Acacia’s London-listed shares skidded 8.8 per cent to 141 pence by 0919 GMT and have now tumbled more than 70 per cent since Tanzania introduced a ban on concentrate exports in March 2017.
The miner has begun to value its Tanzanian operations for a potential sale after expressions of interest from Chinese buyers, it said in February.
London
Acacia Mining reported a near 50 per cent fall in first quarter earnings on Thursday after reducing operations at its flagship gold mine in Tanzania amid a tax dispute with the government.
Acacia, a unit of Canada’s Barrick Gold and Tanzania’s largest gold miner, said its gold production fell 45 per cent in the first quarter from a year earlier to 120,981 ounces, mainly due to lower output at its flagship Bulyanhulu mine.
Acacia’s London-listed shares skidded 8.8 per cent to 141 pence by 0919 GMT and have now tumbled more than 70 percent since Tanzania introduced a ban on concentrate exports in March 2017.
The company stuck to its full-year targets, targeting output of between 435,000-475,000 ounces, or at least 38 per cent lower than 2017, at a cost of $935-985 per ounce.
Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) for the three months to March 31 fell to $44 million from $82 million a year earlier, Acacia said.
It was forced to reduce operations at Bulyanhulu last year because of the tax dispute.
The miner has begun to value its Tanzanian operations for a potential sale after expressions of interest from Chinese buyers, it said in February.
Discussions between parent Barrick and the government to resolve both Tanzania’s export ban on concentrates and the tax dispute are ongoing, Acacia said.
Barrick struck a deal in October with the government that was supposed to resolve the tax dispute. It would see Acacia pay $300 million to the government, hand over a 16 per cent stake in its mines and split ‘economic benefits’ from operations.
However, Acacia has said any agreement would need to be reviewed by its board and expects a detailed version of the deal within the first half of the year.
Re-open mine
Acacia is conducting a study this year on Bulyanhulu to find the best way to eventually re-open the mine.
“If the settlement agreement is in place, which we certainly expect it to be, then you would look at re-opening Bulyahulu sometime in 2019 and ramping it up to full scale in 2020 and 2021,” interim CEO Peter Geleta told a conference call following the results.
Jeffries’ analyst Alan Spence said Acacia’s EBITDA figures fell slightly short of expectations but there were no surprises in the rest of the results.
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Note: The results are not exact but very close to the actual.
