Embattled Acacia Mining lets partner up stake in Nyanzaga gold project
Acacia Mining (LON:ACA), the Tanzanian gold producer dealing with an ongoing dispute with the country’s administration, said Thursday its project partner in the Nyanzaga gold project, Australia’s OreCorp (ASX:ORR), had secured government approval to increase its interest in the asset to 51%.
The agreement, which will see OreCorp Tanzania invest $14 million to complete a pre-feasibility study and related work, leaves the door open for the Australian gold miner to increase its stake in Nyanzaga to 100%. This, said OreCorp, will be done by paying Acacia a further $7 million at a future date.
Following completion of the deal, Acacia — Tanzania’s No.1 gold miner— will retain a net smelter return production royalty over the project, capped at $15 million.
Acacia, 63.9%-owned by Barrick Gold (TSX, NYSE:ABX) owns and operates Tanzania’s three major mines — Bulyanhulu, Buzwagi and North Mara.
The company has had to scale back operations in East African nation due to an ongoing ban on exports of metal concentrate, which represent about a third of the miner’s production.
Since March 2017, when the ban on concentrates came into effect, the Barrick’s unit has faced a series of accusations, including tax evasion and illegal operations, which prompted authorities to question staff and even block one of the firm’s senior executives from leaving the country in one occasion.
To make things worse, Tanzania’s President John Magufuli, served the company in July with a $190 billion tax bill.
Western Australian-based OreCorp has existing key projects across Africa — the Nyanzaga gold project in north-west Tanzania and the Akjoujt South nickel-copper project in Mauritania.