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Friday, 20 April 2018

ACACIA, INVESTORS IN TALKS ON POSSIBLE JOINT VENTURE

The company, which operates North Mara, Buzwagi and Bulyanhulu gold mines in Tanzania, is reportedly negotiating with China’s Shandong Gold Mining Co Ltd, Zijin Mining Group Co Ltd and with state-owned China National Gold Group for a possible joint venture.


Dar es Salaam. Acacia Mining Plc reiterated on Thursday that it was still discussing with Chinese investors for a possible investment deal in one or more of the firm’s mines in Tanzania.

The company, which operates North Mara, Buzwagi and Bulyanhulu gold mines in Tanzania, is reportedly negotiating with China’s Shandong Gold Mining Co Ltd, Zijin Mining Group Co Ltd and with state-owned China National Gold Group for a possible joint venture.

“As previously announced, in response to a number of expressions of potential interest from Chinese counterparties, the Company is engaging with a small number of potential investors to explore the value to the Company of the sale of a stake in one or more of its Tanzanian assets,” Acacia said yesterday.

Acacia Mining Plc said in its unaudited financial results for the first quarter of the current calendar year that so far, there was no certainty as to whether any agreement would be reached with any of the potential investors.

It said however that any decision reached will take into consideration the interests of its shareholders.

“Acacia remains committed to shareholder value and evaluates all opportunities against strict strategic and financial criteria. Any transaction will be pursued only if it is determined by Acacia’s Board to be in the best interests of all shareholders,” the statement reads.

A subsidiary of Barrick, Acacia said it would continue to support its parent firm in its discussions with President John Magufuli’s administration as the two parties work towards identifying a possible negotiated resolution.

The discussions seek to resolve both the government’s export ban on concentrates and the tax dispute. In the endeavor to resolve the tax dispute, Barrick struck a deal with the government in October last year (2017) that would see Acacia paying $300 million to the government, hand over a 16 per cent stake in its mines and split ‘economic benefits’ from operations.

But Acacia said in the statement that it awaits a detailed agreed proposal and documented final agreements for a comprehensive settlement in the coming months.

While sticking to its full-year targets of producing gold output of between 435,000-475,000 ounces, Acacia’s earnings during the first quarter were 49.4 per cent lower than during a similar period last year, largely due to reduced operations at Bulyanhulu Mine amid a tax dispute with the government.

At Bulyanhulu, the company says, gold production reached only of 8,527 ounces, being 87 per cent lower than what was produced during the first quarter of 2017.

This was mainly due to the decision to place the underground mine on reduced operations.

At North Mara and Buzwagi, gold production was down by 20 per cent and 40 per cent respectively compared to a similar period last year.

The Citizen

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