Acacia within reach of output guidance despite Bulyanhulu woes

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ACACIA Mining produced 191,203 ounces of gold in the third quarter taking production for the year to about 620,000 ounces and putting the UK-listed group within touching distance of its full-year guidance of 750,000 oz.

This is despite a decision to put the Bulyanhulu mine on care and maintenance following a government embargo of concentrates from the mine – a development dating from April that management said had the effect of damaging morale group-wide. Of its third quarter output, 70% or 132,787 oz of gold was sold.

Acacia said that production of some 69,097 oz was “ahead of expectations” at Buzwagi which had produced 66,000 oz in the previous quarter and only 40,000 oz in the third quarter of the previous financial year. North Mara produced 72,011 oz (Q2: 83,000 oz) while Bulyanhulu turned out 50,094 oz (Q2: 59,000 oz).

Acacia will provide more details regarding its third quarter performance on October 20. The firm’s 64% shareholder, Barrick Gold, also provided production numbers today but did not disclose any details regarding the tenor of discussions with the Tanzanian government. It will discuss the group’s third quarter performance on October 25, it said.

The Tanzanian government has prevented sales of concentrate from Bulyanhulu as well as Buzwagi because it contests the company has under-reported the value of the minerals for years. In July, it lodged an astonishing $150bn claim against Acacia consisting of $40bn in unpaid tax between 2000 and 2017 with the balance consisting of penalties and charges. Acacia has robustly denied the allegations.

Acacia sought talks with the Tanzanians but was rebuffed as the government wanted to speak directly to Barrick. Any future decisions regarding Acacia would first have to be supported by Acacia’s minority shareholders, however.

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