Dar es Salaam — The resignation of two top executives of Acacia Mining Company yesterday opens a new chapter in the firm whose recent performance has faced turbulence over a bitter tax dispute with the government of Tanzania.
Acacia board moved quickly to calm investors, announcing it had replaced Chief Executive Officer (CEO) Brad Gordon and Chief Finance Officer Andrew Wray moments after the two said they were quitting the London-based miner.
Their resignations saw Acacia shares fall by 4.18 per cent at the London stock market Thursday to pile pressure on investors who have seen the value of their shares in Acacia plummet by 50 per cent since March when the dispute with Tanzania spiked. Messers Gordon and Wray resigned barely two weeks since Barrick Gold Corp, the majority shareholder in Acacia with a 64 per cent stake, struck a deal with the government to settle the tax dispute.
Under the deal, announced on October 19, Barrick said it would pay $300 million (about Sh700 billion) to the government and split 'economic benefits' from operations at Buzwagi, Bulyankulu and North Mara mines, all in Tanzania. The proposed deal, which Acacia said will have to wait for approval from its own board, was meant to resolve a ban on export of copper concentrates and a $190 billion (Over Sh400 trillion) tax payment bill slapped on the miner by the government.
The statement announcing the resignation of the executives did not link their decision on the ongoing dispute with Tanzania, only offering that Mr Gordon was returning to Australia for family reasons while Mr Wray was pursuing an opportunity elsewhere.
However, a source within Acacia in Dar es Salaam told The Citizen in an interview that it was not entirely unlikely that the move was linked to the happenings in Tanzania.
"The broader backdrop might have influenced their decisions but we believe their minds were made up before the framework agreement (with the government) was signed... .Their decision to leave were independent of the actions of Barrick during the negotiations," the source who requested anonymity said.
Pundits are of the view that the two might have resigned in protest to the way Barrick conducted the negotiations with Tanzania. The other possible aspect is that Barrick may have forced the two to resign so they could pave way for a smooth implementation of the Government-Barrick deal.
As the topmost executives at Acacia, Mr Gordon and Mr Wray made key management decisions on behalf of the board and had cut a forlorn image as Barrick engaged the government in three-month long talks leading to the signing of the framework agreement on October 19. As CEO, Mr Gordon was locked out of the talks with the government despite his constant insistence that any agreements reached would be subject to approval in London. The government on its side argued Acacia was not officially registered to do business in Tanzania and would thus not be party to the talks.
President John Magufuli also told Barrick chairman John Thornton on the day the agreement was signed in State House, in Dar es Salaam, that the government will still not expect any of Acacia's input to interfere with the signed framework agreement.
Mr Wray would a day later throw a spanner in the works by declaring that Acacia did not have the funds to pay upfront the $300 million that Barrick had agreed with Tanzania. President Magufuli told Mr Thornton the government wanted the money paid quickly.
Barrick would later be forced to issue a statement to calm jittery investors and clarified the amount in good will to Tanzania will be paid depending on cash-flow at Acacia and also on a decision whether the government will allow the miner to export thousands of tonnes of copper concentrate held at the port and at mining sites since March.
Barrick also clarified that it will foot part of the bill in the $300 million payout in an apparent answer to Mr Gordon's concern that its tax provision for unforeseen instances as that happening in Tanzania was pegged at only $128 million. Reports showed Barrick as setting aside $172 million this year in similar tax provisions.
Yesterday Acacia said both Brad and Wray will remain during the transition period to the end of the year. Mr Peter Geleta was named interim CEO while Mr Jaco Maritz was named the new chief finance officer.
Prior to the appointments, Mr Geleta worked as Acacia's head of organisational effectiveness while Mr Maritz is currently Acacia's general manager for Finance. "Both appointments will be effective from 1 January 2018," the Acacia statement reads.
Commenting on the changes, Kelvin Dushnisky, Chairman of Acacia said, "Brad and Andrew have been instrumental in the operational and financial turnaround of Acacia over the past four years and on behalf of the Board and the Company, I would like to extend our sincere thanks to both of them for their contributions. We wish them all the best for the future. We are equally confident that Peter and Jaco will move seamlessly into their new roles. Peter's demonstrated leadership skills, combined with his all-around abilities and strong experience across all aspects and all levels of the African mining industry will be an important asset for Acacia.
Peter (54) has 35 years of mining industry experience in both operational and corporate leadership positions, primarily in Africa. Prior to joining Acacia, Peter held senior roles at AngloGold Ashanti (25 years) and Barrick Gold Corporation ("Barrick"). He joined Acacia in May 2012 as Vice President, Organisational Effectiveness. Since then, Peter has been a key member of the Executive Team of Acacia and an integral part of the Company's turnaround. During his time with Acacia, Peter has also served as General Manager of the Bulyanhulu mine and helped lead the successful restructuring of the business. Peter holds an Executive MBA qualification from the University of Cape Town.
Jaco (42) has been with Acacia and its predecessor companies since 2001 in a range of increasingly senior finance roles covering all aspects of the finance function. He was initially employed by Placer Dome, which was acquired by Barrick in 2006, and was part of Acacia at its inception. In 2013, Jaco spent six months acting as Chief Financial Officer for the business, prior to the appointment of Andrew. Jaco is a member of the South African Institute of Chartered Accountants.
In addition to assuming the role of Interim CEO, Peter will also replace Brad on the Board of Directors at the end of the year. As a result, the Board will continue to consist of 7 Directors, with 1 Executive Director, 4 independent Non-Executive Directors and 2 Non-Executive Directors.
Jaco's expertise and long history with the company make him the natural successor for Andrew. The Board will continue to provide the management team with our full support as the Company focuses on delivering against our operational targets, which remain unchanged from the Q3 results, while seeking a resolution to the situation in Tanzania."