Tanzania goes after Acacia’s flagship mine
The Tanzanian government has notified embattled Acacia Mining (LON:ACA) that it would be conducting an inspection of its North Mara mine, the gold producer’s main operation in the country and the only one of the three it owns that remains fully operational.
“The letter states that export permits for gold shipments from North Mara will be issued following completion of this inspection,” Acacia said in a statement.
The move is the latest sign of increasing government pressure on the gold miner, which faces an imminent takeover by its majority shareholder, Canada’s Barrick Gold (TSX:ABX) (NYSE:GOLD).
Acacia, Tanzania’s No.1 gold producer, has been embroiled in a battle with the East African nation since 2017, when the government banned exports of unprocessed metal and slapped the company with a $190 billion tax bill — equal to almost three centuries worth of revenue.
After almost running out of cash, the miner had cut output by a third at Buzwag and Bulyanhulu, mothballing the latter’s underground operations to stay afloat.
It also comes just a week before a deadline for Barrick, which has a 63.9% stake in Acacia, to make a final offer for the African miner. The Toronto-based giant has said a takeover is the only way to resolve the tax dispute with the government, warning of a “catastrophic” loss of value if minority shareholders opposed the deal.
The announced inspection of North Mara’s production makes for ominous reading for the company’s minority shareholders, who have been resistant to the all-share offer made by Barrick in May for considering too low.
Last year the mine, Acacia’s largest, produced 336,055 ounces of gold, which the company was able to sell abroad as North Mara has not been affected by Tanzania’s 2017 export ban because it produces gold doré bars rather than ore concentrate.
Barrick has until July 19 to submit a new bid.