton said he was "very optimistic" a solution could be reached after what he described as "very extensive and productive discussions".

"I've assured the president we're very interested in sitting down and reaching a resolution which is a win-win," he said.

"A win for Tanzania, a win for Barrick and our subsidiary company Acacia." A government statement said a panel of experts would "negotiate how the company will pay the money and how it will conduct future operations in the country".

Acacia's shares rose 7.9 per cent on Wednesday to close at 293.70p but they are still down more than 45 per cent since early March, when the government imposed an export ban on unprocessed metals.

Acacia, which recorded adjusted earnings of $161m last year, says the ban is costing it $1m a day. Acacia has rejected all allegations of wrongdoing and called for an independent inquiry into the government's accusations, which were made by two committees appointed by the president.

With Agencies

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