Acacia Mining Plc’s tumultuous year doesn’t seem likely to ease up any time soon. The gold miner’s shares surged as much as 41 per cent Thursday, after controlling shareholder Barrick Gold Corp. said it moved closer to resolving a crippling dispute with Tanzanian authorities.
Yet it seems Acacia itself — which must approve any deals Barrick negotiates with the government — was left out of the loop. Tanzania banned exports of unprocessed gold in March and hit Acacia with a US$190 billion tax bill in July, claiming the company had under-declared export revenue since 2000.
The ban meant the London-based company was forced to stockpile output and curb mining at its flagship operation. Third-quarter earnings plunged 70 per cent from a year ago, the company said Friday.
On Thursday afternoon, following three months of negotiations, multiple intercontinental flights and a six-hour meeting with Tanzanian President John Magufuli, Barrick Chairman John Thornton announced in the commercial capital, Dar es Salaam, that the two sides had reached a preliminary solution.
Tanzania will receive a US$300 million payment — from Acacia, not Barrick, the Canadian company later clarified — as “a show of good faith” and the two sides agreed to share the economic benefits from the mines 50-50, Thornton said.
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